Ohio Subscriber
Answer: You are not wrong; those procedures should not have been bundled. Unfortunately, you'll likely have to appeal to get this mistake rectified.
If manipulation is required before the endoscopy, you are correct to use 43239 (Upper gastrointestinal endoscopy including esophagus, stomach and either the duodenum and/or jejunum as appropriate; with biopsy, single or multiple) and 43450* (Dilation of esophagus, by unguided sound or bougie, single or multiple passes) with modifier -51 (Multiple procedures).
The carrier should have realized that 43450 does not have provisions for an EGD. You have to charge for the endoscopy procedure performed, and then the additional manipulation procedure performed.
This is a problem not usually encountered when dealing with Medicare, but it can pop up when dealing with other payers. Appeal this bundling with all the documentation you can find, and use Medicare as a precedent if you can. When you appeal, include a copy of the relevant Correct Coding Initiative edits and, if you can locate one, a copy of a Medicare payment that doesn't bundle 43239 and 43450.
If the claim is denied again, report the insurance company to the American Medical Association and the Department of Insurance.