You opened the mail and found those dreaded words: claim denied. Now you are wondering, health insurance claim denied what next? The answer is not to panic and not to pay the bill without a fight. Roughly half of all appealed claim denials are eventually overturned, which means the odds are better than most people think.
Every year, millions of Americans face insurance claim denials. According to a Kaiser Family Foundation analysis, insurers in ACA marketplace plans denied approximately 17 percent of in-network claims in a recent year. Many of those denials are based on correctable errors or questionable medical necessity determinations. This guide gives you a clear action plan for what to do immediately after a denial and how to navigate the appeals process.
Step 1: Read and Understand the Denial
Your Explanation of Benefits (EOB) or denial letter is the single most important document in this process. It tells you exactly why the claim was denied, which policy provision the insurer relied on, and what your appeal rights are. Do not skim it. Read every line.
Denials generally fall into a few categories: the service was not covered under your plan, the service was deemed not medically necessary, prior authorization was not obtained, the provider was out of network, or there was a billing or coding error. The category determines your next steps and the type of evidence you need to gather.
Pay special attention to the appeal deadline. Under ACA rules, you typically have 180 days to file an internal appeal, but some plans have shorter windows. Write this date down immediately.
Step 2: Check for Administrative Errors
A surprising number of claim denials are caused by simple mistakes: a wrong diagnosis code, an incorrect procedure code, a misspelled name, or a transposed policy number. Call your healthcare provider’s billing department and ask them to review the claim for errors.
If an error is found, your provider can submit a corrected claim directly to the insurer. This is often faster than a formal appeal and can resolve the issue within a few weeks. If the denial was your insurer’s error, such as failing to recognize your coverage or applying the wrong benefit, call member services and request a reprocessing of the claim.
Step 3: Contact Your Doctor
Your treating physician is a critical ally when your health insurance claim denied what next decision-making begins. If the denial was based on medical necessity, ask your doctor to write a letter explaining why the treatment was required for your specific condition. The letter should include your diagnosis, symptoms, prior treatments attempted, and the clinical rationale for the denied service.
Many insurers offer a peer-to-peer review process, where your doctor can speak directly with the insurer’s medical reviewer. This conversation can sometimes resolve disputes without a formal written appeal, and your doctor may be more persuasive speaking clinician-to-clinician than any letter could be.
Step 4: File an Internal Appeal
If the denial cannot be resolved through a corrected claim or a phone call, file a formal internal appeal in writing. Your appeal letter should include your personal and policy information, the claim number, the date of service, the reason for denial, and your argument for why the claim should be covered.
Attach all supporting documentation: medical records, your doctor’s letter of medical necessity, clinical guidelines, and relevant pages from your policy. Send everything by certified mail with return receipt so you have proof of timely submission. For guidance on structuring your letter, see our article on how to write an appeal letter.
The insurer must decide your appeal within 30 days for pre-service claims and 60 days for post-service claims. Urgent care appeals must be decided within 72 hours.
Step 5: Escalate to External Review
If your internal appeal is denied, you have the right under the ACA to request an external review by an Independent Review Organization (IRO). This is a review by medical professionals who have no connection to your insurance company, and their decision is binding.
You generally have four months from the date of the final internal appeal denial to request an external review. The IRO will evaluate your medical records, clinical guidelines, and the insurer’s rationale, and issue a decision. According to data compiled by state insurance departments, external reviews overturn denials in 40 to 60 percent of cases, making this a step well worth pursuing.
Step 6: File a Complaint With Your State
Your state insurance department regulates insurers operating in your state and can investigate complaints about unfair denial practices. Filing a complaint does not replace the formal appeals process, but it creates an additional layer of accountability. Some state departments actively mediate between consumers and insurers.
The National Association of Insurance Commissioners (NAIC) provides a directory of state insurance departments. Many states also have Consumer Assistance Programs (CAPs) funded by the ACA that offer free help navigating insurance disputes.
Special Considerations for Employer-Sponsored Plans
If you get your insurance through your employer, your plan may be governed by ERISA. ERISA plans have specific appeal requirements, including mandatory timelines and the right to a full and fair review. The critical difference is that if you exhaust your ERISA administrative appeals, your next step is a federal lawsuit rather than a state external review.
Under ERISA, the administrative record you build during the appeal is typically the only evidence a court will consider. This means every document, letter, and medical record you submit during the appeal process matters enormously. The Department of Labor oversees ERISA compliance and offers resources for claimants.
When to Get Professional Help
You do not need a lawyer for every denied claim, but certain situations warrant professional assistance. If the claim involves a large dollar amount, a complex medical necessity dispute, an ERISA-governed plan, or a pattern of repeated denials, an attorney or patient advocate can significantly improve your chances.
Many healthcare attorneys offer free consultations and work on contingency, meaning they only get paid if you win. Patient advocates and billing specialists can also help you navigate the process, identify errors, and build a stronger case. The investment in professional help often pays for itself many times over.
Frequently Asked Questions
Should I pay the bill while I appeal?
Generally, you should not pay the bill while the appeal is pending, as payment can sometimes be interpreted as accepting the denial. However, be aware of any payment deadlines that could send the bill to collections. Contact the provider’s billing department and explain that you are appealing the insurance denial. Most providers will pause collection efforts during an active appeal.
How long does the entire appeals process take?
An internal appeal typically takes 30 to 60 days for a decision. If you escalate to external review, add another 45 to 60 days. The entire process, from initial denial to final resolution, can take three to six months. Urgent appeals are decided much faster, within 72 hours for the internal stage.
Can I appeal a claim denied years ago?
Appeal deadlines are strict, and most plans require you to file within 180 days of the denial. If you missed the deadline, your options are very limited. However, some states allow exceptions for good cause, so contact your state insurance department to explore any remaining options.
What if the denial was for a service I already received?
You can and should appeal post-service denials. The process is the same as for pre-service denials, though the insurer has 60 days rather than 30 days to decide. If the appeal is successful, the insurer will pay the claim and you should not owe the provider anything beyond your normal cost-sharing.
Do Not Give Up
When your health insurance claim denied what next question arises, remember that denial is not the end. It is the beginning of a process that is designed to give you a fair hearing. Follow each step methodically, document everything, and do not hesitate to escalate. For more resources, explore our healthcare policy guide and our overview of healthcare costs.