About one in six in-network health insurance claims are denied, according to Kaiser Family Foundation data. Most people pay the bill or drop it. Fewer than 0.2% of denied claims result in an appeal, and of those that do get appealed, patients win roughly 40% of the time at the internal appeal level. That number climbs higher when claims go to external review.
The appeals process is more structured and more winnable than most people realize. Here is how it works and what to do at each step.
Every denial notice must include an Explanation of Benefits (EOB) or a denial letter stating the reason for denial and your appeal rights. Common denial reasons include: not medically necessary, service not covered under the plan, out-of-network provider, missing prior authorization, or billing code error. The reason matters because your appeal strategy changes depending on it.
Billing errors and coding issues are the easiest to resolve. Call your provider’s billing department and ask them to verify the diagnosis code and procedure code that were submitted. A single incorrect code can trigger an automatic denial that gets reversed immediately once corrected. This step costs nothing and takes one phone call.
Request your insurer’s internal appeals process by calling the member services number on your insurance card. Ask for the specific documentation required for your type of denial. For a medical necessity denial, you’ll need a letter from your doctor explaining why the treatment was medically necessary, clinical notes supporting that determination, and any relevant medical literature if the treatment is relatively new or unconventional.
Your doctor’s office typically handles this type of peer-to-peer review regularly. Ask your physician to contact the insurer’s medical director directly for a peer-to-peer review call. These calls resolve a significant number of medical necessity denials without requiring a formal written appeal. If the peer-to-peer doesn’t work, submit the written appeal with all supporting documentation and keep copies of everything.
If your internal appeal is denied, you have the right to an independent external review under the Affordable Care Act. External review is conducted by an independent organization that your insurer has no relationship with, and their decision is binding. The insurer cannot overturn it. External review decisions favor patients roughly 40-45% of the time in clinical cases.
To request external review, ask your insurer for their external review process or contact your state insurance commissioner’s office. Most states have a designated Independent Review Organization (IRO) that handles these cases. The process is free for you. Turnaround is typically 45 days for standard reviews and 72 hours for urgent situations.
If you missed the 180-day internal appeal window, you may still have options. First, check whether your employer’s HR department can intervene, especially if your plan is self-funded (common at larger employers). Second, contact your state insurance commissioner’s office, which can sometimes facilitate resolution outside the formal appeals window. Third, if the denial involves a significant amount, a patient advocate or health insurance attorney who works on contingency may be able to help.
No. Insurers are legally prohibited from retaliating against members for filing appeals or complaints. Your coverage terms cannot change as a result of an appeal, and the appeal cannot be used against you in future coverage decisions. File it if you believe the denial was wrong.
