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Understand CHIP Denials and Appeals

There are two reasons you may receive a CHIP denial letter: The state has declined to give you coverage, or the state is denying you a particular medical service. It is important to know what to do in each situation, because receiving a denial letter does not necessarily mean you are out of options. In some cases, you have the ability to appeal your denial in order to seek a different decision. However, appealing a CHIP decision can be complicated. Therefore, it is important to familiarize yourself with the appeals process if you receive a letter of denial.

Unfortunately, a CHIP appeal may not be possible if the program says that your children are not eligible for coverage. Instead, you may be directed to enroll in the marketplace under a special enrollment period (SEP). However, you will be allowed to seek enrollment again in the future if your income changes or you relocate. If you receive a CHIP denial letter, depending on the state you reside in, you may be able to appeal a decision as many as two or three times. If you are denied benefits for a medically necessary service, you should complete as many steps in the appeals process as you can. The sections below describe how to handle a denial, reasons you may be denied and how to file an appeal.

Understand CHIP Application Denials

There are several eligibility requirements in place for those who wish to qualify for the CHIP program, and they can vary between states. The program is designed for low-income families who make too much money to qualify for Medicaid but still need financial assistance paying for insurance. Generally, the program is meant to cover children, not adults, and because it is a state-run program, income requirements vary by location. In general, those who wish to access CHIP benefits must meet the following requirements:

  • Be 19 years of age or younger
  • Have an income limit below 200 percent* of the Federal Poverty Level (FPL)
  • Be a U.S. citizen or legal resident
  • Reside in the state the application will be submitted in

*NOTE: This is based on the average family income of CHIP enrollees. Eligibility requirements can vary between states.

To learn more about the CHIP program, download our informative guide to CHIP.

On some occasions, you may apply for coverage for your children and receive a CHIP denial letter instead. Your denial letter should describe the reason your application was turned down. Typically, it will also include a semi-completed application to a Health Insurance Marketplace program. When you are denied benefits through CHIP and Medicaid, you have the ability to enroll in a Marketplace plan outside of the annual enrollment period. This is called a special enrollment period (SEP). You must select a Marketplace plan within 60 days of receiving your CHIP denial.

What Are Denial of Medical Services?

If your children are enrolled in the Children’s Health Insurance Program (CHIP), they may sometimes be denied requested medical services. This is because many of the more complicated or expensive procedures covered by CHIP require prior approval. The state only approves treatment that is medically necessary and prudent. This is an effort to minimize fraud and abuse of the system. In some cases, that could result in a denial of a request for a medical service you believe is necessary. The state may sometimes disagree with you on the definition of medically necessary. Luckily, if you do receive a CHIP denial letter, you have the option to appeal the denial.

The CHIP program will deny claims for medical services that it believes are fraudulent or unnecessary. This is in an effort to minimize false claims both from patients and from medical providers. However, in many cases, you may receive a denial of benefits for a service you believe is medically necessary to your child. Appealing a denial from the CHIP program can seem overly complicated and difficult to achieve. Additionally, not all appeal requests will be approved, which means it is possible you will be denied a second time. However, in many cases, the state may agree upon further review that your medical service is required. You may be able to appeal it more than once if you are denied again, which means you have multiple chances to seek approval.

To learn more about your appeal options, download our comprehensive guide.

How to Appeal a Service Denial

If you receive a CHIP denial letter for a medical service you requested, it should contain information on how to begin the appeals process. Your letter must explain the reason why you were denied permission for the medical procedure. You can file an appeal by mail or by phone in most states. There will be a deadline for how quickly you must file the appeal, typically ranging from 30 to 90 days. Make sure you submit your CHIP appeals request within the deadline, or your request may be rejected automatically. To request an appeal by phone, call your CHIP program agency or health insurance provider, depending on what your letter specifies. State that you would like to appeal a decision regarding a medical procedure. The service representative will walk you through the process of filing an appeal, including how to gather medical records if necessary. To request an appeal by mail, submit a letter stating your intent to appeal to the address listed in your handbook or enrollment card.

When you request an appeal through the CHIP program, the state agency or provider will reconsider the decision. If upon reconsideration, it concludes that your request has merit, you will receive written notice of approval. If not, you will receive another CHIP denial letter. You may be able to appeal the decision again at this stage. If you believe you require a third-party reviewer, you can request that an Independent Review Organization (IRO) consider your case. The IRO will review your request for medical services and issue a final, binding decision. If an IRO denies your request for a medical procedure, it will not be covered by CHIP benefits.

In some cases, you may be able to make an expedited CHIP appeal in the case of emergency care. An expedited appeal can be resolved in as little as a day, depending on your health care provider. This allows you to request a medical procedure without waiting through the entire appeals process. If you believe you are turned down for emergency care unnecessarily, you should request an expedited appeal.