Most Americans have prescription drug coverage, but that doesn’t mean your health insurance plan will cover a medication that the doctor orders. There are several reasons why an insurance company denies coverage for a drug—and several steps you can take to appeal that decision.
More than 161 million American adults – that’s roughly 1 out of every 2 people – use prescription medications, according to the Health Policy Institute at Georgetown University. However, a poll released by NPR, the Robert Wood Johnson Foundation, and the Harvard T.H. Chan School of Public Health in 2020 revealed that when a patient’s insurance plan won’t cover the cost of a certain prescription drug, nearly half opt to go without. It doesn’t have to be that way.
In some cases, the reason for your denial may be as simple as a clerical error. In others, getting your insurance plan (often referred to as the payor) to cover a prescription will take time, potentially a mountain of paperwork, and persistence.
Reasons an insurer may deny coverage:
The first step: Call your insurance company to find out why the medication was denied. Here some questions you should ask:
Based on the answers, you may qualify for a coverage exception or may need to file an internal appeal. Depending on the specifics of your plan, your doctor may be able to ask your insurer’s medical management department or medical director to conduct a peer-to-peer review of the prescription request. That may resolve the issue without requiring a more formal internal appeal or exception request.
If your physician has requested a peer-to-peer review and coverage still is denied, you have the right to challenge the decision. Read your plan’s coverage documents, or call your insurer, to learn the specific process. You also can find this information in your Explanation of Benefits (EOB) or denial letter, as well as in your plan’s Summary of Benefits and Coverage information.
You, your doctor, or an appointed representative may request an exception to your insurer’s formulary or tiering system for a prescription medication. To qualify for an exception, you or your doctor will need to submit a statement about the medical necessity of the drug. This information can be submitted by phone or in writing, depending on your plan’s requirements.
In the request, your doctor should include (if applicable):
Don’t forget to ask if your plan will cover the requested drug until the company makes a decision.
If your insurance plan doesn’t grant an exception request, you may appeal that decision, too.
If you and your doctor agree that this medication is necessary, you’ll need to challenge the insurance company’s decision via an appeal. An appeal (sometimes called a grievance) refers to any of the procedures used to dispute an insurance company’s coverage decision. It is your right to appeal a coverage denial and have it reviewed by a third party, and your insurance company is obligated to fully explain the denial process to you.
There are two main methods of appealing your insurance plan’s decision:
If you (or your doctor) file a claim asking for prescription coverage and it’s denied, the insurance company must notify you in writing with the reason(s).
To file an internal appeal, you must:
If you purchased health insurance through the federal Marketplace established under the Affordable Care Act, your state may have a Consumer Assistance Program (CAP) that can help answer your questions or file an appeal for you. Your state’s department of insurance may also be helpful.
If your insurance company still denies your claim, you can request an external review, which is a reconsideration of your original claim by professionals with no connection to your insurance plan.
Don’t assume your request will be kicked up to the next level automatically. Be sure to communicate your request for a second-level or independent external review to your insurer.
Check your EOB or the denial letter you received after the internal appeal for information about the independent review organization (IRO) that will handle your external review. If your state doesn’t have an external review process that meets the minimum consumer protection standards, the federal government’s Department of Health and Human Services (HHS) will oversee the process.
To qualify for an external review, you need to submit a written request to your insurer within four months of receiving a notice or final determination that your claim was denied. The external review organization will then review your claim and either agree with your insurer’s decision or rule in your favor. Your insurer is required by law to accept the decision, which you should receive within 45 days—or in less than 72 hours if the request is urgent.
Jodi McCaffrey is an award-winning freelance health and wellness writer based in New Jersey.
Don’t despair. There’s help for you: assistance with copays, deductibles and other expenses.
Coalition building. Raising awareness. Encouraging innovation. Changing perceptions and policy. Making medicines affordable.
Clear-cut ideas and solutions. The science, economics and policy of affordability and innovation.