What to Do When Insurance Denies a Claim

An insurance claim denial can feel overwhelming, especially when you need care or face unexpected costs. Many denials are reversible with the right steps and documentation. Insurers are required to provide clear reasons and appeal rights, which gives you a real path forward.

This guide explains exactly what to do when your health insurance denies a claim, from understanding the denial to successful resolution.

Step 1: Read the denial letter and Explanation of Benefits thoroughly

Do not ignore the denial. Review both the denial letter and your EOB from the insurer. The denial letter explains the specific reason and cites plan rules or guidelines. The EOB shows how the claim was processed, including the billed amount, allowed amount, what the plan paid, and your responsibility.

Common denial reasons include a service deemed not medically necessary, a lack of prior authorization, an experimental or investigational treatment determination, an out-of-network provider without applicable coverage, and missing or incomplete information, such as denial code CO-16.

Note all deadlines. Internal appeals usually must be filed within 180 days, or sooner for urgent care.

Step 2: Identify the exact denial code and gather evidence

Denial codes, CARC or RARC codes, appear on the EOB. Look up the specific code for more detail. For example, CO-50 often means not medically necessary, while PR-1 relates to deductible issues.

Collect supporting materials: medical records and notes from your provider showing why the service was needed, a letter from your doctor explaining medical necessity, previous approvals for similar treatments, and any relevant clinical guidelines or studies. Request your full claim file from the insurer if needed, since you have the right to this information.

Step 3: File an internal appeal

Submit a written appeal following the insurer's instructions, often through their portal or by mail. Include your policy and claim numbers, a clear statement that you are appealing the denial, your doctor's letter and all supporting documents, and an explanation of why the service meets your plan's criteria.

For urgent situations, request an expedited appeal, typically decided within 72 hours. Standard appeals are usually resolved within 30 days. Many claims are approved at this stage once additional evidence addresses the insurer's original concerns.

Step 4: Escalate if the internal appeal is denied

The second denial letter will outline your next options, such as a second-level internal appeal or external independent review, available under the Affordable Care Act for many plans. External reviews involve an independent third party and can be particularly effective since the reviewer has no stake in the original decision.

Continue documenting every step. Some states offer additional consumer assistance or ombudsman programs worth contacting in parallel.

Step 5: Explore alternatives while appealing

Ask about payment plans, manufacturer assistance programs, or charity care from the provider while your appeal is pending. In certain cases, No Surprises Act protections may apply if the denial involves balance billing.

Step 6: Monitor credit and follow up

Medical debt generally cannot appear on credit reports until at least 365 days after the original due date under voluntary credit bureau policies. Paid medical collections are removed once reported as paid, and debts under $500 typically do not report at all. Keep records of your appeal to support any future disputes.

Ready to take action?

Denial Letter Translator can help you analyze your situation and generate ready-to-send letters in minutes.

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Bill Advantage is a document literacy tool. Nothing in this article constitutes legal or medical advice.