Key Takeaways
- Insurers must provide a written explanation for every claim denial, and you have the right to request it.
- Most denials fall into a handful of predictable categories, many of which are correctable through an appeal.
- Internal appeals must typically be filed within 180 days of receiving the denial notice under federal law.
- If an internal appeal fails, an independent external review is available for most plans under the ACA.
- Keeping organized records of every communication with your insurer significantly strengthens an appeal.
What a denial actually means
Receiving a denial notice can feel like a final verdict, but it is not. Under the Affordable Care Act (ACA), most health plans are required to explain the specific reason for a denial in plain language, and they must inform you of your right to appeal. The denial explanation, sometimes called an Explanation of Benefits (EOB) or a denial letter, is the document you need to read carefully before deciding your next move.
Denials generally fall into two broad categories. A coverage denial means the insurer has determined that the service is not covered under your plan. A medical necessity denial means the plan covers the type of service but has decided your specific situation does not meet the clinical criteria for it. These distinctions matter because the evidence you gather for an appeal will differ depending on which type of denial you received.
For guidance on how documentation habits affect outcomes across different types of insurance, see how to file an insurance claim correctly.
Common mistakes that lead to denied claims
Many denials trace back to errors or oversights that happen before a single claim form is submitted. Recognizing these patterns can help you avoid them or address them directly in an appeal.
Using an out-of-network provider without realizing it.
Why it happens: Provider directories are not always current, and many patients assume that a hospital being in-network means every physician working there is also in-network.
Skipping prior authorization for a procedure that requires it.
Why it happens: Patients often rely on their doctor's office to handle administrative steps, and authorization requirements are not always communicated clearly between the provider and the patient.
Filing a claim with coding or billing errors.
Why it happens: Medical billing codes are complex, and a single digit error on a diagnosis or procedure code can trigger an automatic denial that has nothing to do with your actual eligibility.
Assuming a denial for medical necessity is final without a doctor's support letter.
Why it happens: Medical necessity denials often come down to the clinical documentation submitted with the original claim, which may not have included enough detail to satisfy the insurer's criteria.
Failing to keep records of calls and correspondence with the insurer.
Why it happens: Most people assume verbal assurances from a customer service representative are sufficient, especially when they receive a positive answer to a coverage question.
Mistakes in the claims process share a pattern with errors in other types of insurance. The same principles that apply here are explored in the context of auto coverage in this piece on mistakes that can void an auto insurance claim.
The formal appeal process, step by step
17%
In-network claims denied on average
A 2023 KFF analysis of ACA marketplace plans found that insurers denied roughly 17% of in-network claims, with denial rates varying widely across issuers.
Less than 1%
Share of denied claims that are appealed
The same KFF analysis found that consumers appealed fewer than 1 in 10 denied claims, leaving many valid cases unchallenged.
After a denial, you have the right to an internal appeal, which means asking the insurer to review its decision. Federal rules require most plans to decide urgent care appeals within 72 hours and standard appeals within 30 to 60 days. To start, submit a written appeal letter that references the specific denial reason from your EOB, includes supporting documentation (such as a letter of medical necessity from your provider), and cites the relevant sections of your plan documents.
If the internal appeal is unsuccessful, you can request an independent external review. An external reviewer is a third-party organization that is not affiliated with your insurer, and its decision is generally binding on the plan. Deadlines apply here too, so check your denial letter for the specific filing window. Your state insurance commissioner's office can tell you which external review organizations are approved in your state.
Common misconceptions about what insurance covers, and what it does not, can make the appeal process more confusing than it needs to be. The article on insurance myths that cost people real money addresses several of those misunderstandings directly.
This article is for general informational purposes only and is not personalized insurance, legal, or financial advice. Coverage rules, appeal deadlines, and plan terms vary by insurer, plan type, and state. Consult a licensed insurance professional or a patient advocate for guidance specific to your situation.