Claim Denied? How the Internal and External Appeal Process Actually Works

When a health insurer denies a claim or an authorization, you have a legal right to appeal, first inside the company and then, if it stands, to an independent reviewer with no ties to the insurer. The odds are better than most people assume: analyses by the federal Consumer Assistance program and by KFF have found that when patients pressed internal appeals to completion, insurers reversed roughly 39 to 49 percent of denied claims, and external reviewers overturned a substantial share of the denials that survived — about 40 percent in KFF's sample of external review outcomes. Yet fewer than one percent of denied claims are appealed at all.

This site publishes information, not medical or insurance advice. Appeal deadlines and procedures vary by plan type — employer ERISA plans, marketplace plans, Medicare and Medicaid each have their own rulebooks — so confirm your dates in the denial letter itself, which is required to state them.

Step one: read the denial letter like a claims adjuster

The letter must contain the specific reason for denial, the plan provision relied on, and instructions and deadlines for appeal. Common reason codes translate into distinct strategies. A coding mismatch (the procedure code does not match the diagnosis) is fixed by a corrected claim from the provider's billing office — often within a phone call. A medical-necessity denial requires clinical argument, which means your physician's documentation, not yours. A coordination-of-benefits denial happens when two insurers each think the other pays first; the fix is administrative. An out-of-network or non-covered-service denial may be unfixable, but check the No Surprises Act protections and any continuity-of-care rules first.

The internal appeal

File the internal appeal in writing, before the deadline — typically 180 days from the denial notice for marketplace and most employer plans, though Medicare Advantage uses different windows. The submission has three parts: a short cover letter stating what was denied and why the decision misapplies the plan; the plan language you rely on; and the evidence bundle. For medical-necessity denials, the evidence bundle should include a letter of medical necessity from your treating physician, relevant clinical notes, and any peer-reviewed guideline the insurer's own policy cites — showing that your case meets the medical policy's own criteria is the most persuasive form of argument available.

• Ask for the medical policy. Insurers must provide the clinical criteria used against your claim on request; reading it tells you exactly what the reviewer needs to see.
• Request a peer-to-peer review. For authorization denials, your doctor speaking with the plan's medical director resolves a large share of disputes before formal appeals conclude.
• Ask about expedited review. If waiting could seriously jeopardize your health, federal rules require an expedited timeline rather than the standard one.

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The external review

If the internal appeal fails, most plans offer independent external review: an accredited outside organization — the Independent Review Entity for Medicare Advantage, or an IRO contracted through your state or the federal portal for marketplace and ERISA plans — assigns clinicians who were not involved in the original decision. The insurer is bound by the reviewer's decision when the review is binding, which it is for most medical-necessity and coverage disputes that qualify. External review deadlines are short: commonly four months from the final internal denial, so calendar it immediately. State-run external review programs may have slightly different windows; your final denial letter must tell you which route applies.

Special protections worth checking before you appeal

Three rulebooks regularly change outcomes. The ACA's continuity-of-care protections let patients mid-treatment keep seeing a provider who leaves the network for a transition period. The No Surprises Act protects against many surprise out-of-network bills in emergency and certain facility settings — a bill you never legally owe is an appeal of a different kind, directed at the billing itself. And the ACA bans rescissions except for fraud, so a post-claim attempt to void the policy outright is contestable on its face.

Documentation habits that decide close cases

Appeals are won or lost on paper assembled before they start. Keep every explanation of benefits, save the names and reference numbers from each call, and request your medical records for the disputed dates of service. When the plan's reviewer compares a claim against a policy provision, the side with the organized file usually shapes what gets accepted as fact. Provider billing offices handle corrected claims routinely; asking the practice's billing specialist to review the denial code alongside you frequently uncovers an administrative fix within days.

One more lever applies to employer-sponsored plans governed by ERISA: the plan administrator must, on request and free of charge, provide copies of documents relevant to your claim, including the actual plan document and the internal rules or protocols used to decide it. Requests under this right are answered more carefully than casual phone inquiries, and the documents frequently reveal criteria the denial letter never mentioned. Deadlines under ERISA are also strict for the plan — it must respond to your appeal within defined windows, and missing them can itself entitle you to benefits under case law that benefits attorneys track closely.

What to do this week if you are holding a denial

Call the number on the denial and ask three questions: the exact reason code, the deadline to appeal, and where to send the appeal package. Request the medical policy in writing. Ask your physician's office for a letter of medical necessity and whether they will do a peer-to-peer. Then file before the deadline, keeping copies of everything. A denial letter is the start of a documented process with real reversal rates — not a final bill and not a verdict on whether your care was warranted.