Sample Member Claim Denial Letter - Download as DOC

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                      [MEDICAL GROUP OR IPA LETTERHEAD or {MG/IPA Name}]

                                        [Sample Member Claim Denial Letter
                                          (Notice of Initial Determination)]

{Date}


{Member Name}                                Member Number:      {Member Number}
{Address}                                    Provider:           {Provider of Service}
{City, State, Zip}                           Date of Service:    {Date of Service}
                                             Amount Denied:      ${Amount Denied}

Dear {member name}:

We have received your claim regarding the above referenced provider. This claim has been denied for the
reason listed below:


                            {INSERT REASON FOR DENIAL OF CLAIM}
                   [See Commercial Claim Denial Reason Guide for claim denial message.]


You are responsible for payment of this denied charge. If you have any questions regarding this notice or
your financial liability for denied charges, please contact

                                                {Health Plan Name}
                                           at {Health Plan Phone Number}
                                      or {TTY/TDD Phone Number} (TTY/TDD).


                                         How to Dispute This Determination

If you believe that this determination is not correct, you have the right to appeal the decision by filing a
grievance with your health plan. Please submit a copy of your denial notice and a brief explanation of
your situation with any other relevant information to the address or telephone number below:

                                                 {Health Plan Name}
                                         Attention: Appeals/Grievance Unit
                                                     {Address}
                                                     {Address}
                                                {Telephone Number}




                              Department of Managed Health Care Complaint Process
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[If your letter system can bold selected words or numbers within a paragraph without bolding everything
in that paragraph, you may display this entire section as a single paragraph with bolding where shown. If
not or if your system can’t bold at all, you must use centered text as shown to place best-possible emphasis
on that text.]

The California Department of Managed Health Care is responsible for regulating health care service plans.
If you have a grievance against your health plan, you should first telephone your health plan,

                                                    {Health Plan Name},
                                             at {health plan telephone number}
                                      {health plan TDD, TTY or TDHI phone number}

and use your health plan' s grievance process before contacting the department. Utilizing this grievance
procedure does not prohibit any potential legal rights or remedies that may be available to you. If you
need help with a grievance involving an emergency, a grievance that has not been satisfactorily resolved
by your health plan, or a grievance that has remained unresolved for more than 30 days, you may call the
department for assistance. You may also be eligible for an Independent Medical Review (IMR). If you
are eligible for IMR, the IMR process will provide an impartial review of medical decisions made by a
health plan related to the medical necessity of a proposed service or treatment, coverage decisions for
treatments that are experimental or investigational in nature and payment disputes for emergency or urgent
medical services. The department also has a toll-free telephone number

                                                (1-888-HMO-2219)
                                                   and a TDD line
                                                  (1-877-688-9891)
                      for the hearing and speech impaired. The department' s Internet Web site
                                            http://www.hmohelp.ca.gov
                        has complaint forms, IMR application forms and instructions online.


                                                 Possible ERISA Right

You may have the right to bring a civil action under Section 502(a) of the Employee Retirement Income
Security Act (ERISA) if you are enrolled in an employee benefit plan subject to ERISA, and all required
reviews of your claim have been completed. You may consult with your employer’s benefit plan
administrator to determine whether your employer’s benefit plan is subject to ERISA. Additionally, you
and your health plan may have other voluntary alternative dispute resolution options, such as mediation.


Sincerely,



{Name of Person or Dept}

cc:       Member file
          Provider of Service

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          {Health Plan – (whenever health plan specifically requires submission for retrospective or
          prospective review)}

                                             [END OF LETTER]




[THE PAGES THAT FOLLOW ARE INFORMATIONAL AND ARE NOT PART OF THE LETTER.
    THEY MUST BE DELETED PRIOR TO IMPLEMENTING OR ISSUING THE LETTER.]




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 [THIS PAGE AND THE PAGES THAT FOLLOW ARE INFORMATIONAL AND ARE NOT PART
       OF THE LETTER. THEY SHOULD NOT BE SENT TO MEMBER OR PROVIDER.]


The following documents are provided for your reference and information to aid you in working with this
ICE Tool:

    History of Revisions

    Instructions

    FAQs




[Original: 3/01 Revised: 12/23/02 ]                        [file: b53c97d8-552a-4cf5-bc9d-5a16dfacf59e.doc]
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                                           History of Revisions

12/23/02 This revision incorporates a summary description of ERISA rights. Some redundant health
         plan contact information was consolidated, some dispute language was clarified, some headers
         were added to separate types of information. Also, DMHC-required language, including the
         IMR text has been replaced by new language issued by the DMHC this fall. Inclusive braces {
         } were added to distinguish {text inserts} from [instructions or descriptions] in the template.
         More about the use of braces is explained on one of the pages below. This revision has added
         pages that are not part of the letter, but are aids to understanding the letter, including: a history
         of revisions (this page), instructions, and a place-holder for frequently asked questions (FAQs).
         This letter template is ICE-approved and implementation is due by 3/1/03. The DMHC has
         participated in the development of some of the new language.

