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Understanding Denials in Medical Insurance

Denials in Medical Insurance Explained

Denial in insurance refers to the decision of an insurance company to withhold payment for a claim or preauthorization. It is the refusal by the insurer to cover the cost of a medical service or procedure. There can be several reasons for a denial, including lack of coverage under the policy, the service being deemed not medically necessary, or the service being considered experimental or investigational.

For example, let’s say that a policyholder submits a claim for a new experimental procedure to treat a medical condition. If the insurance company determines that the procedure is still considered experimental and not yet proven to be effective, they may deny the claim. The policyholder would then have to pay for the procedure out of pocket or find another insurance option that covers the cost.