How to appeal an insurance claim denial: levels, deadlines and letters

The short answer: first decide whether the claim was wrong (send a corrected claim) or the payer's decision was wrong (appeal). Then find out who regulates the plan, because that sets the route and the clock. For most plans the order is: a peer-to-peer or reconsideration, a written first-level appeal within the window in the denial notice, a second level if the plan has one, then independent external review for medical necessity denials. In Texas, state-regulated plans must give at least 30 days to file a utilization review appeal and decide it within 30 calendar days; employer plans covered by ERISA must allow at least 180 days. Send a short letter that answers the exact denial reason, with the evidence attached, and log the deadline the day the denial arrives.

First: is this an appeal at all?

What happened	What it needs	Why
Rejected (clearinghouse or 277CA), never processed	Fix the data and send a new original claim	There is no decision to appeal. See rejected vs denied.
Denied for your own error: wrong code, modifier, member ID, missing auth number	A corrected claim (frequency code 7, with the payer's original claim number)	Faster than an appeal, and an appeal of a claim that really was wrong will fail.
Denied, claim correct: payer says no auth, not covered, not medically necessary, filed late, duplicate	An appeal (some payers call the first step a reconsideration or dispute)	You're asking the payer to change its decision.
Paid, but at the wrong rate	A payment dispute under your contract, with the fee schedule	An underpayment is a contract question, not a coverage question.
Paid late by a state-regulated Texas plan	Check the prompt-pay penalty; complain to TDI if it isn't paid	See the Texas prompt pay law.

Who regulates the plan decides the route

Before you write anything, find out what kind of plan it is. The Texas Department of Insurance says a card without "TDI" or "DOI" on it is usually a self-funded plan, which TDI doesn't regulate.

Plan	The appeal route
Fully insured Texas HMO, PPO or EPO (TDI or DOI on the card)	The plan's appeal process, Texas utilization review rules for medical necessity, then an independent review organization (IRO) through TDI. Claims-handling complaints go to TDI.
Self-funded employer plan	The plan's process under the federal ERISA claims rule; external review under federal rules for most non-grandfathered plans; complaints to the U.S. Department of Labor.
Original Medicare	Five federal levels, starting with a redetermination by the Medicare Administrative Contractor.
Medicare Advantage	The plan's reconsideration process under Medicare Advantage rules; the plan's provider manual has the steps for contracted and non-contracted providers.
Texas Medicaid	Fee-for-service claims: appeal to TMHP. Managed care: the MCO's provider appeal process, as written in its provider manual.
TRICARE or VA Community Care	The regional contractor's reconsideration process (TriWest for TRICARE West and for VA Community Care in its regions).

Behavioral health is often managed by a different company than the one on the card. Appeal to the company that made the decision, at the address in its denial letter. Behavioral health carve-outs explains how to tell.

The levels, in order

1. Peer-to-peer. For a medical necessity decision, the treating clinician talks with the plan's reviewer. Texas requires a utilization review agent to offer the provider a chance to discuss the treatment before it issues an adverse determination (Insurance Code ch. 4201, §4201.206). Ask for it the same day you hear a denial is likely, and have the ASAM dimensions and the last week's notes in front of you.
2. Reconsideration or first-level appeal. A written request to the payer, within the window printed on the denial or in the provider manual. This is where most appeals are won or lost, because it's where you send the evidence.
3. Second-level appeal, if the plan has one, reviewed by someone not involved in the first decision.
4. Independent external review for medical necessity (and, under federal rules, some other) denials, after the plan's internal appeals or sooner in urgent cases. Decided by a reviewer outside the plan.
5. Regulator complaint when the plan doesn't follow its own process or the law: TDI for state-regulated plans, the Department of Labor's Employee Benefits Security Administration for ERISA plans.

For authorization denials on IOP and PHP, the fastest path is often a new, better-documented continued-stay review rather than an appeal. Our prior authorization guide covers what reviewers want to see at each review.

Texas: UR appeals and independent review

For medical necessity denials by plans TDI regulates, the Texas Insurance Code and TDI's rules set the floor:

Rule	What it says	Source
Time to file	The plan's procedure must give at least 30 calendar days after the written adverse determination to file an appeal.	28 TAC §19.1711
Standard decision	Written decision as soon as practicable, and no later than the 30th calendar day after the utilization review agent receives the appeal.	Insurance Code §4201.359
Expedited appeal	For emergency care, a continued hospital stay and other situations listed in the rule: decided as fast as the medical situation requires, and within one working day after all the information needed arrives.	Insurance Code §4201.357; 28 TAC §19.1711
What a denied appeal must say	The clinical basis, the specialty of the reviewer who denied it, and the right to an independent review with how to get one.	Insurance Code §4201.359(b)
Independent review (IRO)	For denials that care isn't medically necessary or is experimental. The plan provides TDI's form LHL009 with the denial; the patient, their provider or a representative sends it to the plan or its UR agent (not to TDI), and TDI assigns an IRO. A patient with a life-threatening condition can go to an IRO without the internal appeal first.	TDI, IRO questions; Form LHL009

These protections apply to plans TDI regulates. Ask TDI or the plan for the current IRO timelines before you promise a client a date.

Employer plans: member rights and the provider as representative

Under ERISA, the right to appeal belongs to the plan member. A provider appeals either under the contract's provider dispute process or as the member's authorized representative, which the plan may require in writing on its own form (29 CFR §2560.503-1). Get that form signed at intake for clients on self-funded plans, so an appeal doesn't wait for a signature.

