Less Than 1% Of Denied Insurance Claims Get Appealed — But Most Appeals Win. Here's The Data | ICA

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The Numbers: How Often Denied Insurance Claims Get Appealed — And How Often They Win

 

Here's the gap that drives everything in this piece: denials are common, appeals are rare, and appeals work more often than most people assume. In its 2024 analysis of federal transparency data, KFF found that insurers on HealthCare.gov denied 19% of in-network claims and 37% of out-of-network claims, a combined 20% of all claims submitted. A January 2026 KFF poll found two-thirds of insured adults now call denials and delays a major problem, and a third say it's happened to them personally in the past two years.

 

Now the appeal side. Of the roughly 85 million in-network claims denied on HealthCare.gov in 2024, fewer than 1% were appealed. Ninety-nine times out of 100, the denial just stands.

 

That's where the story usually stops in most coverage of this topic. It shouldn't, because the outcomes look completely different depending on which stage of appeal you're looking at, and the differences matter for deciding whether to bother.

 

Appeal Stage Overturn Rates

Appeal Stage	Share Overturned	Source
Internal appeal (insurer reviews its own decision)	~34%	KFF, ACA Marketplace 2024 data
External appeal (independent third-party review, NY)	46.7% overall, rising to 52.5% in 2025	JAMA Internal Medicine, April 2026
Medicare Advantage prior-authorization appeal	80.7%	KFF analysis of CMS data
Medicare Advantage skilled nursing facility appeal	95% (98.2% for CVS specifically)	HHS OIG, June 2026

 

The JAMA Internal Medicine research letter examined 51,394 closed external-appeal cases in New York State between 2019 and 2025. The overturn rate climbed steadily across that period — from 38.0% in 2019 to 52.5% in 2025 — and appeal volume more than doubled alongside it, a trend the study's authors say suggests insurers' coverage-review systems might not be working as intended. 

On the Medicare Advantage side, the June 2026 HHS Office of Inspector General data brief OEI-09-24-00331 found that the 19 largest Medicare Advantage organizations denied 12% of skilled nursing facility admission requests in June 2024 — roughly 13,500 of 109,400 — and that enrollees appealed just 18% of those denials. Of the appeals that were filed, plans reversed 95%. 

The company-level table in Appendix B is where the picture gets sharper still: CVS Health Corporation overturned 98.2% of its appealed SNF denials, UnitedHealth Group overturned 99.7%, and Elevance Health overturned 100%. OIG's own reading is blunt — the extremely high overturn rate "indicates that some enrollees were initially denied medically necessary care."

 

Why this matters to you:  your odds improve at almost every stage you're willing to escalate to — roughly one in three at internal review, about one in two at independent external review, and four in five in Medicare Advantage. 

The one appeal that almost never wins is the one you don't file. One honest caveat worth naming up front: the JAMA figures are specific to New York State's external-review system, and KFF's numbers cover HealthCare.gov insurers only, not every state-based marketplace or employer plan — so treat these as strong directional evidence, not a guarantee for your exact policy.

 

Why So Few People Appeal A Denied Claim

 

If appeals work this well, the under-1% appeal rate needs an explanation. A few overlapping causes show up again and again in the research, and laziness isn't one of them.

 

Most people don't know the right exists. The KFF Survey of Consumer Experiences with Health Insurance found that among consumers whose claims had been denied, 69% didn't know they could appeal, and 86% didn't know what government agency to call for help. Only 15% of people with a denied claim went on to file a formal appeal at all.

 

Denial letters bury the instructions. ProPublica documented a case in which a North Carolina couple's external-review instructions sat on page seven of a Highmark denial letter — sent after the husband had attempted suicide twice in 11 days while the family fought for psychiatric coverage. Once they found and used the instructions, an independent reviewer overturned the denial and Highmark covered more than $70,000 in treatment. As Kaye Pestaina of KFF put it to ProPublica: "Appeal, appeal, appeal, appeal. That's all you have." Highmark, for its part, said "small errors made by physicians and/or members can lead to delays and initial denials" that get corrected on appeal — a fair point about some cases, though it doesn't explain why the fix was buried seven pages in.

 

People assume it won't work. The Common wealth Fund's 2025 Affordability Survey, released in June 2026, found that only about half of people who experience a coverage denial ever appeal, and the two most common reasons for not appealing were uncertainty about their right to do so and doubt it would change anything. The data says that doubt is largely misplaced: among those who did appeal a prior-authorization denial, more than half ultimately got some form of coverage — either the original care (30%) or an approved alternative (25%) — and a third of people who challenged a claim denial had their bill reduced or eliminated.

