Protect yourself against health insurance reversal

In 2008, Joan Gagliardi was diagnosed with a rare autoimmune disease that caused scarring on internal organs, including her windpipe. It began to choke off her ability to breathe, but doctors at the University of Miami Hospital kept the damage in check with a treatment known as IVIG: Infusions of immunoglobulin.

The bad news came in 2010, when Gagliardi learned that her insurance company, Highmark Blue Shield of Pennsylvania, which had previously approved the expensive treatments, had reversed itself. The denial was retroactive, leaving Gagliardi liable for $1.2 million or approximately $50,000 for each infusion.

Fortunately for Gagliardi, the hospital didn’t press its claim, choosing instead to negotiate with Highmark. This year they settled up, with Highmark agreeing to pay $382,229. Gagliardi was off the hook.

Surprisingly, it’s not uncommon for an insurer to reverse itself, even after a claim is paid. State laws vary, but companies often take up to a year to perform “utilization reviews,” in which they re-examine claims that they’ve already processed.

In some cases, decisions can be reversed - leaving patients holding the bag - even years later.

“For example, if you have 2 health plans - yours and your spouse’s - and the one that should have paid second actually paid first, they will go back and reverse their payments years later,” explains Jennifer Jaff, Executive Director of group called Advocacy for Patients with Chronic Illness. “It’s a huge nightmare for consumers, but it happens. “

If an insurer denies your claim either before or after treatment, you do have the right to appeal: It’s guaranteed, under the health care law that president Obama signed in March, 2010. Of course a guarantee of appeal is no guarantee that the appeal will be successful.

Fortunately, there are things you can do to minimize your risk:

1) Make sure you're pre-approved. Unless you’re in the midst of an emergency, talk to your doctor to make sure any treatment - especially an expensive one - is pre-approved. That means your doctor has talked with your insurance company in advance, and received a promise that the treatment will be paid for.

2) Get help. Your doctor, hospital business office or employee benefits office can be a lot more powerful in making an appeal than you are alone. You can also get help from non-profit groups like Advocacy for Patients with Chronic Illness, or the Patient Advocate Foundation.

3) Be persistent. "You may go through three or four levels of appeals before you get a favorable resolution," says Nancy Davenport-Ennis, co-founder of the Patient Advocate Foundation.

4) Use the right words. Certain words will trigger a denial. For example, sometimes insurance companies refuse to pay for surgeries related to cleft lip or palate, saying it's not medically necessary. When parents appeal saying the child needs the surgery for "cosmetic" reasons or to "enhance esteem," the appeal often fails, according to cleftAdvocate, a group that works with families. Appeals that mention problems with "biting," "chewing," or "swallowing" are more likely to work.

5) You may need a lawyer. If all else fails, there are attorneys who specialize in insurance cases.

It’s worth saying, not all insurance denials are unreasonable. Coverage guidelines “are created by physicians who assess medical evidence, medical outcomes and overall health benefits to patients,” says Aaron Bilger, a spokesman for Highmark. “It’s to protect you.”

Dr. Christine Savage, who treated Joan Gagliardi, says the IVIG treatments kept her patient off a respirator. After a break of several months, Gagliardi began another round of IVIG in October. This time, Highmark said it would pay for 6 months, then evaluate whether it makes sense to continue.

Gagliardi says Savage and her team say they’ll do whatever it takes.

“We’ll just keep fighting the fight, to make sure I’m able to live as normal a life as possible with a progressive illness.”

For more on Joan Gagliardi's experience, watch “Sanjay Gupta, M.D." at 7:30 a.m. ET Saturday and Sunday.