Health Insurance Denials: Prior Authorization, Internal Appeals and External Review

Health insurance denials can delay care and cause large bills. Many denials are overturned on appeal, especially when the doctor explains why treatment is necessary. Learning the process and deadlines improves your chances.

Why claims and services are denied

• The insurer says the service is not medically necessary.
• Prior authorization was not obtained.
• The provider is out of network.
• The service is considered experimental.
• Coding or billing errors.
• Policy exclusions or benefit limits.
• Missing information.

Steps to appeal

1. Read the denial and explanation of benefits to learn the reason and the appeal deadline.
2. Ask your doctor for a letter of medical necessity and supporting records.
3. File an internal appeal in writing by the deadline.
4. Request expedited review if delay could harm your health.
5. Keep copies of everything and note phone calls.
6. If the internal appeal fails, request external review by an independent organization.

External review rights

Most health plans must offer external review for certain denials, including medical necessity and experimental treatment decisions. An independent reviewer decides, and the insurer must follow the decision if it favors you. Deadlines are often four months from the final internal denial, so check your notice. Some states run their own external review programs.

Prior authorization problems

Insurers often require prior authorization for tests, procedures and medications. Delays and denials can occur. Ask your doctor's office to submit complete documentation and follow up. If care is urgent, request expedited review. If the insurer says information is missing, provide it quickly and keep proof of submission.

Surprise billing and out-of-network care

Federal and state laws protect patients from certain surprise out-of-network bills for emergency care and some non-emergency services at in-network facilities. If you receive a surprise bill, ask your insurer and provider to resolve it and file complaints if necessary. Do not pay until you understand your protections.

Employer plans and state regulators

Employer-sponsored plans may be governed by federal law, while individual plans are regulated by states. Complaints may go to the state insurance department or the Department of Labor, depending on the plan. Your human resources department may also help with employer plans.

Prescription drug denials

Drug denials often involve formulary rules, step therapy or prior authorization. Ask your doctor to submit a formulary exception request explaining why alternatives are inappropriate. Appeal if denied and request expedited review if needed. Manufacturer assistance programs may help.

Real-life scenarios

1. A patient's MRI is denied, and the doctor's letter and an internal appeal lead to approval.
2. A patient wins external review after the insurer denies a therapy as experimental.
3. A patient misses the appeal deadline and has to pay out of pocket.

Common mistakes to avoid

• Missing appeal deadlines.
• Not getting a doctor's letter.
• Skipping external review.
• Paying bills before appealing.
• Not keeping copies.
• Not requesting expedited review for urgent care.

Questions to ask a professional

• Why was the claim denied?
• What documentation will help?
• What are the deadlines?
• Can I request an expedited appeal?
• Is external review available?

A practical action plan

1. Read the denial and note deadlines.
2. Ask your doctor for a letter and records.
3. File the internal appeal.
4. Request external review if needed.
5. File regulator complaints if unresolved.

Terms you may hear

• Prior authorization: insurer approval before service.
• Medical necessity: care needed to diagnose or treat a condition.
• Explanation of benefits: a statement of what was paid or denied.
• External review: independent review of a denial.
• Formulary: a list of covered drugs.

Working with your doctor's office

Your provider's staff can help with authorizations and appeals. Ask them to submit complete records, test results and a letter explaining why the treatment is necessary and why alternatives are inappropriate. Follow up regularly and ask for copies of submissions. Providers often know how to cite clinical guidelines.

Keeping records of calls and letters

Note the date, time, name and reference number for every call. Save letters, explanation of benefits forms and portal messages. If a representative gives you information that conflicts with your policy, ask for it in writing. Organized records help in appeals and complaints.

Financial protections while you appeal

Ask the provider whether they will hold billing while an appeal is pending. Request payment plans and financial assistance programs for large bills. Understand that paying a bill does not prevent you from appealing, but keep proof of payment in case you are reimbursed.

Frequently asked questions