Why Health Insurance Claims Get Denied and What YOU Can Do.
As a lawyer, I've spent my career navigating the complexities of denied insurance claims. My clients were people who lost a loved one and whose life insurance claims were denied. I represented widows, widowers, children, parents, siblings and estates of the insured person. All of them had one question - how can the insurance company do that? Why would they deny my valid claim? Part of my job was to explain to them the grim reality of the insurance business - even legitimate claims get routinely denied and if you are speaking to an attorney then you are one of the very small percentage of people who decide to do something about the denial. The majority of the people do nothing after they receive a denial letter.
I listened to daughters and sons, wives and husbands as they told me about their loved ones’ health battles and then their own battles with life insurance companies after their claims were denied. I was shocked to learn from my clients that while they were taking care of their ill loved ones, they had to deal with many health insurance claim denials too!
But it wasn't until I received my own health insurance claim denial that I truly understood the frustration and helplessness so many people feel. I had followed all the rules, my doctor had provided all the necessary information, and yet, there it was: the dreaded denial letter. That experience—and the successful appeal that followed—opened my eyes and led me to start this business, creating appeal templates to empower everyone to fight back and win.
This is my first blog in what I hope will be a long journey where I will share my knowledge, experience and give you the guidance to fight a denied insurance claim. If you are reading this, please know you are not alone.
In the USA about 850 million health insurance claims get denied every year according to health-policy nonprofit KFF. And only less than 1% of patients appeal such denials, which, in most cases, get overturned! While I was surprised to read that such a small percentage of people appealed, I also understood why the majority of people did not - they simply did not know they could! After speaking with hundreds of my clients about their ordeal with denied claims one thing I learned is that it may seem an insurmountable task to file an appeal for someone who is dealing with an illness or taking care of someone who is dealing with an illness.
It can be a frustrating and distressing experience to receive a health insurance claim denial. A notice that your health insurer refuses to pay for a service can leave you with the stress of navigating a complicated appeals process while also worrying about the potential of being on the hook for a large medical bill. Fortunately, a claim denial is not the final word. Many denials are the result of errors that can be fixed, and in other cases, a successful appeal can persuade an insurer to change its decision.
Common reasons health insurance claims are denied
Health insurance claims can be denied for many reasons, some of which are simple administrative errors and others that are more complex. Understanding the specific reason for your denial is the crucial first step in any appeal process. Your denial notice, often called an Explanation of Benefits (EOB), should specify the reason for the denial and detail the steps you can take to appeal the decision.
Here are some of the most common reasons claims are denied:
Lack of medical necessity: An insurance company may deny a claim if it determines the service, treatment, or medication was not medically necessary. This often happens if the service doesn't meet the insurer's internal medical policies or if the provided documentation was insufficient.
Out-of-network care: Many health insurance plans, particularly HMOs and PPOs, have a network of approved providers. Receiving care from a provider outside this network can result in a denial or a significantly reduced payment, leaving you to cover the difference.
Missing prior authorization: For certain procedures, tests (like MRIs or CT scans), and medications, your plan may require a "prior authorization" or pre-approval before you receive the service. If this step is missed, the claim will likely be denied.
Incorrect or incomplete information: Simple human errors are a frequent cause of denials. This can include anything from a misspelled name or incorrect policy number to a billing code error made by your provider's office.
Exclusions in your policy: Your insurance plan may explicitly exclude coverage for certain services, like cosmetic surgery, fertility treatments, or experimental procedures.
Lapsed coverage: If your policy has lapsed due to non-payment of premiums or other reasons, any claims for services received during that period will be denied.
Late claim submission: Insurance plans have deadlines for submitting claims. If your provider's office files the claim after this deadline, the insurer may deny it.
My own denial was a classic "lack of medical necessity" case for a procedure my doctor insisted was essential. The experience taught me that what seems medically obvious to a healthcare professional and patient is often seen very differently by an insurance company's algorithm. That's why building a factual, evidence-based case is so critical.
