Internal vs External Review: When & How to Escalate
When your health insurance claim is denied, it’s easy to feel defeated. But a denial isn’t the end of the road — it’s often just the beginning of the appeal process.
Under federal law, you have the right to ask your insurance company to review and reconsider their decision. If they still refuse to pay after an internal review, you can take it one step further: an external review by an independent third party.
Understanding the difference between internal vs external review — and knowing when and how to escalate — can dramatically increase your chances of overturning a denial and getting the coverage you deserve.
What Is an Internal Review?
An internal review is the first step in challenging your insurer’s denial. This means you’re asking the insurance company to re-evaluate its own decision.
When you file an internal appeal, your insurance company must assign people who were not involved in the original denial to review your claim. This ensures some degree of fairness, though the review still happens within the company.
When to Request an Internal Review
You should request an internal review if your claim was denied for reasons such as:
“Not medically necessary”
“Experimental or investigational treatment”
“Out-of-network provider”
“Preauthorization required but not obtained”
“Not covered under your policy”
Essentially, if your denial letter says your claim isn’t covered or doesn’t meet policy criteria, you can (and should) appeal internally.
Timeline for Internal Reviews
Every insurer sets its own deadlines, but federal law (under the Affordable Care Act) sets minimum standards:
Standard internal review: Usually within 30 days for medical services not yet received, or 60 days for services already received.
Urgent cases: If your health is at serious risk, you can request an expedited internal review, often completed within 72 hours.
Always check your denial letter for the specific deadline — missing it could mean losing your appeal rights.
How to File an Internal Appeal
Here’s how to begin your health insurance appeal effectively:
Step 1: Review the Denial Letter
Read carefully why your claim was denied. The reason may be listed as “medical necessity,” “policy exclusion,” or “lack of prior authorization.” This information shapes your argument.
Step 2: Gather Supporting Documentation
Collect all relevant documents, including:
Medical records
Doctor’s notes or referral letters
Test results or treatment plans
A medical necessity appeal letter from your provider
These documents show that your care was appropriate, standard, and necessary.
Step 3: Write Your Appeal Letter
Use a professional insurance appeal template to structure your letter.
Your letter should:
Identify your name, policy number, and claim ID
Explain why the denial was incorrect
Reference your doctor’s supporting documentation
Request a full and fair review
Templates save you time and ensure your letter includes every required detail — increasing your likelihood of success.
Learn more in my FREE Appeal Guide.
Step 4: Submit Before the Deadline
Send your appeal to the address provided in your denial letter — usually your insurer’s Appeals Department. Use certified mail or submit through your online member portal, and keep proof of submission.
What Happens After an Internal Review?
Once your internal appeal is submitted, your insurer must:
Review the decision using qualified medical professionals, and
Provide a written response explaining their final determination.
If your internal appeal is approved, your insurer will pay the claim. If it’s denied again, you’re entitled to request an external review — a powerful next step that removes the decision from the insurer’s control.
What Is an External Review?
An external review (also called an independent medical review) allows an outside organization — not connected to your insurer — to decide whether the denial should stand.
The decision made by an external reviewer is binding. If the external review overturns the denial, your insurer must pay the claim.
Who Conducts an External Review?
External reviews are handled by:
Independent Review Organizations (IROs), or
State insurance agencies (depending on your state).
These reviewers are licensed medical professionals who specialize in evaluating the medical evidence behind your treatment.
When to Escalate to an External Review
If your internal appeal is denied or your insurer fails to respond within the required timeframe, you can escalate to an external review.
You typically have four months from the date of your internal appeal denial letter to file for an external review.
Common reasons to escalate include:
The insurer still claims your treatment isn’t “medically necessary.”
You’ve provided all documentation, but they refuse to reconsider.
The denial involves experimental, investigational, or policy exclusion reasons.
The appeal process has been unreasonably delayed.
How to Request an External Review
The process varies by state, but these are the general steps:
Check eligibility: Confirm your policy is eligible under federal or state external review laws.
Complete the external review form: Available from your state insurance department or your insurer’s appeal instructions.
Attach supporting documentation: Include your denial letters, appeal correspondence, and medical evidence.
Submit to the designated authority: Either your state’s Department of Insurance or an Independent Review Organization (IRO).
Once submitted, the external reviewer evaluates whether your insurer’s decision meets medical and legal standards.
Timeline
Standard external review: Completed within 45 days.
Expedited external review: Completed within 72 hours if the case is urgent.
Why External Reviews Are So Powerful
External reviews are one of the most effective tools patients have. According to the Kaiser Family Foundation (KFF), in 2023, 47% of external appeals were overturned in favor of the consumer.
That means nearly half of people who escalated their appeal won coverage after an independent review.
In other words — don’t give up. Many denials that seem final can be reversed when an unbiased reviewer looks at the facts.
Tips to Strengthen Your Appeal at Every Stage
Use a professional template: A well-written insurance appeal letter that’s clear, factual, and organized shows credibility. Get your template here.
Include your provider’s letter: A physician’s statement explaining medical necessity adds strong evidence.
Stay organized: Keep copies of everything — letters, emails, and receipts.
Track deadlines: Missing even one date can invalidate your appeal.
Stay polite and persistent: Every reviewer is human; professionalism matters.
Understanding the Difference Between Internal and External Review
Before you decide whether to escalate your appeal, it’s important to understand how an internal review differs from an external review — and what each process means for your denied insurance claim.
An internal review and an external review differ in who handles your appeal, how binding the decision is, and how long the process takes. During an internal review, your insurance company re-examines its own decision, usually completing the process within 30 to 60 days (or faster if it’s an urgent case). The outcome of an internal review is not binding, meaning the insurer can still stand by its denial. However, when strong medical evidence is provided, studies show that 40–60% of denials are overturned during internal appeals.
By contrast, an external review takes your case outside of the insurance company’s control. It is handled by an independent medical reviewer or a state insurance agency, ensuring an unbiased evaluation. The decision from an external review is legally binding, and insurers must follow it. External reviews typically take about 45 days, though urgent cases can be expedited and completed within 72 hours. Roughly 47% of external reviews result in overturned denials, making this an important next step when internal appeals fail. Both internal and external reviews are free for consumers in most states, giving you the opportunity to fight a denial without additional financial burden.
Understanding these differences helps you plan your next move. If your internal appeal is unsuccessful, escalating to an external review may be your best chance to get your insurance claim approved and your medical costs covered.
Final Thoughts
If your claim was denied, remember — you have the right to appeal. Start with a well-prepared internal appeal, and if that doesn’t work, escalate to an external review.
Each level gives you another opportunity to get fair consideration — and with strong documentation and a professional insurance appeal template, you can maximize your chance of success.
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