3/01           The original version of this ICE-approved template was presented in an ICE Claims
               Standardization Seminar at this time. The Department of Managed Health Care (DMHC)
               reviewed it prior to publication.




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                                                 Instructions


Implemeting the Denial Notice

    All information in square braces [ ] must be removed prior to implementing the notice.

    All information in inclusive braces { } and the braces themselves must be replaced by inserted text as
     indicated. In particular, denial reasons must include the ICE-standardized denial reason language.

    Exclusions. Denials because a service is directly excluded from coverage by citation in the plan’s
     evidence of coverage (EOC) document require the denial reason language from the “Exclusions”
     section of the “Claim Denial Reasons Guide.” However, some excluded procedure or service codes
     may fall within the full range of categories of codes such as oral surgery or plastic surgery. Some
     codes within those categories may be covered as part of post-traumatic, restorative care. Thus, denials
     of any codes that fall in those broad categories should be made as medical-necessity denials and not as
     direct exclusions. To continue with these examples, no oral surgery or plastic surgery codes should be
     cited using the “Exclusion” denial reason, because medical review should occur and denials would be
     due to medical necessity, using the appropriate “Not a Covered Benefit” reason.

    The ICE Claims Standardization Team is currently refining the matrix to revise “Not a Covered
     Benefit” reasons where medical necessity decisions are involved. The target for distribution of the next
     revised matrix is later in 2003.

    Strongly recommended as a best practice is that all reason inserts be automated through the use of
     different final disposition codes in your claim system.

    This letter should be implemented by 3/1/03. At that time, you should send a letter confirming
     implementation to each health plan auditor that reviews your denials. As always when the health plans
     are aware of a target date like this, if your implementation is incomplete, it is a best practice to send
     your health plan(s) a self-initiated corrective action plan that specifies what remains to be done and the
     date by which implementation will be complete.


Time Limits

    Denial notices to beneficiaries covered by ERISA must be mailed within 30 calendar days of receipt
     of a claim that was not contested because added information was needed. If you cannot distinguish
     between ERISA-covered and other beneficiaries, you might wish adopt a best practice of mailing all
     notices for uncontested claims within 30 calendar days for consistency and administrative simplicity.
     Some health plans might require that.

    Denials to Non-ERISA Members: Other denial notices for claims that were not contested because
     added information was needed must be mailed within 45 working days of receipt of a claim.

    Contested: If a claim for a beneficiary covered by ERISA was contested because added information
     was needed, if the requested information is received, any subsequent denial notice must be mailed
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     within 15 calendar days of receipt of the requested information. If you cannot distinguish between
     ERISA-covered and other beneficiaries, you might wish adopt a best practice of mailing all such
     notices within 15 calendar days for consistency and administrative simplicity. Some health plans
     might require that.

    Contested: For non-ERISA members, if a claim was contested because added information was
     needed, if the requested information is received, any subsequent denial notice must be mailed within
     45 working days of receipt of the requested information.


Guidelines for Health Plan Auditors

    The model notice’s ERISA Rights text should be accepted without consequences if it appears in a letter
     that was sent to a non-ERISA-covered beneficiary. It has been worded to allow for that situation.

    Time limits. Time limits to issue denial notices should be audited based on the beneficiary’s ERISA
     status as confirmed independently by the auditor. If the auditor’s health plan has notified the IPA,
     group or capitated hospital that it requires shortest time limits regardless of member's ERISA status, it
     is up to the individual health plan to determine if a deficiency will be cited.

    Special formatting. The template letter indicates some text as bolded or underlined. Wherever
     possible, it has been designed to place emphasis on the information by the location of that text as well
     as by that special formatting. Every reasonable attempt should be made to follow the model. If the
     auditor is given a written attestation that a claim system’s automated letters cannot produce those
     special formats, no deficiency should be found. It should be noted that the minimum 12 point font size
     is not optional.

    As you will see in the implementation section, above, this letter template should be in use for all
     commercial claim member-denial letters issued on or after 3/1/03. At that time, you should receive a
     letter confirming that implementation is complete or a corrective action plan from every claim shop
     that you monitor.




[Original: 3/01 Revised: 12/23/02 ]                            [file: b53c97d8-552a-4cf5-bc9d-5a16dfacf59e.doc]
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                                      Frequently Asked Questions (FAQs)


These may be developed after the January 2003 seminar.




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