How to appeal a denied claim
Receiving a denial can be stressful, but you have a legal right to appeal the decision. The appeal process typically involves two stages: an internal appeal with your insurance company and, if that is denied, an external review by an independent third party.
Step 1: Gather your documents and understand the denial
First, collect and organize all relevant documents. This includes:
Your insurance card and policy information
The denial letter (EOB), which explains why the claim was denied
Original bills and claim forms from your provider
Medical records, test results, and any relevant physician notes
Next, review the denial letter carefully to understand the specific reason for the rejection. If the reason is unclear or seems incorrect, call your insurance company's claims or customer service department for more information. If it was a simple administrative error, your provider may be able to resubmit a corrected claim.
This step is crucial, and it's where my templates come in. It can be overwhelming to know what information to include and how to format it. My templates provide the structure, so all you have to do is plug in your specific information and evidence. It takes the guesswork out of the process.
Step 2: File an internal appeal
If the issue is not a simple error, the next step is to file a formal internal appeal with your insurance company. This is a written request asking them to reconsider their decision. Your denial letter or insurance website will have instructions for how to file. You typically have up to 180 days (about 6 months) from the date of the denial to file your internal appeal (but I would not wait more than a week!)
Your appeal letter should be direct and factual, not emotional. Include the following:
Your name, policy number, and the claim number
The date of the denial and the specific service denied
Why you believe the claim should be covered, referencing language in your policy if possible
A letter from your doctor explaining why the service was medically necessary for your condition
Any supporting medical evidence, such as test results or peer-reviewed medical studies
My template appeal letters are specifically drafted with these points in mind. They address every point you need to prove and every document you need to submit. All you have to do is type your specific information in blank spaces.
Step 3: Enlist your doctor's support
Your physician's help can be a game-changer. They can provide a letter of medical necessity and may even be able to have a "peer-to-peer" discussion with a medical reviewer at the insurance company to advocate for your case. According to some experts, appeals that include physician statements have a much higher chance of success.
I learned this firsthand. The tipping point in my own appeal was a very specific letter from my doctor that directly countered the insurer's claims. Your medical team is your greatest ally in this fight.
Step 4: Pursue an external review
If your internal appeal is denied, you have the right to request an external review by an independent third party. An external review means that an independent medical professional, not affiliated with your insurer, will review your case. The insurance company must abide by this independent reviewer's decision. You can often file for an external review at the same time as your internal appeal in urgent medical cases.
Step 5: Don't give up
Be persistent. Many insurance companies will deny a claim in the hopes that the policyholder won't take the time to fight it. By carefully documenting your case, enlisting your medical providers, and following through on all levels of appeal, you significantly increase your chances of having the denial overturned. For added support, consider contacting your state's Department of Insurance or a non-profit patient advocacy organization like the Patient Advocate Foundation.
In my videos and guides I will walk you step-by-step along the path of appealing your denied health insurance claim. It seems very stressful and cumbersome, but so is not having your requested care covered. I personally think the beginning is the most important step. Start typing APPEAL on a blank piece of paper or get one of my templates. Do not give up!
Disclaimer: This blog provides general information and is not a substitute for professional legal or medical advice. It is always recommended to consult with your healthcare provider, local attorney and insurance company directly for specific guidance regarding your claim.
You CAN Win Your Appeal
A denial letter is not the final decision. Insurance companies overturn claims every day when people submit a strong appeal.
Whether you use:
➡ The Free Appeal Guide
or
➡ The $29 Professional Appeal Template
—you can absolutely take back control and fight your denied claim with confidence.
Download Your Free Appeal Guide
Get the step-by-step instructions, evidence checklist, and sample wording you need.
Download Free Guide
Need a Full Appeal Letter Template? ($29)
Get a professionally drafted, fill-in-the-blank appeal letter tailored for medical claim denials.
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