"I Was Denied Life Insurance for a Disease I Never Had": How Incorrect Medical Record Errors Could Ruin Your Plans

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Discover how hidden errors in your medical records could be preventing you from getting approved for life insurance, Medicare supplements, and other important coverages—and learn the exact steps to fix these mistakes. 

The Hidden System That Can Deny Your Insurance Application 

Did you know there's a company that collects your medical records from various healthcare providers, and insurance companies can use these records to potentially approve or deny your applications? 

My client recently discovered this reality in the most frustrating way possible. They were denied life insurance coverage because of a severe COPD diagnosis—a condition they never actually had. The worst part? They had no idea this incorrect diagnosis was in their medical records until the denial letter arrived. 

What is the Milliman Report? 

When you apply for insurance that requires medical underwriting (like certain life insurance and Medicare supplement policies), the insurance company often uses a service called Milliman to gather your health data. Milliman creates a comprehensive report by collecting information from your various healthcare providers. 

Insurance companies use these reports to verify the information you provide on your application. The problem? If there's an error in your Milliman report, you can be denied coverage—even if you've never had the condition in question. 

A Real-Life Example: When Medical Records Are Wrong 

Let me share what happened to my client (with details changed for privacy): 

They were 70 years old, in good health, and applying for a simple final expense policy—the kind that covers funeral costs and remaining bills. These policies are typically easy to get approved. 

Their application looked perfect: no major health issues, good height and weight ratios. Everything indicated a quick approval. 

Then came the shocking denial letter. According to the insurance company, my client had severe COPD. The problem? My client has never had any lung issues whatsoever. 

Why Medical Record Errors Happen 

After investigating, we discovered this incorrect diagnosis came from a routine check-up where an administrative staff member had wrongly coded COPD in a billing claim. 

There are three main reasons these errors occur: 

1. Simple administrative errors:

   Healthcare offices process mountains of paperwork and insurance codes. One wrong click can attach a serious condition to your records that you never had. 

   
   

2. Coding for coverage:

   Sometimes doctors use incorrect codes to help patients get certain tests covered by insurance. They mean well, but these false diagnoses can remain in your records indefinitely. 

   
   

3. Deliberate "upcoding":

   More concerning is when providers record more serious conditions to receive higher insurance payments. Your mild anxiety might suddenly appear as severe depression in your records. 

   
   

Research published in Health Affairs and investigations reported by KFF Health News have highlighted how widespread these issues are, especially in Medicare billing. 

The 3-Step Process to Fix Your Medical Records 

Here's the exact process we used to correct my client's records and get their insurance application approved: 

Step 1: Request Your Milliman Report 

If you've been denied insurance, immediately request your complete Milliman report. You can do this via email for the fastest results, though the insurance company you applied for may automatically send one with your denial letter. 

Step 2: Identify the Errors 

Carefully review the report to identify any incorrect diagnoses and determine which healthcare provider entered the incorrect information. Pay special attention to conditions that seem unfamiliar or severe. 

Step 3: Get Official Correction Documentation 

This critical step requires getting a signed letter from the doctor who entered the incorrect diagnosis, confirming it was an error. This can be challenging, as you're either asking a doctor to admit they made a mistake or, in some cases, acknowledge inappropriate coding practices. 

We have had doctors in the past tell clients they would not sign off on the mistake, completely halting the process. 

Success Story: From Denial to Approval 

After following these steps, we submitted the signed doctor's letter along with a personal letter explaining the situation to Milliman. Though they stated they needed 30 days to investigate, they updated my client's records within just one week. 

The life insurance company received this change in records from Milliman directly. We didn’t have to notify them of the change. The life insurance company then reversed their previous denial, and my client was approved for the life insurance coverage! 

The Troubling Reality About Medical Record Access 

Here's what's deeply concerning: As far as we can tell, you cannot check your Milliman records proactively. You can only see them AFTER being denied for something. 

This system affects millions of Americans who have no idea their records might contain errors until they're denied for critical coverage at the worst possible time. 

Consider these challenging scenarios: 

• What if the doctor who made the error has retired? 

• What if they refuse to acknowledge their mistake? 

• What if you discover a serious medical diagnosis, you were never informed about? (Yes, this happens!) 

  
  

Take Action Now: Protecting Your Medical Records 

Here's what you should do to protect yourself: 

1. If you've been denied any type of insurance recently, immediately request your Milliman report 

2. Review every diagnosis carefully—even ones from years ago 

3. Contact the doctor who entered any incorrect information right away 

4. Get everything in writing and submit formal corrections 

5. Keep copies of all documentation in case you need to address this issue again 

   
   

Need Help with Life Insurance or Medicare? 

If you need personal assistance navigating insurance, Medicare, or retirement planning, reach out to us at NJ Life and Health. We can provide guidance on understanding your options at no cost to you. Call our Toms River, NJ office at 848-226-6897 or visit our website.  

Ken Connolly is a licensed life and health insurance broker and host of the Talking Retirement podcast.