 

Is it normal to feel like appealing is pointless? It's an understandable read of the situation, but not one the data supports. As Commonwealth Fund researcher Sara Collins told AJMC, "Clearly, prior authorization is hitting both high-value and low-value care" — meaning plenty of legitimate, medically necessary care gets denied first and approved later, not just edge cases.

  

Overturn Rates By Claim Type And Diagnosis

 

The most useful thing about the JAMA study is that it breaks results down by service and diagnosis instead of reporting one flat number. The spread runs wide, which means the value of appealing is real across the board but far from uniform.

 

Overturn Rate by Service Category (NY External Appeals)

Service Category	Share Overturned
Home health care services	78.4%
Surgical services	50%+
Dental / orthodontic procedures	50%+
Pharmacy / prescription drugs	50%+
All categories combined	46.7%

Overturn Rate by Diagnosis Category

Diagnosis Category	Overturn Rate
Substance use disorder treatment	61.5%
Mental health services	60.6%

That variation comes down to a mix of factors researchers point to: outdated clinical criteria baked into a plan's initial review, ambiguous coverage language that different reviewers read differently, and — as one HHS OIG report bluntly put it about skilled nursing facility denials — "...some enrollees were initially denied medically necessary care." 

Home health and substance-use treatment sit at the high end partly because those services get flagged by automated review rules that don't always hold up once a clinician actually reads the file.

Part of what trips those automated flags has nothing to do with the individual file. Insurers are increasingly using AI to review and deny claims, and federal courts are only now beginning to force those systems open to scrutiny — which means a denial letter may reflect an algorithm's output rather than a clinician's judgment, and your appeal may be the first moment a human being actually reads the record.

 

Why this matters to you: if your denial falls into one of the higher-overturn categories, that's a meaningful signal the initial decision may not survive a second look — not a guarantee, but a reason to take the appeal seriously rather than assume it's a long shot. 

 

Common Reasons Claims Get Denied In The First Place

 

Here's a finding that reframes the whole picture: most denials aren't actually about whether your care was medically necessary. KFF's most recent breakdown of 2024 in-network denial reasons found administrative reasons accounted for 25% of denials, lack of prior authorization or referral for 9%, and lack of medical necessity for just 5% — with the remaining 36% falling into an unspecified "other" category insurers aren't required to detail further.

 

Denial Reason (2024 In-Network Claims)	Share of Denials
Other / unspecified	36%
Administrative reasons	25%
Lack of prior authorization or referral	9%
Lack of medical necessity	5%

 

Administrative denials cover things like a misspelled name, a mismatched member ID, a duplicate submission, or a claim filed past a deadline — clerical problems, not clinical disagreements. 

That distinction matters because a clerical denial is often the easiest kind to overturn: correct the error, resubmit or appeal, and the underlying medical decision was never really in dispute. 

The trade group AHIP has said publicly that the vast majority of denials trace back to incorrect or incomplete claim submissions from providers rather than disputes over what's covered, and the KFF data broadly supports that framing.

 

How To File An Effective Appeal

 

Filing an appeal moves your case from an initial, often automated review to one that has to involve an actual clinician who wasn't part of the first decision. The process runs in stages.

 

• 1. Internal appeal. You ask the insurer to reconsider. By law, the reviewer has to be a medical professional who wasn't involved in the original denial. See HealthCare.gov's internal appeals overview for the standard federal timeline.
• 2. External review. If the internal appeal is denied again, you can request review by an independent organization outside the insurer entirely — the stage with the highest overturn rates in this article. The governing federal regulation, 45 CFR § 147.136, defines an independent review organization as "an entity that conducts independent external reviews of adverse benefit determinations," requires that the insurer — not you — pay the IRO's cost, and caps any state filing fee at a nominal $25 that must be refunded if the denial is reversed and waived entirely where it would cause undue hardship. The same rule contains a provision worth knowing about: under the "deemed exhaustion" standard at § 147.136(b)(2)(ii)(F), an insurer that fails to strictly follow the internal appeals requirements can be treated as having exhausted the process, letting you go straight to external review. HealthCare.gov's external review page and CMS's appeal rights fact sheet both walk through eligibility in plainer language.
• 3. Deadlines matter more than almost anything else here. New York, for example, requires an external appeal application within four months of the final internal denial, per the state's Department of Financial Services — miss that window and the right can simply lapse, regardless of how strong the underlying case is. Your own deadline will be printed on the denial letter itself; find it before you do anything else. 
• 4. Documentation. Keep the denial letter, your policy's coverage language, any supporting notes from your treating physician, and a dated log of every call and its outcome. Quality matters as much as volume here: the medical evidence that actually carries weight tends to be contemporaneous treatment records and a treating clinician's written rationale rather than a summary assembled after the denial, and a thin appeal file is one of the easiest ways to lose a case that should have won.

