Denial Letters – Watch the Details

Yesterday I was looking at a denial letter from a managed care company that denied coverage for residential addiction treatment for a very sick patient.  That letter was wrong in all kinds of ways, and I have a pretty informed hunch that the managed care company will — after a gentle reminder or two — see the error of its ways sooner rather than later.  For today’s post I want to focus on the very first of many errors in the letter.  The patient was requesting coverage for 21 additional residential addiction treatment days, and yet the letter magically reduced that request to a single day.  More precisely, the subject block of the letter — the section that appears before the main text of the letter, and even before the “Dear Patient” line — listed the dates of service as “10/1/2014 to 10/1/2014”.  This was a flat-out lie:  the patient and his treating clinicians were asking for coverage from October 1 to October 21.  I see this kind of calendar sleight-of-hand all the time in denial letters.

This misstatement matters.  It tells us that somewhere in the managed care company’s computer system, this episode is recorded as a dispute about a single treatment day, not 21.  So if a regulator or private attorney were to ask how many days were denied, the answer would come back 1, not 21.  That is a 20-fold decrease in the number of patient days denied!  Multiply this across thousands of patients, and you begin to see how this single bit of legerdemain can almost completely conceal the extent of denials.

So today’s takeaway is this:  read those denial letters carefully, including the block at the top.  And when you demand that the managed care company get its facts straight, be sure to mention any mistakes in the initial block.

This kind of misstatement also has important implications for an insured’s (or a provider’s) ability to seek relief in the Courts through an individual case or a class action.  But that is an issue for another day.