What is a common reason for claim denial in health insurance?

A common reason for claim denial in health insurance is the lack of a referral in Health Maintenance Organization (HMO) plans. HMO plans typically require members to select a primary care physician (PCP) who coordinates their healthcare and provides referrals to specialists. If a patient seeks specialty care or services without obtaining a referral from their PCP, the health insurance company may deny the claim on the basis that the required protocol was not followed.

This structure is designed to manage costs and ensure that patients receive appropriate care within the network. The obligation to obtain a referral helps to streamline services and prevent unnecessary or potentially overlapping treatments. Therefore, when patients bypass this process, claims for related services often cannot be processed, leading to denials.

In contrast, while failing to pay premiums on time can lead to a lapse in coverage, it is not a reason for denying a claim that was submitted while the policy was active. Transferring coverage and switching medications are also not valid reasons for denying a claim; rather, they may necessitate adjustments in coverage or prior authorizations but do not inherently lead to the refusal of claims.