• Time to appeal: a group health plan must allow at least 180 days after the notice of an adverse benefit determination.
• Decision times (one level of appeal): 72 hours for urgent care, 30 days before the service (pre-service), 60 days after it (post-service).
• External review: for non-grandfathered plans, the federal rules (45 CFR §147.136) give the member four months after the final internal denial to request it.

Medicare and Texas Medicaid

Original Medicare: five levels

1. Redetermination by the Medicare Administrative Contractor: request within 120 days of receiving the initial determination (42 CFR §405.942).
2. Reconsideration by a Qualified Independent Contractor: within 180 days of receiving the redetermination (42 CFR §405.962).
3. A hearing with the Office of Medicare Hearings and Appeals, then the Medicare Appeals Council, then federal court, each with a minimum amount in controversy that changes every year.

A claim Medicare returns as unprocessable (remark code MA130) has no appeal rights: correct it and send it again.

Texas Medicaid

For fee-for-service claims, 1 TAC §354.1003 requires appeals to arrive within 120 days of the last denial or adjustment, and every claim to be final within 24 months of the date of service. Medicaid managed care plans (STAR, STAR+PLUS, STAR Kids, CHIP) run their own provider appeal processes with their own deadlines; use the one in your MCO's provider manual. Enrollment is covered in our Texas Medicaid credentialing guide.

What wins: the appeal packet

Reviewers read quickly. Answer the denial reason in the first paragraph and make every attachment prove one point.

• The payer's own form, if it has one, and the denial letter or 835 line with the claim number and reason code.
• A one-page letter (templates below) that states what you want: reprocess and pay claim number X for dates Y.
• For medical necessity: the assessment, the current treatment plan, the notes for the dates in question showing the hours delivered, the ASAM dimension ratings and why the level of care is still needed, any standardized scores repeated over time (PHQ-9, GAD-7), and the plan's own criteria quoted next to the evidence that meets each one.
• For authorization denials: the auth number, approved dates and units, and the call log entry (date, rep, reference number) if the auth was given by phone.
• For timely filing: the clearinghouse acceptance report and the payer's acknowledgment showing the date received, or the other payer's denial if you first billed the wrong plan.
• Only what's needed. For substance use treatment records covered by 42 CFR Part 2, confirm the client's consent covers disclosure to the payer, and send only the records the appeal requires.

Notes that hold up on appeal are written that way on the day of service. Our program uses Cima's continued-stay reviews and group notes so the ASAM picture and the hours are in the chart before anyone asks.

Four letters to adapt

Keep them short, factual and polite. Replace the highlighted parts; never put more client information in a letter than the claim already carries.

1. Medical necessity (level of care)

2. Authorization was on file

3. The claim was filed on time

4. Coding, bundling or rate

Track every appeal

An appeal nobody follows up on is a write-off with extra steps. Keep one line per appeal with: the claim, payer and dates of service; the denial date and reason code; the appeal deadline; the date sent and how (portal, fax, mail with tracking); the payer's reference number; the date the decision is due; the result; and the next step if it's still no. Check it weekly. In Cima EHR, every claim keeps a history that can't be edited or deleted, with each send, acknowledgment, payment and denial dated, so the proof for a timely-filing appeal is already there.

Need someone to work a stack of denials with your team? See Cima Consulting's services by the item, or start with what each denial code means.

Questions

How long does a provider have to appeal an insurance denial?

It depends on the plan. Texas state-regulated plans must allow at least 30 days to appeal a utilization review denial; employer group health plans under ERISA must allow at least 180 days; Medicare allows 120 days for a redetermination; Texas Medicaid fee-for-service allows 120 days from the last denial. Contracts and provider manuals often set their own windows for payment disputes. The deadline that binds you is the one in the denial notice or your contract, so log it the day the denial arrives.

Can a provider appeal on behalf of a patient?

Yes, in two ways: through the provider dispute process in your network contract, or as the member's authorized representative. ERISA plans can require a signed designation on their own form, so have clients on employer plans sign it at intake.

What should an insurance appeal letter include?

The member ID, claim number and dates of service; the denial date and reason; what you want (reprocess and pay); and a short point-by-point answer to the reason with the evidence attached: the plan's criteria next to the record that meets them for medical necessity, the authorization for auth denials, or the acceptance report for timely filing.

What is an IRO in Texas?

An independent review organization: a reviewer outside the plan that TDI assigns to decide whether denied care was medically necessary or appropriate, for plans TDI regulates. The request goes on TDI's form LHL009 to the plan or its utilization review agent, which sends it to TDI. A patient with a life-threatening condition can request it without completing the internal appeal.

Is a peer-to-peer review the same as an appeal?

No. A peer-to-peer is a conversation between the treating clinician and the plan's reviewer, usually before or right after an adverse determination. It can reverse a decision quickly, but if it doesn't, you still need to file the written appeal within the deadline.

What if the appeal is denied too?

Go to the next level the denial letter names: a second-level appeal, then external review for medical necessity denials. If the plan didn't follow its own process, complain to TDI (state-regulated plans) or the Department of Labor (ERISA plans). For a client who still needs care, ask about a single case agreement or a lower level of care the plan will approve.

Sources

• Texas Insurance Code chapter 4201 (utilization review: §§4201.206, 4201.357, 4201.359) and chapter 4202 (independent review organizations)
• 28 TAC §19.1711, Texas utilization review appeals
• Texas Department of Insurance, Independent review organization questions, Form LHL009 and Self-funded plans
• 29 CFR §2560.503-1 (ERISA claims procedure) and 45 CFR §147.136 (internal appeals and external review)
• 42 CFR §405.942 and §405.962 (Medicare redetermination and reconsideration)
• 1 TAC §354.1003, Texas Medicaid time limits for claims and appeals
• 42 CFR Part 2, confidentiality of substance use disorder records