Can Insurance Refuse to Pay?

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by Tiffany M.
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In short: yes. Medical insurance companies do reserve the right to refuse payment for various reasons. It is important to understand all of the possible reasons why your insurance company may not pay for your treatment prior to any medical visits, routines, or impromptu emergency visits to avoid high medical bills and the stress that can bring on. 

Why Health Insurance Companies Refuse To Pay

As mentioned, there are a few different reasons why insurance companies can refuse payment. Below are a few of common scenarios people encounter when they find out why their insurance is not offering their usual coverage. 

Your Treatment is Not a Covered Benefit

When you sign-up for a plan you agree to a set of benefits that are covered by the insurance. If the benefit is not covered, the insurance company has no reason to cover the charges since it is not under your contract. Make sure to revisit your list of covered benefits to make sure you were not wrongly charged.

You Received Care From an Out-of-Network Provider

This can be a reason for payment refusal depending on the plan you have. If you have a PPO plan, your insurance company should pay partial coverage for your out-of-network services. However, for a majority of plans, services done with out-of-network providers are not covered unless it is an emergency. Make sure to check with your insurance company to identify if your provider was in-network. 

You Are Missing Information

If this is the case, chances are that your insurance company will identify that you are missing information. You should immediately call them, figure out what information is missing and get the information back to them as soon as possible to reprocess your claim.  

The Insurance Company Claims the Treatment is Not Necessary

Certain treatments are not deemed necessary by a majority of insurance companies. These treatments typically include cosmetic treatments or surgeries, fertility visits, and prescriptions, amongst others. However, if your doctor recommended treatments in any of these areas it is important to contact your insurance and let them know that your treatment was not optional and make an appeal.

Your Hospital Stay Was Incorrectly Coded

Everyone makes mistakes and this issue happens more often than you may think. Your healthcare provider or hospital may have coded your visit incorrectly. This can include the specific treatment you received or the duration of your stay at the treatment center. Make sure to contact the hospital and receive a copy of your charges to ensure everything is tracked correctly.

What To Do In The Event of Payment Refusal

If your insurance company is refusing to pay for your treatment, there are a few ways to combat this issue. Below are a few ways in which you can begin to appeal your insurance company and hopefully avoid any costly medical bills.


An appeal is the most common form of rebutting an insurance payment refusal. There are two ways to go about your appeal which are listed below in more detail. 

Internal Appeal

An internal appeal is done within the insurance company itself. Once you determine that your treatment was legitimate and want to pursue your appeal, just contact your insurance company directly and ask them to conduct a full review of its decision to refuse payment. Each company has different forms for appeals so it is important to contact your insurance provider directly for further detail. This process may take some time, but if it is an emergency it is important to note that when beginning your appeal.

External Review

An external review is done with an independent third party who makes the final decision on whether or not the insurance company must provide coverage or not. If you want to begin the process for an external review, you must file a written request within four months of your coverage denial with an external reviewer. The external reviewer will then conduct a full review and determine if the insurance company must provide coverage or not. External reviews are typically a quick process, not taking more than 45 days. If you need an immediate response, you can get the decision in as little as 3 days. 

Do Your Own Review 

To speed up the process of an appeal, you can take matters into your own hands and do your own review of your policy and benefits to make sure you were not wrongly refused payment. Review your policy, check your benefits, and review your hospital receipts for any mistakes that may have caused your insurance company to deny coverage. In the event you find a mistake, taking the files to them will make the process much quicker than an internal appeal.

Contact Your State Insurance Department

If you are stuck on where to start, every state has an Insurance Commissioner who manages all public insurance companies within their state. If you have a self-insured health insurance plan, they will not be able to help you directly, but they will still offer you advice on what to do regarding your claim. This is a great option if you do not want to go to your insurance company directly or want to hire a third party for an external review. Helping their constituents is a big part of their job and quite common!


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