I Just Got Denied Coverage: How to File an Insurance Appeal for Substance Use Disorder

If you’ve already gotten your son or daughter into treatment for his or her substance use disorder (SUD), the last thing you should have to worry about is how to pay for it. Unfortunately, many insurers automatically deny coverage in part or in whole for addiction treatment, and you may have to appeal in order to ensure your child continues to receive the treatment he or she needs and deserves.

Families are often faced with the burden of paying out of pocket for their child’s treatment when they are denied coverage. Understandably, the appeals process can seem daunting. However, persistence pays off. While many people don’t know how to (or choose not to) file an appeal, the U.S. Government Accountability Office (GAO) found that 39 to 59 percent of internal appeals were reversed in favor of the consumer (GAO report).

To help you understand how to appeal your denial of coverage or payment for substance use disorder, here’s some advice on how to appeal your denial and simplify the process:

I’ve been denied coverage for my child’s substance use disorder treatment. Am I allowed to appeal?

Absolutely. It is everyone’s right as a policyholder, or as a dependent of the insured, to ask for a reconsideration of the denial. If a health insurer denies the coverage recommended by the treating physician, the parents should file an appeal on behalf of their child. The physician’s treatment recommendation is necessary to facilitate the appeal. The appeals process will vary based on the parent’s type of insurance and the state where they reside. It is important to read the insurance policy carefully and get in touch with the insurance company to determine the process. It’s also important to document all of your communication with your insurance company. Check out some common violations here to see if you should appeal.

What if my child’s physician says this treatment is medically necessary for my child’s recovery?

Unfortunately, it is not uncommon for the treating physician to disagree with the insurance company. Insurance carriers hire medical directors who use clinical review criteria to help determine what is medically necessary or not. Often, the insurance coverage denial is not based upon evidence-based medicine or might have other deficiencies. When a denial is made, insurers might make the excuse that they are not practicing medicine, but that the physician should follow their treatment recommendations, anyway. Under that scenario, parents can be stuck with a large medical bill. The system is very subjective, and quite frankly patients and their loved ones are often caught in the middle. The bottom line is when the insurer denies coverage that your child’s physician considers medically necessary, you should file an appeal.

Is there anything I can do before filing an appeal?

Before filing for an appeal, the treating physician has the right to talk directly to the insurance medical director who made the denial (as required by state laws and national accreditation standards). This is often called a “peer-to-peer” conversation. Sometimes the parent, on behalf of the child, needs to ensure that the physician actually had an opportunity to talk to the insurance medical director. Be sure to fully document this process and keep your own records as you go along. If no progress is made based on the conversation, then it is time to file an appeal. At any point in the appeal process, individuals should feel free to contact the state insurance commissioner (or other applicable regulator) to let them know about any potential violations in their denial of care before or after an appeal is filed.

What documentation do I need from my child’s physician for the appeal?

When filing an appeal, it is important to collect and send in all of the pertinent medical records which support the SUD treatment plan for the child. In addition, a statement by the physician is important. It also is a good practice to draft a summary letter that sets forth why the care is medically necessary and why the care should be covered.

How long does it typically take for a health insurer to process my appeal?

Timelines differ depending on whether the appeal is “expedited” due to an urgent condition (typically 24 to 72 hours) or a “standard” appeal (typically 30 to 60 days). Timeframes also will vary depending on whether it is an internal appeal or external appeal. An internal appeal is when the appeal is reviewed internally by the health insurer, and an external appeal is conducted by an independent third party. Appeal timelines are established by state and federal laws as well as national accreditation standards.

What is the difference between a medical necessity or clinical appeal, and an administrative appeal?

A medical necessity or clinical appeal typically covers denials that are related to the “appropriateness” of care, such as length of stay or level of care (e.g. inpatient vs. outpatient). An administrative appeal typically covers whether or not the recommended care is covered under the policy itself.

At what point do I ask for an independent or external review of the denial?

As soon as the internal appeal process is exhausted (which typically is one or two levels of appeal directly with an insurer), individuals have a right to appeal to an external, third party. Under federal and state law, the health insurer must explain to the parent (or their representative) the next steps to initiate an external appeal. Either way, you should file a complaint with your state insurance commissioner to make sure that you are leveraging all of the legal protections.

What can I do for my child in the meantime while I’m waiting for my insurer to provide coverage?

That is a tough question to answer. Clearly in many instances, the parent needs to make sure that their child is getting the substance use disorder treatment that he or she needs. In some cases, mental health or addiction treatment professionals will work with families to negotiate a special case rate or a discounted payment plan to make the care more affordable. Building a network of supporters, such as the physician recommending care, always is important. Keeping the pressure up on the insurer can help a lot to ensure that the denial of care is reviewed and hopefully over-turned as soon as possible. Don’t let the administrative roadblocks get in the way. Keep advocating for your child.