The rights that attach the moment a denial letter arrives are more specific than the letter itself usually lets on — insurers generally must identify the precise provision they relied on and explain the decision in writing, which hands you a concrete target to argue against instead of a vague "not covered." Reading the denial against your own policy language is often the fastest way to find the mistake.

 

One eligibility gap worth knowing: if your coverage comes through a self-funded employer plan governed by ERISA, your external-review rights can look different from what an ACA marketplace enrollee gets — the Department of Labor's plan-participant guide is a reasonable starting point for understanding which set of rules applies to you, and your plan's summary plan description will say explicitly.

 

Free help exists before you need to pay for it. State Consumer Assistance Programs, funded in part under the ACA specifically to help people file appeals, and your state's insurance department consumer line are both no-cost options — check for one in your state before assuming an advocate or attorney is the only path forward. 

Escalation doesn't necessarily stop at the insurer's own ladder either. Several states layer a regulatory step on top of it, and filing a Civil Remedy Notice with the state puts an insurer on a statutory clock in front of a regulator rather than an internal reviewer — a different kind of pressure than another appeal letter, and one that only applies to state-regulated policies rather than self-funded ERISA plans.

What Courts Have Said About Insurers Reviewing Their Own Denials

 

The internal-appeal stage has an obvious structural problem: the entity paying the claim is the entity deciding the claim. The Supreme Court addressed that directly in Metropolitan Life Insurance Co. v. Glenn, 554 U.S.105 (2008) (No. 06-923, on certiorari to the U.S. Court of Appeals for the Sixth Circuit; argued April 23, 2008; decided June 19, 2008; Sixth Circuit judgment at 461 F.3d 660 affirmed). 

Wanda Glenn, a Sears employee, was granted 24 months of long-term disability benefits; MetLife encouraged her to apply for Social Security disability, then denied her extended plan benefits on the ground that she could perform sedentary work. 

Reviewing her claim under ERISA's civil enforcement provision, 29 U.S.C. § 1132(a)(1)(B), Justice Breyer's majority opinion held that "a plan administrator's dual role of both evaluating and paying benefits claims creates" a conflict of interest that courts must weigh. 

Congress, the Court noted, imposed "higher-than-marketplace quality standards on insurers" and insisted that administrators provide "a 'full and fair review' of claim denials" under 29 U.S.C. § 1104(a)(1).

 

The right to an outside reviewer has its own foundational case. In Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (2002) (No. 00-1021, on certiorari to the Seventh Circuit; argued January 16, 2002; decided June 20, 2002; 230 F.3d 959 affirmed, 5-4, Souter, J.), Debra Moran's HMO refused surgery by an unaffiliated specialist as not "medically necessary.

"She invoked § 4-10 of the Illinois HMO Act, 215 Ill. Comp. Stat. ch. 125, which guarantees independent physician review; the independent reviewer found the surgery necessary and Rush denied the claim anyway. Rush argued ERISA preempted the state statute under 29 U.S.C. § 1144(a). 

The Court disagreed, holding the Illinois law was saved from preemption as a law regulating insurance under § 1144(b)(2)(A), and describing independent review as something that "does not resemble either contract interpretation or evidentiary litigation before a neutral arbiter as much as it looks like the practice of obtaining a second opinion." That holding is a large part of why state external-review systems — including the New York process behind the JAMA figures above — exist at all.

 

Mental health and substance use denials, the two highest-overturn diagnosis categories in the table above, have generated the most contested litigation of all. 

In Wit v. United Behavioral Health, Nos. 20-17363 and 21-15193 (9th Cir. Jan. 26, 2023) (D.C. Nos. 3:14-cv-02346-JCS and 3:14-cv-05337-JCS, N.D. Cal., Magistrate Judge Joseph C. Spero presiding; argued August 11, 2021; opinion by District Judge Michael M. Anello, sitting by designation; affirmed in part, reversed in part, and remanded), classes of ERISA beneficiaries alleged that UBH wrote internal Level of Care Guidelines more restrictive than generally accepted standards of care. 

