Why Denials Happen More Often Than You'd Expect

Receiving a denial notice from your health insurer can feel alarming, but it is far from unusual. Insurers routinely deny a portion of claims — sometimes for technical reasons that are entirely fixable. Understanding why denials occur is the first step toward resolving them.

Common denial reasons include services that fall outside covered benefits, care delivered by out-of-network providers, missing prior authorization, billing codes that don't align with the diagnosis, or a determination that the treatment was not medically necessary (meaning the insurer did not find it meets the clinical threshold required by your policy). Each reason has a different resolution path.

Many readers hold mistaken assumptions about how their coverage works. For a broader look at those gaps, see common health insurance myths that regularly catch people off guard.

1

Filing a claim without verifying that the provider is in-network.

Why it happens: Patients often assume that a hospital or specialist accepted by their plan means all providers within that facility are also in-network, which is frequently not the case.

How to avoid: Before any non-emergency care, call your insurer's member services line or use their online directory to confirm each specific provider's network status. Ask the facility to flag any potential out-of-network practitioners, such as anesthesiologists or radiologists.
2

Skipping required prior authorization before a procedure or specialist visit.

Why it happens: Patients are not always informed at the point of scheduling that their plan requires pre-approval, and providers do not always catch it either.

How to avoid: Contact your insurer before any planned procedure, imaging, or specialist referral to ask whether prior authorization is needed. Get the authorization number in writing and keep a copy. Do not assume approval from your physician equates to insurer approval.
3

Missing the deadline to file the appeal after receiving a denial.

Why it happens: Denial notices contain appeal deadlines that are easy to overlook, especially when managing a stressful health situation.

How to avoid: Read the denial letter immediately upon receipt and note the appeal deadline — typically 180 days for internal appeals under ACA-compliant plans, though it can vary. Mark the date on your calendar and begin gathering documentation right away.
4

Submitting an appeal without supporting medical documentation.

Why it happens: Many people write a letter explaining their frustration without realizing the insurer needs clinical evidence — not just a personal account — to reverse a medical-necessity denial.

How to avoid: Ask your treating physician for a detailed letter of medical necessity, and request copies of relevant clinical guidelines or studies that support the recommended treatment. Attach these to your appeal along with the relevant sections of your policy.
5

Accepting the first denial without pursuing the full appeals process.

Why it happens: Denial notices can feel authoritative and final, discouraging further action, especially when readers are unfamiliar with their rights.

How to avoid: Recognize that an initial denial is not the end of the road. Most plans have two rounds of internal appeal, and if those fail, an independent external review is available. Each stage is an additional opportunity to present evidence and have the decision reconsidered.

Your Rights and the Appeal Process

Under federal law, health insurers are required to provide a written denial notice that explains the specific reason for the denial and the steps you can take to appeal. Most plans offer at least two levels of internal appeal before you can request an independent external review.

~17%

ACA marketplace claims denied on average

A KFF analysis of 2021 data found that marketplace insurers denied roughly 17% of in-network claims on average, with significant variation across plans.

~0.1%

Enrollees who actually appeal denials

The same KFF analysis found that fewer than two-tenths of one percent of denied in-network claims were appealed by enrollees, suggesting most denials go unchallenged.

Start by requesting the Explanation of Benefits (EOB) — the document your insurer sends that breaks down what was billed, what was paid, and what was denied. Cross-reference it with the Summary of Benefits and Coverage that came with your plan. If you believe the denial is incorrect, submit a formal internal appeal in writing, including supporting documentation such as the physician's letter of medical necessity, relevant medical records, and any peer-reviewed clinical guidelines that back the recommended treatment.

If the internal appeal fails, you have the right to request an independent external review from a third-party organization not affiliated with your insurer. External reviewers overturn insurer decisions at a meaningful rate, making this step worth pursuing.

Watch Your Appeal Deadlines Closely

Each stage of the appeal process has strict deadlines set by your plan and, in some cases, state law. Missing a deadline — even by a day — can forfeit your right to appeal at that level. Always confirm deadlines from the denial notice itself, not from memory or third-party summaries, and send appeal documents via certified mail or a method that provides a delivery timestamp.

This article provides general educational information about health insurance claims and appeals. It is not legal or medical advice. Coverage terms, timelines, and appeal procedures vary by plan and state. Consult a licensed insurance professional or patient advocate for guidance specific to your situation.

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The content on this site is for informational purposes only and is not a substitute for professional advice. Always consult a qualified professional for guidance specific to your situation.