What is Appeal (Insurance)?
Definition
An appeal is the formal process to challenge a denied insurance claim or coverage decision. Federal law grants a right to at least one internal appeal reviewed by the insurer and, upon a second denial, an external review by an independent third party.
Real-World Example
After a $27,000 hospital claim is denied for lack of medical necessity, the patient files an internal appeal citing peer-reviewed guidelines. When the insurer upholds the denial, the patient escalates to state-level external review, which overturns 41% of such cases.
Why It Matters
Fewer than 1 in 500 denied claims are appealed nationwide, yet more than half of appeals filed are ultimately paid. Understanding deadlines — typically 180 days from denial — is the difference between recovery and permanent loss.
Frequently Asked Questions
How long do I have to file an appeal?
Under the ACA, you have at least 180 days from the date on the denial letter to file an internal appeal.