FEDweek

Insurance Claim Denials Can be Challenged

Each of the federal insurance programs has procedures for challenging the denial of a claim.

Federal Employees Health Benefits Program–First, check your plan’s brochure to see if the service is covered, limited or excluded. The next step is to review the disputed claims section of your brochure. Briefly, the disputed claims section will direct you to write to the plan to explain why (in terms of the applicable brochure coverage provisions) you feel the services should be covered, and to ask the plan to reconsider your claim.

If the plan again denies the claim, read the plan’s decision letter carefully and then check your plan’s brochure again. If you still disagree with the plan’s decision, the disputed claims section of your brochure will show you how to write to the Office of Personnel Management to ask it to review the claim. OPM can’t review a denied claim unless your plan has reconsidered it first (or at least been given an opportunity to reconsider it).

Generally, OPM will acknowledge your request within five days. After OPM completes the review, it will send you a final response within 60 days. If it needs more time, or if you need to do more–such as send more information–it will contact you within 14 work days of the time OPM gets your request and tells you what you still need to do, if anything. OPM will not give a decision over the phone until the review has been completed and a written copy of the final decision has been issued.

If you are not satisfied with the result of the OPM review, you may be able to challenge the claim in federal or state court, depending on the laws of your state. Consult a legal advisor if necessary.

Federal Long Term Care Insurance Program–If a claim is denied, you will be able to request reconsideration within 60 days and the carrier will respond within another 60 days. If the reconsideration decision is again to deny the benefit, you may file an appeal within 60 days that will go to a committee made up of individuals chosen by the John Hancock life insurance company, and others if mutually agreed upon with the Office of Personnel Management. That appeals committee also will issue its decision within 60 days.

If that committee in turn upholds a denial, you may request an appeal to an independent third party to be determined by OPM and the carrier. Again, the request would have to be made within 60 days and a decision would come within 60 days afterward. The third party could, for example, uphold a denial of benefits based on a determination of your capability to perform the “activities of daily living” that serve as triggers for coverage, but it could not intervene in strictly administrative decisions such as whether you have exhausted the pool of money available to you if you choose other than lifetime coverage.

Once you have exhausted this appeals process, you may seek judicial review in federal district court of a final denial of eligibility for benefits or a claim. However, the amount of recovery would be limited to the benefits that would have been payable. Also, suits against OPM or the third-party adjudicator are not allowed, nor are suits under state or local law or regulations.

Federal Dental and Vision Insurance Program–Each plan has its own process and timeframe for reviewing disputed claims, which are explained in its brochure. If an enrollee has completed the plan’s claims dispute process and still disagrees with the plan’s decision, he or she may request that an independent third party, mutually agreed to by the plan and OPM, review the decision. The decision of the independent third party is final and binding. OPM does not review disputed FEDVIP claims.

Flexible Spending Accounts–If you disagree with a decision on payment of a claim, contact FSAFEDS directly at PO Box 36880, Louisville, KY 40232, phone (877) 372-3337, email fsafeds@shps.com. If dissatisfied with the outcome, within 60 days submit a written request to that address or by fax to (866) 643-2245 including an explanation of why you disagree with the denial, based on the program’s summary of benefits, IRS tax policy or other pertinent references. FSAFEDS will respond within 30 days. If dissatisfied with that decision, within 30 days submit a request for reconsideration in writing to the FSAFEDS Appeal Committee, which also will respond within 30 days. The final possible step is that within 30 days of that decision, you may file for review by an arbitrator, whose decision is final and binding on all parties.