Appealing an Insurance Claim Denial

Guide last updated: April 17, 2026. Hazard class: financial and health. Civic education by a Concerned Parent.

The short version

An insurance denial is a starting position, not a final answer. Most plans have a two-stage appeals process: an internal appeal with the insurer, then an external review by an independent reviewer. A substantial share of appeals succeed — many denials reflect insurer error, documentation gaps, or medical-necessity disagreements that can be resolved with better information. File promptly; deadlines are short.

Read the denial letter

The denial letter is your roadmap. It must tell you:

If the denial letter does not clearly state the reason, that itself can be a procedural violation — request a written explanation. Do not guess. Different denial reasons require different appeals strategies.

Common denial reasons and how to respond

"Not medically necessary"

The insurer has decided the treatment, procedure, or test was not needed. Response: get a letter from your treating physician explaining why it was needed, citing clinical guidelines (NCCN, specialty society guidelines, peer-reviewed literature). If your provider says it was necessary and the insurer says it wasn't, the external reviewer typically decides who is right.

"Experimental / investigational"

The insurer has decided the treatment is not yet standard of care. Response: clinical guidelines, FDA approvals, peer-reviewed literature showing standard use, and your physician's specific explanation of why this treatment applies to your situation.

"Out of network"

Respond with either: (1) proof that this is actually in-network (name, NPI, contract dates), (2) proof that an in-network provider was not reasonably available, or (3) No Surprises Act arguments if this was emergency care or ancillary care at an in-network facility.

"Pre-existing condition"

Mostly prohibited under the Affordable Care Act for ACA-compliant plans. If you have a compliant plan and this is the denial reason, point that out directly. If you have a short-term plan or grandfathered plan, the denial may be lawful.

"Missing information"

Send the specific information the insurer says is missing. Keep proof of submission.

"Coding error"

Often the provider billed under one code but the claim should have been under another. Work with your provider's billing office to resubmit with the correct code.

"Benefit exhausted" or "not covered"

Check the policy. Some "not covered" denials are incorrect; others reflect actual policy limits. If the service is clearly not in the policy, the appeal may not succeed — but check alternative coverages (pharmacy benefit vs. medical, mental health parity rules, etc.).

Internal appeal process

Most plans require an internal appeal first. The process:

  1. File within the deadline. Typically 180 days from the denial for ACA plans; 60 days for some Medicare issues; varies for employer plans. The denial letter will state the deadline.
  2. Write an appeal letter. Identify the claim, the denial, your disagreement, and your requested resolution. Attach supporting documentation (provider letter, clinical guidelines, medical records).
  3. Request a copy of all documents the insurer relied on. You have a right to see the claim file.
  4. The insurer must respond within a specified timeframe. Urgent care cases must be decided in 72 hours; post-service claims in 60 days.
  5. Expedited appeal. If the denial involves ongoing urgent treatment, request expedited review — the timeline shrinks to 72 hours.

External review

If the internal appeal fails, you have the right to external review by an independent reviewer. For ACA-compliant plans, this is a federally-regulated process. For other plans, state insurance law governs.

External review generally decides the claim on its merits — was the treatment medically necessary, was the denial correct, was the policy language applied correctly. External review decisions are binding on the insurer.

In Illinois, external review is administered through the Illinois Department of Insurance. Request external review at insurance.illinois.gov or call 877-527-9431.

ERISA plans (employer group health)

If your plan is self-funded by your employer, it is governed by ERISA (federal law), not state insurance law. ERISA has specific procedural requirements that can affect what arguments work in appeal. If you lose the internal and external appeals, your remedy is a federal ERISA lawsuit — but procedural failures in the administrative appeal process can limit what you can argue in court. For serious ERISA claims, consult an ERISA-specialized attorney before exhausting appeals.

Medicare appeals

Medicare has its own five-level appeals process:

  1. Redetermination by the Medicare contractor
  2. Reconsideration by a Qualified Independent Contractor
  3. Administrative Law Judge hearing
  4. Medicare Appeals Council review
  5. Federal court review

Each level has specific forms and deadlines. The State Health Insurance Assistance Program (SHIP) provides free Medicare counseling and appeals help. In Illinois: Illinois SHIP.

Medicaid appeals

Medicaid denials and terminations are appealed through the state fair-hearing process. In Illinois, you request a hearing through the Illinois Department of Healthcare and Family Services. Request continuing benefits within 10 days of the notice to keep coverage during appeal. Legal Aid Chicago and Illinois Legal Aid Online provide free help with Medicaid appeals.

Mental health parity

The Mental Health Parity and Addiction Equity Act requires most group plans to cover mental health and substance use treatment at the same level as medical and surgical coverage. If your mental health claim is denied and you suspect disparate treatment, raise a parity argument in your appeal and consider filing a complaint with the Department of Labor (for ERISA plans) or the state insurance commissioner.

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