Claim Denials and Appeals: Why Fighting Insurance Denials Matters
If you’ve ever submitted an insurance claim and received a denial, you’re not alone. And you’re almost certainly not the only one who didn’t know how often those denials could be overturned.
In a recent reel, Dr. Sam highlights some striking statistics about claim denials and the appeals process. Below, we break down what those figures really mean and why understanding them matters for your care.
What Is a Claim Denial?
When a health care provider submits a claim to an insurance company after providing medical services, the insurer is expected to pay based on your coverage.
A claim denial occurs when the insurer refuses to pay for the service — either fully or partially. Denials can happen for many reasons, including:
Missing or incomplete prior authorization
Coding or administrative errors
Disputes over “medical necessity”
Technical or procedural issues
When a claim is denied, providers and patients may go through an appeals process to challenge the decision.
How Often Are Denials Overturned?
One of the most surprising facts about insurance denials is how often they are reversed.
When denials are appealed, a significant percentage are ultimately overturned meaning the insurer changes its decision and agrees to pay. Despite this, very few denials are ever appealed.
This suggests that many initial denials may be incorrect, incomplete, or based on administrative hurdles rather than true medical judgment.
How Often Are Claims Appealed?
Although appeal success rates are high, only a very small percentage of denied claims are actually appealed.
Common reasons appeals don’t happen include:
Lack of time or staffing to manage the appeal process
Belief that appeals won’t succeed
Fear of delaying patient care
Patients not realizing they have the right to appeal
As a result, many denials are accepted without challenge even when payment may have been approved if an appeal were submitted.
The Financial Cost of Denials
Appealing denied claims comes at a steep cost.
Hospitals alone spend tens of billions of dollars each year attempting to overturn denials. This figure does not include:
Private medical practices
Administrative costs for insurers
Time taken away from patient care
Even more concerning, many claims that are eventually paid were denied initially creating unnecessary administrative burden and delays in care.
Why Insurance Companies Deny Claims
Insurance denials happen for a variety of reasons:
Prior Authorization Requirements
Some treatments require approval before care is provided. If approval is delayed or denied, claims may be rejected even when treatment is medically appropriate.
Medical Necessity Disputes
Insurers may apply their own definitions of medical necessity, which can conflict with a clinician’s judgment.
Administrative Barriers
Simple paperwork errors, coding discrepancies, or system issues can result in automatic denials knowing that many will never be appealed.
What This Means for Patients
Insurance denials don’t just affect providers. They directly impact patients by:
Delaying needed medical care
Increasing out-of-pocket costs
Creating stress and confusion
Discouraging people from seeking further treatment
In some cases, delays caused by denials and prior authorization requirements have been linked to worsening health outcomes.
What You Can Do If Your Claim Is Denied
While appeals can be frustrating, they can also be effective.
Know your rights.
Most insurance plans allow for internal and external appeals.
Keep documentation.
Medical records, physician notes, and written recommendations strengthen appeals.
Ask for help.
Providers, billing departments, and patient advocates can often assist.
Don’t assume “denied” means “final.”
Many denials are reversed when challenged.
Final Thoughts
The data surrounding insurance denials tells a troubling story:
Most denials are never appealed even though many would be overturned if they were.
This system shifts costs onto providers and patients, delays care, and wastes enormous resources. Understanding how denials work and being willing to challenge them is one of the most important steps patients and practices can take in advocating for appropriate medical care.
