How to Appeal an Insurance Denial: A Step-by-Step Guide

Every year, millions of Americans receive letters from their health insurance company denying coverage for a procedure, medication, or service their doctor ordered. These denials are stressful, confusing, and often wrong.

The good news: most denials can be overturned. According to the American Medical Association (AMA), over 80% of prior authorization appeals succeed when patients actually file them. The problem is that fewer than 1% of people ever do.

This guide walks you through the appeal process from start to finish.

Step 1: Read Your Denial Letter Carefully

Your denial letter contains critical information you will need for your appeal:

• The reason for denial (e.g., "not medically necessary," "experimental," "out of network")
• Your plan's specific policy provision cited for the denial
• The claim number and date of service
• The deadline to file an appeal (typically 180 days under the ACA, but check your plan)

Do not throw this letter away. If you lost it, call your insurer and request a copy along with your complete claim file. Under ERISA (the federal law governing employer-sponsored plans), you have the right to receive this within 30 days of requesting it.

Step 2: Understand Why You Were Denied

Denial reasons fall into a few common categories, and each one has a different appeal strategy:

• "Not medically necessary" — Your insurer disagrees with your doctor. You will need clinical evidence and possibly a peer-to-peer review.
• "Experimental or investigational" — The insurer says the treatment is not proven. You will need published clinical studies and possibly FDA approval documentation.
• "Out of network" — You saw a provider outside your plan's network. The No Surprises Act (effective January 2022) may protect you if you did not have a choice.
• "Prior authorization not obtained" — Your doctor did not get approval before the service. This is often fixable with a retroactive authorization request.
• "Not a covered benefit" — The service is excluded from your plan entirely. This is the hardest to overturn, but external review is still an option.

Step 3: Gather Your Evidence

Strong appeals are built on documentation. Collect the following:

• Your doctor's letter of medical necessity — Ask your treating physician to write a letter explaining why the treatment is essential for your condition.
• Relevant medical records — Test results, imaging, prior treatment history, and anything showing you meet the clinical criteria.
• Clinical guidelines — Published guidelines from medical societies (like the AMA, NCCN, or specialty organizations) that support the treatment.
• Your plan document — The actual plan language (Summary Plan Description or Evidence of Coverage) that covers the treatment.

Step 4: Write Your Appeal Letter

Your appeal letter should be formal, factual, and specific. Include:

1. Your name, member ID, claim number, and date of service
2. A clear statement that you are appealing the denial
3. The specific reason the claim was denied (quote the denial letter)
4. Why the denial is incorrect, citing plan language, medical evidence, and applicable laws
5. A request for the insurer to reverse the denial and process the claim
6. A request for a peer-to-peer review between your doctor and the insurer's medical director

Under the ACA, your insurer must respond to an internal appeal within 30 days for pre-service claims or 60 days for post-service claims. For urgent situations, they must respond within 72 hours.

Step 5: File an External Review if Needed

If your internal appeal is denied, you have the right to an independent external review under the ACA. This means a third-party medical reviewer (not your insurer) will evaluate your case. The external reviewer's decision is binding on the insurer.

To request an external review, file within four months of the internal appeal denial. Your state's Department of Insurance can help if you are unsure how to proceed.

How Lysco Can Help

Writing an effective appeal letter requires understanding insurance law, clinical guidelines, and the specific language that gets results. Lysco analyzes your denial letter, identifies the denial reason, cites the applicable laws and regulations, and generates a customized appeal letter you can review and submit.

Upload your denial letter at lysco.com and get your analysis in under 30 seconds. Your first appeal letter is free.

Key Takeaways

• You have the legal right to appeal any insurance denial.
• Over 80% of prior authorization appeals succeed when filed (AMA, 2024).
• Strong appeals include a doctor's letter, clinical evidence, and specific legal citations.
• If your internal appeal fails, request an external review — the decision is binding on your insurer.
• Do not let a denial letter be the final word. The system is designed to be challenged.

Sources: American Medical Association (2024 Prior Authorization Physician Survey), Affordable Care Act Section 2719, ERISA Section 503, 29 CFR 2560.503-1, No Surprises Act (Public Law 116-260).