Get her doctor to write a letter that states that the hip replacement is medically necessary and then submit an appeal of the decision, including a copy of the letter. Insurance companies will generally not substitute their judgment for the judgment of the medical professional that is providing patient care.

At the same time, get a copy of the actual policy document (the long one, not the one-page summary) and read it carefully. Sometimes there is fine print you can use to your advantage, by demonstrating that the policy does indeed provide coverage in the given situation.

For example, during my cancer treatment I received a $30,000 bill for hospitalization in a private room. The insurance company said that the policy only covered semi-private rooms and they were billing me for the difference in cost. Upon reviewing the detailed policy, I found that there was an exception for facilities that only have private rooms. Since my stay was in the oncology ward, which only has private rooms, I submitted an appeal and got the bill reduced to $1,000. I then submitted an appeal based on medical necessity -- I was neutropenic (meaning low white blood cell count and an infection could have killed me) during the hospital stay and so had to be in a private room -- and the insurance company reduced the bill to $100.