If you’ve ever opened a letter telling you your insurance claim was denied and simply accepted it, new data suggests you may have given up too soon.
The number that should change how you think about denials
A Bloomberg analysis found that roughly half of health insurance claim denials that are formally appealed end up getting reversed, according to the report About Half of Health Insurance Denials Get Reversed, Analysis Finds. Read that carefully: this isn’t half of all denials — it’s half of denials that were actually appealed. The much larger, mostly invisible number is how many people simply don’t appeal at all, effectively leaving a coin-flip’s worth of legitimate claims on the table.
Why so many initial denials get overturned
There are several structural reasons an insurer’s first decision often doesn’t hold up on appeal. Initial denials are sometimes generated through automated or algorithmic review processes rather than individualized clinical judgment — a dynamic currently at the center of active litigation, including a closely watched case in which a federal court recently ordered broad discovery into an insurer’s use of AI to deny Medicare Advantage claims. An appeal, by contrast, generally requires a more substantive review — sometimes by a different reviewer or an independent physician — which alone can be enough to flip an outcome that wasn’t well-supported in the first place.
The two levels of appeal you’re entitled to
Most people don’t realize they typically have at least two distinct appeal rights when a health insurance claim is denied:
Internal appeal. This is a request that the insurance company itself reconsider its decision, usually reviewed by someone who wasn’t involved in the original denial. Insurers are generally required to have a formal internal appeals process and to explain, in writing, exactly why a claim was denied — information you’re entitled to request if it wasn’t clearly provided.
External review. If the internal appeal doesn’t resolve things in your favor, most plans are required to offer an external review conducted by an independent third party not affiliated with the insurer — and that reviewer’s decision is typically binding on the insurance company. This is often the stage where denials tied to “medical necessity” determinations get the most rigorous, genuinely independent scrutiny.
Practical steps for filing an effective appeal
- Get the denial reason in writing, in detail. A vague denial letter should prompt a follow-up request for the specific clinical or policy basis for the decision — you can’t effectively rebut a reason you don’t fully understand.
- Ask your treating physician for a letter of medical necessity. A denial based on “not medically necessary” is often most effectively challenged with a detailed clinical explanation from the provider who actually treated you, not just a form letter.
- Track every deadline precisely. Internal appeal windows are often time-limited (commonly 180 days from the denial, though this varies by plan), and missing a deadline can permanently forfeit your appeal rights.
- Request your full claim file. You’re generally entitled to the complete record the insurer used to make its decision — including any clinical criteria or, increasingly relevant, any algorithmic tools involved in the review.
- Escalate to external review if the internal appeal fails. Don’t treat an internal appeal denial as the final word — the external review stage is specifically designed as an independent check on the insurer’s own reasoning.
- Involve your state insurance department if you’re stuck. Every state has an insurance regulator that can provide guidance, and in some cases direct intervention, particularly for fully-insured plans (as opposed to self-funded employer plans, which are governed somewhat differently under federal ERISA law).
When it’s time to call an attorney
Most denials can be appealed without a lawyer, particularly at the internal appeal stage. But it’s worth consulting an attorney who handles insurance disputes if: the denial involves a large dollar amount, you’ve been denied at both the internal and external review stages and still believe the decision was wrong, the denial involves a life-threatening or urgent medical situation where delay itself causes harm, or you suspect the denial reflects a broader pattern rather than an individualized decision about your specific case.
The bottom line
A denial letter can feel like the end of the conversation, but the data says it frequently isn’t — roughly half the time, appealing changes the outcome. If you or someone you know has received a health insurance denial, the appeal process exists specifically because insurers’ first decisions are wrong often enough to justify it.
This is general information, not legal or medical advice — appeal rights and deadlines vary by plan and state, so confirm the specific rules that apply to your policy before filing.
