The American health insurance industry collects $1.5T in premiums each year, denies about 16% of claims, and gets away with most of those denials because only 1% of denied claims are ever appealed.
Of the 1% that get appealed: roughly half win, in full or in part. That's a 50:1 return on the 30 minutes it takes to file an appeal.
Carriers know this. The denial is often the first move, not the final answer.
Mantra: the first denial is an opening offer, not a verdict.
Step 1: Read the denial letter carefully
Every denial includes:
- The specific reason for denial (usually a code: 50 = not medically necessary, 197 = no pre-auth, 22 = covered by another payer, 96 = not a covered service, etc.)
- The appeal deadline (usually 180 days from denial date for ERISA plans, 60 days for some Medicaid)
- The appeal process the insurer requires (internal appeal first, then external)
- The plan documents cited (specific clause they say justifies denial)
Pull the actual plan documents (SBC + SPD) and read the cited section. Often it doesn't actually say what the denial letter implies.
Step 2: Match the denial code to the right counter-move
Code 50 — "Not medically necessary"
Most common, most appealable.
Get a Letter of Medical Necessity (LMN) from your treating physician. It should specifically address: what condition is being treated, why this specific service was chosen, what alternatives were considered and why ruled out, what clinical guidelines support the choice.
Cite specific clinical guidelines (UpToDate, NCCN for cancer, AHA for cardio, USPSTF for screening). Insurers know these names.
Code 197 — "No pre-authorization"
If the provider was supposed to get pre-auth and didn't, you don't owe this. Federal law (No Surprises Act + ERISA) puts the burden on the provider for THEIR administrative failures.
Reply with: "This denial cites missing pre-authorization. Per [Plan Name] contract terms and federal balance-billing protections, the provider, not the patient, is responsible for obtaining required pre-authorization. The provider must absorb this charge. I am not responsible."
Copy the provider's billing department; they often quietly drop the bill.
Code 22 — "Covered by another payer"
Coordination of Benefits issue. Insurer thinks another insurer should have paid first. Common when:
- You have dual coverage (your plan + spouse's plan)
- An accident may be covered by auto/workers' comp/liability insurance
- You recently changed insurance and they think the OLD plan covers it
Resolution: clarify which plan is primary, then resubmit. Often just a paperwork loop.
Code 96 — "Not a covered service"
Check your plan's SPD (Summary Plan Description). If the service IS covered, cite the specific clause.
If genuinely not covered, ask: is there an alternative service that IS covered? E.g. if a specific drug isn't covered, the same molecule from a different manufacturer often is.
Code 204 — "Service not covered by patient's plan"
Similar to 96. Verify by reading SPD. Some plans have specific exclusions; others have only categorical exclusions you can argue around.
Step 3: File the internal appeal
Every plan must offer an internal appeal process. The standard timeline:
- Submit appeal within 180 days of denial
- Insurer decides within 30 days for pre-service appeals, 60 days post-service
- Urgent care: 72-hour expedited appeal available
Send by certified mail OR file via your insurer's appeal portal. Keep proof.
Include:
- Member ID, claim number, date of service, denial date
- Your written appeal letter — clear, factual, cite specific plan provisions
- Letter of Medical Necessity from doctor
- Supporting clinical evidence (UpToDate excerpt, clinical guidelines, peer-reviewed studies)
- Itemized bill
- The denial letter you're appealing
- Any other relevant medical records
Step 4: If denied again — external review
After internal appeal denial, you have a right to external review by an Independent Review Organization (IRO). The carrier doesn't pick the IRO; the state regulator does.
Statistics: IROs side with the patient in ~40-50% of external reviews. This is the most powerful tool you have.
How to request:
- Submit within 4 months of the final internal denial
- File with your state Department of Insurance OR via CMS for federally-regulated plans
- No cost in most states (a few charge a $25 filing fee)
- Decision typically within 45 days; 72 hours for urgent
For self-insured ERISA plans: external review available via the federal HHS process.
Sample appeal letter (use this structure)
[Date] [Carrier Name] [Appeals Address] Re: Appeal of Claim Denial Member: [Your Name] Member ID: [Number] Claim Number: [Number] Date of Service: [Date] Provider: [Name] To Whom It May Concern: I am writing to formally appeal the denial of the above-referenced claim, dated [Denial Date], received [Date Received]. The denial cites reason code [XX] and states: "[Quote the exact reason from the denial letter]." This denial is incorrect because: 1. [Specific factual reason — e.g. "The procedure is medically necessary per the attached Letter of Medical Necessity from Dr. [Name], dated [Date], which establishes [diagnosis] and recommends [procedure] as standard of care per [cited clinical guideline]."] 2. [Reference specific plan language — e.g. "Section [X.X.X] of my Summary Plan Description specifically covers [type of service] when [conditions met]. This service meets all stated conditions."] 3. [Cite supporting evidence — e.g. "Per [clinical guideline / peer-reviewed evidence], [procedure] is the recommended treatment for [condition] and is not considered experimental or investigational."] I have attached: - The denial letter - Letter of Medical Necessity from [Provider] - [Other supporting documents] - Itemized bill I request the claim be re-processed and paid per the terms of my plan. Per ERISA, you must respond in writing within 30 days for pre-service or 60 days for post-service. If this appeal is denied, I reserve the right to request external review. Thank you, [Your Name] [Phone] [Email] [Signature]
What raises your win odds
- Specific factual + clinical citations (not just "please reconsider")
- Doctor-written Letter of Medical Necessity
- Reference to specific plan language showing service IS covered
- Calm, professional tone (anger tanks credibility)
- Multiple data points: clinical evidence + plan terms + factual specifics
- External review if internal appeal denied
Free help is everywhere
- Patient Advocate Foundation (patientadvocate.org) — free case managers for appeals related to chronic disease
- Triage Cancer (triagecancer.org) — cancer-specific appeals help
- National Association of Insurance Commissioners (naic.org) — find your state DOI for external review filing
- Department of Labor EBSA (dol.gov/ebsa) — for ERISA plans, free fiduciary complaints
- Local Bar Association referral — free 30 min consult with insurance attorney
TL;DR
First denial: not the answer. File internal appeal within 180 days with a Letter of Medical Necessity + clinical citations. If denied again, file external review with your state DOI — IROs side with patients 40-50% of the time. The 1% of patients who appeal end up getting paid more than the 99% who don't.