Denied a Claim? Here's What to Actually Do Next
Receiving a notice that your insurance claim has been denied can feel alarming. Many people immediately assume they'll have to pay the full cost of their healthcare visit, but that's not always the case.
In fact, many claim denials can be resolved once the reason is identified. Sometimes the issue is as simple as outdated insurance information or a coordination of benefits question. Other times, the provider may need to submit additional documentation or formally appeal the insurance company's decision.
The key is understanding what happened and knowing what to do next. You don't need to become an insurance expert, but learning a few basics can help you respond quickly and avoid unnecessary delays.
What is an insurance claim?
After you receive healthcare services, your provider submits an insurance claim to your insurance company. Think of the claim as a request for payment. It includes information about the services you received, the provider who treated you, and the medical and billing codes your insurance company needs to process the claim.
Once the insurance company reviews the claim, it determines whether the services are covered under your plan, how much it will pay, and whether you have any financial responsibility. That decision is reflected in your Explanation of Benefits (EOB), while your provider typically receives a Remittance Advice explaining how the claim was processed.
Rejected claim vs. denied claim: What's the difference?
These terms are often used interchangeably, but they mean different things.
A rejected claim usually means the insurance company couldn't process the claim because something was missing or incorrect. For example, there may have been an incorrect member ID, incomplete information, or another administrative issue. Rejected claims generally can be corrected and resubmitted.
A denied claim, on the other hand, has already been reviewed by the insurance company. The insurer decided not to pay all or part of the claim based on the member's benefits, eligibility, coverage rules, or other policy requirements.
Understanding whether a claim was rejected or denied helps determine the next steps.
Common reasons a claim is denied
Every insurance company has its own policies, but some of the most common reasons include:
Your insurance coverage had expired.
There is a coordination of benefits issue because another insurance should be billed first.
Your insurance information has changed.
The service isn't covered under your plan.
Additional information or documentation is needed before the claim can be approved.
Sometimes the denial means the insurance company needs more information before making a payment decision.
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What your provider does first
When a claim is denied, the provider's billing team doesn't automatically assume the patient is responsible for the balance. Instead, the first step is to determine why the claim was denied. Depending on the situation, your provider may:
Review the denial reason provided by the insurance company.
Verify your insurance eligibility and benefits.
Check whether another insurance should have been billed first.
Contact the insurance company for clarification.
Correct and resubmit the claim if an administrative issue caused the problem.
Many denials can be resolved without requiring any action from the patient.
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When you may need to contact your insurance company
Sometimes your provider reaches the point where only the member can verify or update certain information with the insurance company. For example, your insurance company may need you to:
Confirm your current coverage.
Update your Coordination of Benefits (COB) information.
Verify that your policy is active.
Resolve questions about a dependent's eligibility.
Update information after changing employers or insurance plans.
Calling your insurance company is often the fastest way to resolve these issues. Once the information has been updated, your provider can usually resubmit the claim for processing if appropriate.
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What if the denial is incorrect?
If your provider believes the insurance company made the wrong decision, the next step may be an appeal. An appeal is a formal request asking the insurance company to review the claim again. Depending on the reason for the denial, the provider may submit additional medical records, clinical documentation, or other supporting information.
Appeals take time. While every insurance company has its own timelines, it's common for the review process to take several weeks before a final decision is made.
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What if the insurance company still refuses to pay?
Fortunately, very few claims reach this stage. Most denied claims are resolved by correcting information, updating insurance details, or completing the standard appeals process. However, if you have completed your insurance plan's required appeals process and still believe your claim was denied incorrectly, you may have additional rights depending on the type of insurance you have.
For many employer-sponsored, self-funded health plans, federal law under ERISA (the Employee Retirement Income Security Act) provides important protections for plan members. Depending on your plan, you may have the right to request an independent external review of the denial. If you believe your plan did not follow the required claims procedures or your rights under ERISA, you can also contact the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) for guidance or to file a complaint.
These situations are relatively uncommon, but it's helpful to know that additional protections may be available if a claim cannot be resolved through the standard insurance process.
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How we help minimize claim issues
At Bodhi Counseling, we know that billing issues can be stressful, which is why we work to identify potential insurance issues as early as possible. Before services begin, we verify your insurance information and review your eligibility and benefits based on the information available to us. Because insurance companies make the final coverage decisions only after processing a claim, we can't guarantee how every claim will be paid. However, we do our best to provide accurate estimates, explain the billing process, and help clients understand what to expect.
If a claim is rejected or denied, we investigate the reason, communicate with the insurance company when appropriate, and let our clients know if any additional information or action is needed. Our goal is to resolve billing issues as efficiently as possible so our clients can stay focused on their care, not on insurance paperwork.
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Understanding the process can save time and stress
A denied claim doesn't automatically mean you'll be responsible for the full cost of your care. In many cases, it's the beginning of a process to identify what happened and determine the appropriate next step. Whether that means correcting information, updating your insurance, submitting an appeal, or asking your insurance company for clarification, understanding the process can help you respond with confidence instead of uncertainty.
At Bodhi Counseling, we believe that clear communication is just as important as quality care. If you ever have questions about how a claim was processed or what information we need from you, our team is always happy to answer general billing questions and help you better understand the process.
Questions About Insurance or Billing?
Understanding insurance can be confusing, but you don't have to navigate it alone. Learn more about Bodhi's billing process and what to expect when using your insurance.
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