AUDIE CORNISH, HOST:

Millions of people have signed up for health coverage under the Affordable Care Act. The new rules ensure that no one can be turned down for insurance but there's no guarantee that all services will be covered. What is guaranteed is that anyone denied treatment can appeal.

Capital Public Radio's Pauline Bartolone reports from Sacramento.

PAULINE BARTOLONE, BYLINE: Sleep apnea is a common condition. But for Tony Simek, who works as a software engineer outside of Phoenix, Arizona, his loss of sleep became life-threatening.

TONY SIMEK: I had actually gotten to a point where I'd actually fallen asleep while driving a vehicle.

BARTOLONE: Simek's doctor recommended he go to a lab to get another sleep study to adjust his nighttime breathing machine. But his insurance company denied the test.

SIMEK: I was rather surprised by that, so I reached out to my doctor to find out why. And apparently my doctor had been told that it was not medically necessary in their judgment of my health condition.

BARTOLONE: Simek spent hours on the phone with the health plan, trying to get the service. The insurance company sent him four denial letters.

SIMEK: I have never had a problem with health insurance prior to this.

BARTOLONE: Simek has job-based health insurance through a California employer, so he filed an appeal with the California Department of Insurance. Data show about half the time a patient challenges a health care denial to the state, the patient wins.

CHERYL FISH-PARCHAM: It's often very worthwhile for a consumer to appeal. It's a really important protection for people.

BARTOLONE: Cheryl Fish-Parcham is an insurance expert with Families USA. She says the Affordable Care Act provides that every insured person has the right to appeal a denial to the health plan and to an expert outside reviewer. Until a few years ago, the rules varied by state and employer.

FISH-PARCHAM: Insurers often get it wrong the first time. And so if you've been denied a health care service, it might be because the plan didn't understand why that service was needed and why it fit their guidelines.

BARTOLONE: Another problem could be administrative error, says Peter Kongstvedt. He used to manage health plans. Now, he's at George Mason University in Virginia.

PETER KONGSTVEDT: It can be an error on the health plan side. Maybe they put somebody in the system wrong and they don't know that they're eligible yet. Or data entry error occurs and then the computer says, oh, we don't pay for this service on that diagnosis, that type of thing.

BARTOLONE: Other denials, like Simek's sleep test, are based on medical necessity. Or insurers may consider a treatment experimental. Kongstvedt says such decisions require human judgment.

KONGSTVEDT: The computer doesn't - usually doesn't make that decision. It simply flags it. And then it gets reviewed first by a nurse reviewer, who then presents it usually to a medical director.

BARTOLONE: Insurers say medical literature backs up their decisions. Robert Zirkelbach is from America's Health Insurance Plans, the trade group representing insurers.

ROBERT ZIRKELBACH: The more evidence that's available about the appropriateness and effectiveness of a particular drug or treatment or technology, that's what drives what's covered.

BARTOLONE: Zirkelbach says only about 3 percent of claims are denied and insurers support the strengthening of the appeals process under the Affordable Care Act.

ZIRKELBACH: You know, health plans are committed to getting it right.

BARTOLONE: Appealing was the right thing for Tony Simek. A California regulator overturned his insurer's denial and he got the test.

SIMEK: And I have been sleeping well ever since.

BARTOLONE: The federal law requires insurers to notify patients of their right to appeal. Families USA says it's an opportunity people are not using as much as they could. For NPR News, I'm Pauline Bartolone in Sacramento.

CORNISH: This story is part of a partnership with NPR, Capitol Public Radio and Kaiser Health News.

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