What to Do When Your Insurance Denies a Claim

There are few things more frustrating and concerning than when you open a letter from your healthcare insurer and see the word DENIED. Whether it is for a routine test, a specialist visit, or a larger procedure, a denied claim can leave you feeling overwhelmed, confused, and unsure of what to do next. 

But the good news is that you have rights and you can appeal their decision. Federal law guarantees your right to an internal appeal, followed by an external review if necessary.

Here is a guide to help you understand why denials happen, how you can appeal them, what documents you need, and when to get legal help. 

Why Insurance Claims Get Denied

Insurance companies are obligated to tell you exactly why they denied your claim. Normally, you can find this in the denial letter or under the Explanation of Benefits (EOB). The most common reasons include: 

• Lack of prior authorization - Some services require approval before you receive them.

• Out‑of‑network provider - Even in emergencies, this can trigger a denial.

• Coding or billing errors - Incorrect procedure codes, missing documentation, or clerical mistakes are common.

• “Not medically necessary” - Insurers often deny claims by arguing the treatment wasn’t necessary - even when your doctor disagrees.

• Coverage exclusions - Your plan may not cover certain treatments, medications, or services.

  
  

Understanding the reason for the denial is the first step to appealing their decision. It determines how to approach the appeal. 

What Documents To Gather before You Appeal

A strong appeal all comes down to strong documentation. Healthcare.gov emphasizes gathering as much supporting information and evidence as possible. 

You’ll want to collect:

• Your denial letter or EOB

• Your insurance policy (to confirm coverage rules)

• Medical records related to the claim

• Doctor’s notes explaining why the treatment was necessary

• Bills and itemized statements

• Any correspondence with your insurer or provider

• Referral letters or prior authorization documents (if applicable)

  
  

The more complete your file, the stronger your appeal. 

How to Appeal a Denied Claim (Step‑by‑Step)

As previously mentioned, you have the right to an internal appeal, and if that fails, the right to request an external review by a third party. 

Step 1: Review your EOB or Denial Letter. Your insurer must explain:

• What was denied 

• Why it was denied

• How to appeal

• The deadline for appealing

  
  

Step 2: Verify your coverage. Sometimes the denial is simply an administrative error, and those are often the easiest to overturn. Compare the denial reason with your policy: 

• Was prior authorization required? 

• Is the service covered?

• Is the provider in‑network?

  
  

Step 3: Gather your supporting evidence. This may include: 

• A letter from your doctor 

• Updated medical records

• Corrected billing codes

• Proof of prior authorization

  
  

Step 4: Submit your internal appeal. You should have 180 days (six months) from the date of the denial to file an internal appeal (but confirm this on the denial letter). Your appeal should include:

• A formal appeal letter

• All supporting documents

• Your claim number and insurance ID

• A clear explanation of why the denial is incorrect

  
  

If the internal appeal is denied, you can request an external review, which is handled by an independent reviewer and is binding on the insurer. While many appeals can be handled without a lawyer, there are situations where legal support is extremely helpful:

• Large or complex medical bills: Especially when the denial involves hospitalization, surgery, or ongoing treatment.

• Repeated denials despite strong medical evidence: A lawyer can identify legal violations or bad‑faith practices.

• Insurance refusing to follow federal timelines: This is more common than people realize.

• Disputes involving out‑of‑network emergency care: Surprise billing laws may apply.

• When the denial threatens your health or financial stability: A lawyer can escalate the issue quickly and strategically.

It is important to remember that a denied claim is not always the end of the road. With the right documentation, a structured approach, and an understanding of your rights, you could get your denial overturned. You could win.