Handle denials and appeals · Lesson 3 of 16
Why was my claim denied?
The short answer
A denial means your plan decided not to pay for some or all of a claim. The reason matters. Some denials are fixed when the provider corrects and resends the claim. Others need an appeal, which asks the plan to review its decision. Your notice should say which.
Key takeaways
- Start with the reason on the notice or EOB. It points to the right next step.
- Coding errors and missing details are often fixed by the provider's billing office, not by an appeal.
- Coverage decisions, such as "not medically necessary," usually need an appeal with supporting records.
A Claim is a request for payment. When a plan says no, it should tell you why in writing.[1]
Different kinds of "no"
- Rejection or return. The claim had a problem, such as a wrong ID number or missing code. The plan did not really decide on it. The provider can usually correct and resend it.
- Denial. The plan reviewed the claim and decided not to pay. Common reasons include care not covered, care outside the network, or care the plan says was not needed.
- Prior authorization denial. The plan said no before the care happened. This is a pre-service decision.
- Appeal. Your formal request for the plan to look again at a denial.
Common reasons and who acts first
- Wrong code, missing information, or duplicate claim: usually the provider's billing office.
- Coverage ended or wrong plan on file: you and the provider update details.
- Not medically necessary or experimental: usually an appeal, with a letter and records from your clinician.
- Out of network or no prior authorization: check if an exception or protection applies, then consider an appeal.
What the numbers say
Denials are common, but rates vary a lot. One independent analysis by KFF found that insurers selling HealthCare.gov Marketplace plans denied 19% of in-network claims in 2024.[2] That figure counts claims, not people. It covers only one market. It does not include claims that were fixed and paid later. It does not tell you why any single insurer denies claims or how your claim will turn out.
What can be different for you
Employer plans covered by federal law (ERISA), Marketplace plans, Medicare, and Medicaid each have their own appeal steps and deadlines. State-regulated plans may have extra state protections. Your denial notice is the best guide to which rules apply to you.
More detail (optional)
Reading denial statistics carefully
When you see a denial rate, ask: Which year? Which insurers or market? Does it count claims or people? Is it the first decision or the final one? Was it before care (prior authorization) or after care?
The KFF figures come from data insurers report to the federal government (CMS public use files).[3] KFF reported that in-network denial rates ranged from 3% to 36% across insurers, and that consumers rarely appeal.[2] These figures describe a market. They do not show insurer motives or predict an appeal result.
Words in this lesson
- Denial
- A decision by your plan not to pay for all or part of a claim or a request for care. The notice should explain why.
- Claim
- A request for payment sent to your health plan, usually by your provider, after you get care.
- Medically necessary
- Care your plan agrees is needed to diagnose or treat a health condition, based on its rules. Plans may deny care they consider not medically necessary.
- Prior authorization
- Your plan's approval before certain care. Approval is not a guarantee of payment.
- Appeal
- A formal request asking your plan to review and change a decision, such as a denied claim or prior authorization.
Related
Where can I go for help?
Free help is often close by: the member services number on your insurance card, the billing office for your provider, your state insurance department, and nonprofit patient advocates.
This is general education. For decisions about your own plan, taxes, or legal rights, check your plan documents or a qualified professional.