The three families of denial reason

Plans give hundreds of reasons, but nearly all of them sit in three families. The family tells you who has to act, what evidence helps, and how likely it is that an independent reviewer outside the plan can look at the case.

What this means

Paperwork. Something was missing, wrong or late. Examples are a coding or billing error, a duplicate claim, more information needed, a claim filed too late, or another insurer being primary. The fix is usually a corrected claim or a missing document, and it is usually your provider’s job or a call to your plan. External review rarely applies.

Coverage. The question is what your plan includes. Examples are a service that is not a covered benefit, a visit limit reached, an out-of-network provider, a waiting period, or a drug not on the formulary. The evidence is your plan document. Whether an independent reviewer can take it depends on whether the denial turns on medical judgment. The federal rule’s own examples treat as reviewable a visit-limit denial where more visits depend on medical necessity, and an out-of-network denial where the plan covers out-of-network care if the service cannot effectively be provided in network.

Clinical. The plan says the care is not needed, not proven, or not at the right level. Examples are not medically necessary, experimental or investigational, step therapy required and level of care. The evidence is your medical records, your doctor’s letter and the plan’s own criteria. Denials involving medical judgment, including medical necessity, level of care, effectiveness and experimental status, qualify for external review under the federal process. Denials based on a finding that you do not meet the plan’s eligibility requirements do not.

What to do

1. Copy the reason from the letter, word for word. Do not paraphrase it.
2. Pick the family. If the wording is vague, such as “not covered”, find the plan provision cited. Triage Cancer notes that a “not covered” reason can really be a medical necessity dispute.
3. Open the matching reason page from the lists above for the arguments and evidence that go with it.
4. Run the denial reason finder if you are unsure, then build your evidence list with the evidence checklist builder.
5. Decide who acts first. Paperwork: usually the provider. Coverage: you, with the plan document. Clinical: you and your doctor. See whose job is it to fix this.
6. Check for more than one reason. A letter can give several; answer each.

What the plan may say, and what to say back

“Not covered under your plan.” Ask: “Which provision of my plan says that? Is this a benefit exclusion, or a decision about whether the service is medically necessary?”

“Does not meet our criteria.” Ask for the criteria in writing. A private group plan must either set them out in the notice or say they were relied on and that a free copy is available on request.

“Missing information.” Ask exactly what is missing and who has to supply it, and the date by which it is needed.

The rule

External review under the federal process covers denials involving medical judgment (such as medical necessity, appropriateness, health care setting, level of care, effectiveness, and experimental or investigational status), certain surprise-billing protections and rescissions. A denial based on a finding that you do not meet the plan’s eligibility requirements is not eligible. The external reviewer decides whether medical judgment is involved. Source: Code of Federal Regulations (CFR) Title 29, section 2590.715-2719(d)(1). Check the date on your notice, which controls.

Watch for

• Reasons can change. Before a final internal denial, a non-grandfathered plan or insurer must give you, free, any new evidence or new rationale it relied on, early enough for you to respond.
• Paperwork reasons are common. In 2024, among reasons reported by insurers selling HealthCare.gov Marketplace plans for denied in-network claims, KFF (formerly the Kaiser Family Foundation) lists “other” at 36%, administrative reasons at 25%, lack of prior authorization or referral at 9%, and lack of medical necessity at 5%. KFF reports these percentages “where reported”. We do not know how multiple reasons on one claim were counted, and the figures say nothing about employer plans.
• A paperwork fix can be the whole answer. Do not write a long appeal for something a corrected claim would solve.
• Not every family appeals the same way. See which denials reach external review.

What next

• Read the letter closely first: how to read a denial letter.
• Decide who acts: whose job is it to fix this.
• Use the plan’s own language: use the plan’s own words.
• Go to the topic page, find the real reason.