The district court found for the plaintiffs after a ten-day bench trial; the Ninth Circuit panel agreed plaintiffs had standing and that the district court "did not clearly err in finding that UBH had a structural conflict of interest in serving a dual role as plan administrator and insurer," but reversed on the merits, holding the court had improperly substituted its own reading of the plans for UBH's. 

Notably, UBH never appealed the finding that its guidelines were inconsistent with state-mandated criteria, so that portion of the judgment stands. One caveat for your editor: the panel revisited this opinion later in 2023, so cite the January 26, 2023 version by date and confirm the operative text before publication.

 

Why this matters to you: none of these cases hands an individual claimant a win. What they establish is narrower and more useful — that the conflict you sense when an insurer reviews its own decision is one courts have formally recognized, that federal law entitles you to a genuinely outside reviewer paid for by the insurer, and that the clinical criteria behind a denial are themselves contestable rather than settled fact.

 

What Appealing Costs You — And What It's Worth

 

The Commonwealth Fund's 2025 survey put real numbers behind what a denial does to a household's finances. Among people who had a claim denied, 69% said it cost them or their household more money, 43% said the denial left them with medical debt they're still paying off, and more than half said the original disputed bill was $1,000 or more.

An excess judgment — the gap between what a policy will pay and what a court ultimately says is owed — is the liability-side version of the same arithmetic a denied patient runs when a four-figure bill lands back in their lap, and it makes the same point from the other direction: the shortfall a coverage decision leaves behind is usually the part that outlasts the dispute itself.

 

Set against that, a partial win is still a real win. A third of people who challenged a claim denial got their bill reduced or eliminated — not always the full amount, but often enough to matter for a household budget. Filing costs nothing but time in most states, which makes the appeal one of the few financial moves available after a denial that carries essentially no downside risk.

One caution on partial wins, though. A Florida policyholder who accepted an early payout found out the hard way what signing a settlement release too quickly can cost — the wording closed off considerably more than the single bill in front of them, and by the time that became clear there was nothing left to reopen.

 

This article focuses on health coverage, where the bulk of the current data sits, but the same basic logic — appeal rates are low, overturn rates are meaningfully higher — shows up in adjacent areas too: disability claims, VA benefit decisions, and property and auto disputes each have their own appeal ladders worth understanding if that's the coverage you're dealing with.

Courts have had to work out where an insurer's discretion actually ends — most visibly in Woodsv. Progressive American Insurance Co., where a policyholder won her underlying coverage claim outright and still lost the separate bad-faith case built on top of it, because the two were judged on different evidence and a different window of the insurer's conduct.

 

When To Get Professional Help With An Appeal

 

Not every appeal needs outside help, but some do — particularly high-dollar denials, anything involving an ongoing treatment plan, or a case where you've already lost an internal appeal and are heading into external review.

Editorial Disclaimer

 

This article summarizes appeal and overturn-rate statistics from sources including KFF, JAMA Internal Medicine, HHS OIG, and the Commonwealth Fund. It is for general informational purposes only, not legal or medical advice.

 

Most figures here come from specific datasets — HealthCare.gov marketplace plans, New York's external-review system, Medicare Advantage SNF denials — and don't necessarily reflect overturn rates for every state, employer plan, or ERISA-governed policy. Treat these as directional evidence, not a guarantee for your own coverage or diagnosis category.

 

Appeal deadlines, procedures, and eligibility (including ERISA vs. ACA marketplace rules) vary by plan and state, and may differ from what's described here by the time you read it. Confirm your specific deadline and process from your own denial letter and plan documents.

 

This article doesn't evaluate the merits of any individual claim. Whether an appeal will succeed depends on your specific denial reason, documentation, and policy language — for guidance on your own case, consult your plan's appeals process, a state Consumer Assistance Program, or a licensed attorney.

 

Situation	Free / Low-Cost Option	When Paid Help Makes More Sense
First-time internal appeal, clear clerical error	Free option State Consumer Assistance Program, insurer's own appeals line	Paid help Rarely needed
External review on a complex medical denial	Free option State insurance department consumer line, patient advocate at your hospital	Paid help When the medical record is extensive or contested
Repeated denials on ongoing treatment	Free option Case manager or discharge planner (if hospital-based)	Paid help Often worth an attorney or paid advocate
ERISA employer-plan denial	Free option Plan's summary plan description, DOL EBSA	Paid help Frequently, given ERISA's narrower remedies