Insurance Denials 101

Understanding why your insurance company denied a claim is the first step toward fighting back. Denials are not always final — and many are reversible with the right evidence and persistence.

1. Common Types of Insurance Denials

Administrative or Technical Denial

• Reason: Missing information, coding errors, or filing outside the allowed timeframe.

• Example: “Claim denied due to missing prior authorization.”

• Action: Correct the error, resubmit with supporting documentation, and include a brief cover letter explaining the correction.
  
  

Medical Necessity Denial

• Reason: The insurer claims the service or medication isn’t “reasonable and necessary” under their policy.

• Example: “Service denied: not medically necessary.”

• Action: Ask your provider for a Letter of Medical Necessity and attach clinical evidence (peer-reviewed studies, medical guidelines, etc.) that support your treatment.
  
  

Experimental or Investigational Denial

• • • Reason: The insurer says the treatment is “experimental,” “unproven,” or lacks sufficient evidence.

    • Action: Provide scientific literature and documentation showing the treatment’s recognized efficacy for your condition.
      
      

Non-Covered Service Denial

• Reason: The item or service is excluded from your plan benefits.

• Action: Verify whether it’s truly excluded or whether there’s an exception, waiver, or related code that is covered.
  
  

Duplicate or Coordination of Benefits Denial

• Reason: The insurer believes another payer (e.g., secondary insurance, workers’ comp) is responsible.

• Action: Send updated coordination-of-benefits information or an explanation of which policy is primary.
  
  

2. How to Read a Denial Letter

Denial letters can be confusing by design. Here’s what to look for:

Section What It Means What to Do

Header Information Patient name, claim number, service dates, and provider info. Confirm all details are correct. Errors can invalidate the denial.

Reason for Denial The insurer’s stated explanation (often vague). Highlight or copy this wording — you’ll need it for your appeal.

Cited Policy or Code Reference to plan language, CPT/HCPCS code, or medical policy. Look up the cited policy or ask the insurer to provide it.

Appeal Rights Section Lists your right to appeal, deadlines, and submission instructions. Mark the appeal deadline — usually 60 or 120 days from the denial date.

Contact Information Where to send your appeal. Keep a record of every fax, email, and call confirmation.

💡 Tip: Always request the full denial rationale and underlying medical policy if it’s not attached. Insurers must provide it upon request.

3. Sample Appeal Steps

Step 1: Gather Documentation

Collect all relevant records:

• Denial letter

• Explanation of Benefits (EOB)

• Provider notes and test results

• Letter of Medical Necessity

• Supporting medical research
  
  

Step 2: Identify the Denial Type

Use the list above to understand why you were denied — it shapes how you argue your appeal.

Step 3: Draft Your Appeal Letter

Include:

• Patient name, ID, and claim number

• Date of denial and reason stated

• Point-by-point rebuttal using evidence

• Supporting documents in chronological order
  
  

AKG Advocacy Tip: Use our Appeal Letter Template to stay organized and professional.

Step 4: Submit and Track

• Send your appeal certified mail or via portal with confirmation.

• Keep a log of dates, names, and reference numbers.

• Follow up every 7–10 days.
  
  

Step 5: Escalate if Needed

If the first appeal (often called reconsideration) is denied:

• File a Level 2 Appeal (internal or external review depending on plan type).

• For Medicare Advantage or Part D, follow CMS’s multi-level appeal structure, ending with the Administrative Law Judge (ALJ) hearing if necessary.

4. Quick Reference Checklist

✅ Identify the denial reason
✅ Request the insurer’s policy or criteria
✅ Get a provider’s supporting statement
✅ Submit a clear, evidence-based appeal
✅ Track and follow up until resolution