Federal rules ensure that none of the millions of people who signed up for Obamacare can be denied insurance — but there is no guarantee that all health services will be covered.
To help make sure a patient's claims aren't improperly denied, the Affordable Care Act creates national standards that allow everyone who is denied treatment to appeal that decision to the insurance company and, if necessary, to a third party reviewer.
For Tony Simek, a software engineer in El Mirage, Arizona, appealing was the only way he was able to get treatment for sleep apnea. Though mild for many people, the condition had become life-threatening for Simek.
"I had actually gotten to a place where I had fallen asleep while driving a vehicle," Simek says. "That's something that would normally have never ever happened to me."
Simek's doctor recommended he go to a lab to undergo another sleep study test to see if his night-time breathing machine needed adjustment. But his insurance company denied the test.
"I was rather surprised," Simek says, "so I reached out to my doctor to find out why. My doctor had been told [by the insurance company] that it was 'not medically necessary' in their judgment of my health condition."
Simek spent hours on the phone with the health plan, trying to get approval for the test. The insurance company sent him four denial letters. Simek has job-based health insurance through a California employer, so he filed an appeal with the California Department of Insurance.
"I have never had a problem with health insurance prior to this," Simek says.
Capital Public Radio analyzed data from California and found that about half the time a patient appeals a denied health claim to the state's regulators, the patient wins.
The picture is similar nationally. A 2011 GAO report sampling data from a handful of states suggests that even before the new standardization for appeals was implemented under the Affordable Care Act, patients were successful 39 to 59 percent of the time when they appealed directly to the insurer. When appealing to a third party (such as the state insurance commissioner), patients also were often successful in getting the service in question — patients won 54 percent of such decisions in Maryland, in the GAO sampling, and 23 percent in Ohio.
"It's often very worthwhile for a consumer to appeal," says Cheryl Fish-Parcham, who directs the private insurance program at Families USA, a nonprofit that supports the new health law. "It's a really important protection for people," she says.
Until a few years ago, Fish-Parcham says, the rules regarding such appeals varied by state and employer.
"Insurers often get it wrong the first time," she says. "So if you've been denied a health care service, it might be because the plan didn't understand why that service was needed and why it fit their guidelines."
Administrative errors are the source of many denials, says Peter Kongstvedt, a senior health policy faculty member at George Mason University.
"It can be an error on the health plan side," he says. "Maybe they put somebody in the system wrong and they don't know that [he or she is] eligible yet. Or a data entry error occurs, and the computer says, 'Oh, we don't pay for this service on that diagnosis,' — that type of thing."
Other denials, like Simek's sleep test, are based on judgments of medical necessity. Insurers may consider a treatment experimental. Kongstvedt, a former executive in the managed health care industry, says such decisions require human discernment.
"The computer doesn't — usually doesn't — make that decision," he says. "It simply flags it and then it gets reviewed — first by a nurse reviewer, who then presents it, usually, to a medical director," he says.
Insurers say medical studies support their decisions.
"The more evidence that's available about the appropriateness and effectiveness of a particular drug or treatment or technology — that's what drives what's covered," says Robert Zirkelbach, of America's Health Insurance Plans, the trade group representing insurers.
Zirkelbach says only about 3 percent of claims are denied. And, he adds, insurers support the new strengthening of the appeals process.
"Health plans are committed to getting it right," he says.
Appealing the denial was the right thing for Tony Simek. Ultimately, a California regulator overruled his insurer, and Simek got the test.
"I have been sleeping well ever since," he says.
The federal law requires insurers to notify patients of their right to appeal. But Fish-Parcham says many patients are not exercising that right as frequently as they should.
This story is part of a reporting partnership with NPR, Capital Public Radio and Kaiser Health News.