What To Do If Your Health Insurance Says Your Treatment Is Not Covered

Last Friday, I happened to pick up a copy of the Wall Street Journal somebody left on the train. There was an intriguing article on the front page — How U.S. Health System Can Fail Even the Insured.

It’s a long story but the story line is familiar. A Mrs. Barbara Calder has a rare genetic illness but she had to jump through one hoop after another to get her health insurance to cover the treatment she needed. I’m going to use this case as an example to show what to do if your health insurance says the treatment you need is not covered.

Here’s a timeline of the events. I’m marking my comments with [TFB].

July 2006 – Mrs. Calder suspected that she had Ehlers-Danlos Syndrome (EDS), a rare genetic illness which can be life threatening. She had health insurance through her husband’s employer. She called the insurance company about seeing a specialist. She was told she needed a referral from another doctor.

August 2006 – She received the referral to a specialist who charges $650 for a consultation. She verified that the specialist was in the insurance company’s network. Before she made an appointment, she called the insurance company again to confirm coverage but this time she was told the service wouldn’t be covered.

[TFB] You got the required referral and the doctor was in the network. So just go. Whether the service is covered or not can be sorted out later. The agents answering the phone are not the ones who process claims. They can be wrong. Whether a claim is covered or not depends on the ICD-9 codes the doctor writes on the claim form. Before you see the doctor, you don’t know what the codes will be. Even if the claim is initially denied, it can be appealed. Health is more important than money. Go get the diagnosis. Have the doctor bill the insurance. Worst case you will have to pay $650 yourself. It’s not astronomical.

September (?) 2006 – Unhappy about the insurance company telling her the consultation would not be covered, Mrs. Calder showed up unannounced at the office of the HR Director at her husband’s employer. She had an argument with him about her insurance coverage. Later, an executive at the employer’s corporate office in a different state was also involved.

[TFB] This was totally unnecessary. Managers at the employer don’t make health care coverage decisions.

October 2006 – Her husband was laid off. They suspected it had something to do with her condition but the company denied. They decided not to take COBRA because they couldn’t afford the $1,200 a month premium.

[TFB] Paying $650 for the consultation out of the pocket would be a lot cheaper than losing a job or paying for COBRA.

December 2006 – Her husband found another job but the new health insurance doesn’t start until 3 months later.

[TFB] Still waiting just to save that $650? Health is more important than money.

July 2007 – She finally saw the specialist and got a confirmed diagnosis. The specialist prescribed a drug but the insurance company refused to cover it. They wanted her to use some cheaper drugs first. The doctor also recommended a test to see if her condition was the type that could result in sudden death. She called the insurance company about the test. Because she didn’t know the exact term, the insurance company misunderstood and told her that the test would not be covered.

[TFB] If you need the drug, pay for the first prescription. Let your doctor tell the insurance company why you need it. Then your next prescription will be covered. Your first prescription will likely be reimbursed as well. If you need the test, go get the test. Fight it only *after* they deny the claim.

August 2007 – Her husband took another job for better pay. The new insurance had another 3-month waiting period. She became uninsured again because she thought COBRA was not worth it.

[TFB] If you keep skipping COBRA and have breaks in coverage like this, your pre-existing condition might be excluded by your next insurance company for one year. See Department of Labor’s FAQs on HIPAA.

November 2007 – Her health deteriorated. She still doesn’t know whether her illness is the more serious type because she never took the test. She’s worried about her children because the illness is hereditary. She wants to move to Belgium because Belgium has universal health care.

[TFB] How is it fair to have Belgian people pay for your health care? The U.S. health care system isn’t perfect. You just have to be willing to pay something out of your own pocket, most likely only for a short while. If the service is medically necessary, it will be covered eventually.

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  1. forHealth says

    Why should the woman’s doctor have to fight for compensation from the insurance company? That shouldn’t be his problem or his responsibility. The woman was following the proper procedure of calling the insurance company beforehand. But as we all know that is usually a waste of time. You also assume that the woman had $650 laying around. She was probably fighting with the insurance companies because she didn’t have that money. Even insured people can’t pay the “ordinary” costs of medical care.

  2. Ted says

    The doctors should help the woman because it is the insurance companies funnel the patients that they charge up to $650 for the 15 minute office visit.

