How to appeal a denied health insurance claim
How to Appeal a Denied Health Insurance Claim: A Step-by-Step Guide
I still remember the feeling. I opened the mailbox and saw a letter from my health insurance company. It wasn’t a check. It was a denial notice for a procedure I had three months ago. The bill was $3,400. My stomach dropped.
I thought I had done everything right. I went to an in-network doctor. I paid my copay. Yet, there it was in black and white: “Claim Denied.”
If you are reading this, you are probably feeling that same panic right now. But here is the good news I learned after years of fighting these battles: A denial is not a final decision. It is just the start of a negotiation.
According to the Kaiser Family Foundation (KFF), insurers on the marketplace deny about 17% of in-network claims. That is nearly one in five visits. But here is the statistic that matters more: People who fight back win their appeals about 50% to 60% of the time.
I wasted weeks panicking before I figured out the system. You don’t have to. I’m going to show you exactly how to appeal a denied health insurance claim, step-by-step.
Most denials are not made by doctors. They are made by computer algorithms looking for mismatched codes. When you file an appeal, you are often forcing a human to finally look at your file. That is why the success rate is so high. The computer makes mistakes; the appeal fixes them.
Step 1: Diagnose the Denial (Read the EOB)
The Problem: Most people see the words “Not Covered” and assume their policy doesn’t pay for that treatment. They give up immediately.
Why This Happens: Insurance language is confusing on purpose. They send you an “Explanation of Benefits” (EOB) that looks like a bill, but it isn’t one.
The Solution: You need to find the specific “Reason Code” on your EOB. This is usually a two-letter or two-number code next to the denied amount.
I once had a claim denied for an annual physical. I was furious. When I looked closely at the EOB, the reason code said “Incorrect Patient ID.” The doctor’s office had typed my birth year as 1980 instead of 1982. That was it. I called them, they fixed the typo, and the insurance paid 100% of the bill three weeks later.
Common Reasons for Denials:
- Coding Errors: The doctor used the wrong code for your diagnosis.
- Timeliness: The claim was filed too late (usually over 90 or 180 days).
- Medical Necessity: The insurer thinks you didn’t need the treatment.
- Out-of-Network: You saw a provider who isn’t in your plan.
Find your EOB. It’s either in the mail or on your insurance portal. Circle the “Reason Code.” Google that specific code + your insurance company name (e.g., “UnitedHealthcare reason code PR-27”). This tells you exactly what went wrong.
Step 2: The “Peer-to-Peer” Review Strategy
The Problem: If your claim was denied for “Lack of Medical Necessity,” sending a letter might not be enough. The insurance company has doctors on staff who say you didn’t need the care.
The Solution: Request a “Peer-to-Peer” review.
This is something 90% of patients don’t know about. A Peer-to-Peer review is a phone call between your doctor and the insurance company’s doctor.
I learned this from a nurse friend of mine. She told me, “Don’t fight the medical stuff yourself. You aren’t a doctor.” She was right. When your doctor gets on the phone, they can speak the medical language that you and I can’t. They can explain exactly why standard treatments wouldn’t work for you.
How to do it:
- Call your doctor’s office.
- Ask to speak to the “Insurance Coordinator” or “Office Manager” (not the front desk).
- Say this exact sentence: “My claim was denied for medical necessity. Can the doctor please schedule a Peer-to-Peer review with the insurer?”
Does it work? In my experience, yes. I’ve seen complex MRI denials overturned in a 10-minute phone call because the doctor explained a specific symptom that wasn’t in the notes.
Peer-to-Peer reviews often have a tight deadline, sometimes just 7 to 14 days after the denial. Do not wait. Call your doctor the same day you get the denial letter.
Step 3: Filing the Internal Appeal
If the simple fixes don’t work, you must file a formal Internal Appeal. This is where you ask the insurance company to officially review their decision.
The Problem: People write emotional letters. They say, “I’ve been a loyal customer for 10 years!” or “I can’t afford this!” To be honest, the insurance company doesn’t care about your loyalty or your bank account. They care about the contract.
The Solution: Write a boring, factual letter based on medical evidence. You generally have 180 days from the denial date to do this.
I tested different writing styles. The emotional letters got rejected. The letters that cited specific pages of the “Summary of Benefits” got approved. You need to prove they violated their own rules.
