A denied claim is not a final answer. Federal law gives you the right to a full internal appeal and, if that fails, an independent external review whose decision is binding on your insurer. Most people accept the denial and pay the bill. Here's what using the process actually looks like.
Understanding why a claim was denied is the prerequisite to appealing it effectively. Common denial reasons fall into two categories: administrative and clinical.
Administrative denials involve procedural issues: the service required prior authorization that wasn't obtained, the provider was out-of-network, the claim was filed past the filing deadline, or there's a billing code error. These are often the most straightforward to resolve because the fix is procedural — get the authorization retroactively approved, have the provider resubmit with corrected codes, or resolve the network status question.
Clinical denials involve medical judgment: the insurer determined the service wasn't medically necessary per their criteria, step therapy wasn't followed, or the level of care wasn't appropriate. These require a substantive medical argument in the appeal. Source: CFPB.
The formal term for a denial, reduction, or termination of a health insurance claim. Federal law requires your insurer to provide an adverse benefit determination notice that explains the specific reason for the denial, references the specific plan provisions or clinical criteria on which the decision was based, and describes your right to appeal and the process for doing so. This notice is your roadmap for the appeal. Source: DOL.
When a claim is denied, you'll receive an Explanation of Benefits (EOB) showing the denial and a separate denial notice. The denial notice is the critical document — it must state the specific reason for denial, the clinical criteria or plan provisions used, and how to appeal. Before doing anything else, get this document in hand and read the specific denial reason carefully. The appeal must directly address the stated reason — a general argument that the care was needed will not be effective if the denial was for a specific clinical criterion your appeal doesn't address.
The internal appeal is your first step. Under the ACA and ERISA, health plans must have an internal appeal process in which a new reviewer — not involved in the original denial decision — re-evaluates your claim. Most plans have two levels of internal appeal, though only the first is federally required.
Appeal deadlines are strict. Federal law requires insurers to allow at least 180 days from the date you receive a denial notice to file an internal appeal — but many plans have shorter deadlines and the plan's own deadline governs. The denial notice will state the deadline. Missing it can forfeit your right to appeal that specific denial. Track the deadline from the date you receive the denial notice, not the date of service. Source: DOL Claims Procedures.
Paying a disputed claim can be interpreted as accepting the denial. If you receive a bill for a denied claim while your appeal is pending, contact the provider's billing office and explain the appeal is in process. Most providers will hold the account while an active appeal is pending. If a provider sends the account to collections during an active appeal, document the appeal timeline carefully — this creates grounds to dispute the collection activity.
An effective appeal is specific, documented, and directly responsive to the denial reason. Generic appeals — "my doctor recommended this and I need it" — are rarely successful. Effective appeals include:
Source: HealthCare.gov.
Your insurer is required to tell you the specific clinical criteria used to deny your claim — often proprietary guidelines from companies like InterQual or MCG. Request the specific criteria document. If your doctor's letter addresses those exact criteria by name and explains why your case meets them, the appeal is far stronger than one that argues general medical necessity without addressing the insurer's specific standard.
If your internal appeal is denied, you have the right to external review by an independent review organization (IRO) not affiliated with your insurer. External review applies to most denials involving medical judgment — medical necessity, appropriateness, experimental treatment. It does not apply to plan exclusions (services the plan simply doesn't cover at all).
The external reviewer is a clinical expert who evaluates your case against independent medical standards — not your insurer's proprietary criteria. External review decisions are binding on the insurer: if the IRO rules in your favor, the insurer must cover the service. External review requests must be filed within four months of the final internal appeal denial. Source: HealthCare.gov External Review.
When your health condition doesn't allow time for the standard appeal timeline, you can request an expedited appeal. Expedited internal appeals must be decided within 72 hours. Expedited external reviews must be decided within 72 hours. Expedited review applies when the standard timeframe could seriously jeopardize your life, health, or ability to regain maximum function. Your doctor should submit documentation of the urgent clinical situation with the expedited appeal request. Source: DOL.
If appeals fail or you need additional help: your state insurance commissioner handles complaints against insurers operating in your state and can investigate improper denials. For employer self-insured plans (ERISA plans), the Department of Labor's Employee Benefits Security Administration handles complaints. Many states also have consumer assistance programs that provide free help navigating insurance denials and appeals. The CFPB also accepts health insurance complaints. Source: CFPB.
A claim denial triggers a legal process — not just a form to fill out. Internal appeals, peer-to-peer physician review, and external review by independent clinicians are all available to you, and each can result in reversal. The keys: get the specific denial reason, have your doctor write a letter that directly addresses those criteria, request peer-to-peer review before filing the formal appeal, and escalate to external review if the internal process fails. External review decisions are binding on your insurer. Most people who accept the first denial never use any of these tools — and many would have prevailed if they had. Source: HealthCare.gov.