    The part that burns me is if the insurance company covered the procedure the “allowable charge” would be about $150 in my experience. Then the insurance would typically pay 80% of that, or $120, leaving the woman with a $30 bill. But because the insurance company denies coverage the woman owes the doctor $650.

    The system is screwed.

  3. Harry Sit says


    “Why should the woman’s doctor have to fight for compensation from the insurance company?”

    The doctor doesn’t have to, but because he can articulate the medical necessity better than the patient, he’s in a better position to explain the nature of the treatment.

    “You also assume that the woman had $650 laying around.”

    I don’t make that assumption but I don’t think $650 is prohibitive either. If I have a life threatening illness, I’m willing to put that $650 on my credit card. My husband will be willing to work some overtime. My children will be willing to contribute something as well.


    You brought up another good point. If the woman went to the doctor, even if the service turned out to be not covered, I think the charge would still be reduced to the negotiated rate. The woman would be paying $150 instead of $650.

  4. Ted says

    tfb – Not in my experience will they give you the insurance company rate. And I have a lot of experience with women’s medical problems with my wife. The hospital/doctor will usually give you a slight break (like 10%) if you pay it up front or put you on a no interest payment plan.

  5. Janelle says

    I only wish my problem would cost $650, that is cheap compared to the 3 treatments that I need that my insurance company has denied. Each treatment is going to cost us around $5,000.00 each. And we will have this same issue if I need treatments in the future for my rare disease. This will only add to the debt we already have from my previous hospitalization.

    I wish there was some advice out there to help someone in my situation. It would cost the insurance company so much less to pay for these treatments than the past 2 1/2 weeks of hospitalization costs.

  6. Harry Sit says

    Janelle – I’m so sorry to hear about your trouble in getting your treatments approved. Why did they deny them? Are they saying the treatments are not medically necessary, or they are experimental? Did you file an appeal? Are your doctors helping you justify the treatments?

  7. Peter Millington says

    Re moving to Belgium, if she is not too sick to travel by plane (Dr.’s opinion in writing would help), she can go to any of the countries that have national health services for her treatment. i’ve used Italy’s and, while not life threatening, it cost me 50 euros and was treated at a local (excellent) hospital’s outpatient clinic. Total time spent at the clinic was 58 minutes and I was on my way. No questions about payment; no cashier in site. No differentiation from other patients; the clinic nurse used a triage for patients waiting. I was no. 3 of about 50. France has a national plan that treats anyone who needs care and treatment regardless of nationality or residence. France has the highest rated health care among industrialized nations, and Italy was no. 2 at the time. The only paperwork involved for care and treatment will be the 90-day tourist visa, a current passport, and you are required to purchase health insurance for your time of travel. This can cost $120+ and can be purchased on the internet. I doubt you would need to use it, but for most international travelers from the US have to have this international health coverage just as one has to have a valid US or other valid passport. Mexico’s system is very well respected, too, and only a passport and ground transportation need be involved. You can only stay 90-days on a tourist visa, but after being back in the States for 90 days, you can get another tourist visa. The consulate for the country involved may know of special visas for medical care. If you are on Medicare, the US and Italy have a bi-lateral treaty for their citizens to use Medicare or the Italian national health plan in both countries.

    COBRA rates are insanely high, usurious and punitive for being a take-it-or-leave-it policy or choice, in my view. Previous commentary offer several ways to appeal this decision. If you had to put the entire test amount on your credit card and they are billing your credit card account, dispute the charge as soon as possible. The cc issuer will freeze that transaction until it can investigate and neither the lab or the cc issuer can “age” the $650 30-60-90 and they cannot report failure to pay to the credit bureaus. If the cc company cannot negotiate a lower price or cannot win an appeal on your claim, the you will have to pay it but it should not affect your credit rating. You may have to pay accrued finance/interest charges back to the original date you disputed the charge, but more and more the card issuers and medical services providers will negotiate at least a token amount and eat the rest. They are affected by this Depression and just want to have some income.

    My situation is almost identical, except that I took the test and received its interpretation and advise from my primary physician. On Friday, I received a bill for $723, which is the balance not paid by Medicare or Blue Shield Anthem. Medicare sent me the claim’s processing by them and informed me that I should not pay more than Medicare’s co-pay, $45.53 to the provider.

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