The “Magic Words” to Use
In your letter, use these specific phrases. They trigger the reviewers to take you seriously:
- “Standard of Care”: This means the treatment is accepted by medical experts, not experimental.
- “Medically Necessary”: This is the legal standard for payment.
- “Atypical Presentation”: This explains why you needed a different test than a normal patient might.
Should You Hire Help?
You might be wondering if you should do this yourself or pay a professional. Here is how I decide:
| Scenario | Recommendation | Why? |
|---|---|---|
| Bill is under $500 | Do It Yourself | An advocate will cost more than the bill itself. |
| Bill is $500 – $5,000 | Do It Yourself | Use the templates in this guide. The effort is worth the savings. |
| Bill is over $5,000 | Consider an Advocate | For massive bills, professional patient advocates can find loopholes you might miss. |
Call the insurance company and ask for the “fax number for appeals.” Do not mail your appeal if you can avoid it-mail gets lost. Fax creates a digital confirmation receipt. If you must mail it, pay the extra $4 for Certified Mail with a return receipt.
Step 4: The External Review (Your Best Shot)
The Problem: You filed an internal appeal, and the insurance company said “No” again. Most people quit here. They think it’s over.
The Reality: This is actually where your odds of winning go up.
The Solution: Request an External Review. Under the Affordable Care Act, you have the right to have a third party review your claim. This third party is an Independent Review Organization (IRO). They do not work for the insurance company.
Here is the secret nobody mentions: External reviews cost the insurance company money. They often have to pay hundreds of dollars just to have the review done. Sometimes, they will just pay your claim to avoid the hassle and cost of the review.
According to CMS data, nearly 50% of external reviews result in the patient winning. That is a coin flip. Would you flip a coin to save $3,000? I would.
Timeline: You usually have 4 months after the final internal denial to request this.
If your plan is through a large employer (self-funded), the rules are slightly different. These plans fall under a federal law called ERISA. Your “External Review” might go through your company’s HR benefits partner rather than the state. I learned this the hard way after sending paperwork to the wrong office. Ask your HR representative: “Is our plan fully insured or self-insured?”
Step 5: Using the No Surprises Act
The Problem: You went to an in-network hospital for surgery, but the anesthesiologist was out-of-network. You got a huge “surprise bill.”
The Solution: Cite the No Surprises Act. This federal law went into effect in 2022. It protects you from exactly this situation.
I helped a neighbor with this recently. She went to the ER (in-network) but the ER doctor was out-of-network. She got a bill for $1,200. We wrote a simple appeal letter that said: “This claim is protected under the No Surprises Act regarding emergency services at an in-network facility.”
The result? The bill disappeared in two weeks. They re-processed it at the in-network rate.
Resources That Actually Help
You don’t have to fight alone. There are government offices designed to help you for free.
- State Consumer Assistance Programs (CAPs): These are state officials who help you file appeals. Find your state program here.
- State Insurance Commissioner: I always mention in my appeal letters that I am “CCing the State Department of Insurance.” It makes the insurance company nervous. They do not want regulatory audits.
- Patient Advocate Foundation: A non-profit that provides case management services for patients with chronic or life-threatening diseases.
Conclusion: Don’t Let Them Wear You Down
The health insurance system is designed to be exhausting. They are banking on the fact that you have a job, a family, and a life, and that you simply won’t have the time to fight.
But I have proven that persistence pays off. I have saved thousands of dollars just by refusing to accept the first “No.” Remember, 17% of claims are denied, but half of those denials can be overturned if you just push the right buttons.
You have the medical records. You have the law on your side. And now, you have the strategy.
Here’s exactly what to do next:
Step 1 (Do this in the next 5 minutes):
Log into your insurance portal or find the paper mail. Locate your EOB. Write down the “Claim Number” and the “Reason Code.”
Step 2 (Do this in the next 30 minutes):
Call the number on the back of your card. Ask the representative: “Can you explain reason code [Insert Code] in plain English?” Record the date, time, and the name of the person you spoke to.
Step 3 (Do this in the next 24 hours):
If the call didn’t fix it, call your doctor’s office. Ask for the office manager and request a “Peer-to-Peer review” or a “Letter of Medical Necessity.” Set a reminder in your phone to follow up with them in 3 days.
