Prior Authorization & Appeals Guide
When your health insurance denies a claim, you have the right to understand why and fight back. This guide explains how prior authorization works, the most common denial reasons, and the step-by-step process to file a successful appeal.
Prior Auth Denials Are Common
Prior authorization requirements have expanded significantly, and denial rates have risen across both individual and employer-sponsored plans. Many denials are reversible with a properly filed appeal.
You Can Appeal
Under the ACA, every health plan must offer an internal appeals process and access to an independent external review. You have 180 days to file after receiving a denial.
Appeals Can Work
A significant percentage of properly documented appeals result in overturned denials. The key is acting quickly, including the right clinical evidence, and following the correct process.
1. What Is Prior Authorization?
Prior authorization (sometimes called "pre-certification" or "prior approval") is a requirement by your health insurance carrier that certain services, medications, procedures, or durable medical equipment be approved before they are provided. If you receive a service that required prior authorization without first obtaining it, the claim may be denied entirely—even if the service was medically necessary.
Common services that typically require prior authorization include advanced imaging (MRIs, CT scans), specialty medications, inpatient hospital stays, mental health treatment, physical therapy beyond a set number of visits, and certain surgical procedures. The specific list varies by carrier and plan.
Why Prior Authorization Exists
Carriers use prior auth to confirm a service is medically necessary before agreeing to cover it, reducing unnecessary utilization.
It ensures patients try lower-cost alternatives first (e.g., generic medications before brand-name) when clinically appropriate.
It confirms the provider and facility are in-network and that the setting is appropriate for the level of care.
For high-risk procedures, prior auth adds a clinical review step to confirm the treatment plan is safe and evidence-based.
Important: Prior authorization is not a guarantee of payment. It means the carrier has approved the service as medically necessary, but final payment still depends on your plan's deductible, coinsurance, and benefit structure at the time the claim is processed.
2. Common Reasons Claims Get Denied
Understanding why a claim was denied is the first step in building a successful appeal. Here are the most common denial reasons and what they mean:
No Prior Authorization Obtained
The most common denial. The service required pre-approval, and the provider or patient did not obtain it before the service was rendered.
Not Medically Necessary
The carrier's clinical reviewer determined the service was not medically necessary based on their internal criteria, even if your doctor recommended it.
Out-of-Network Provider
The provider or facility was not in the plan's network, and the plan does not cover out-of-network care for that service type.
Step Therapy Not Met
The plan requires you to try a lower-cost medication first before covering the prescribed drug. If you skipped that step, the claim is denied until step therapy is documented.
Filing Deadline Missed
Most plans require claims to be submitted within a specific timeframe (often 90–180 days). Late submissions can be denied regardless of medical necessity.
Coding or Documentation Errors
Incorrect CPT/ICD codes, missing provider documentation, or incomplete claim forms can trigger an automatic denial that is often reversible on appeal.
3. How to File an Appeal: The Step-by-Step Process
If your claim was denied, you have the right to appeal. Under the Affordable Care Act, all health plans must offer both an internal appeals process and access to an independent external review. Here is how to navigate it:
Read the Denial Letter Carefully
The denial notice (called an Explanation of Benefits or EOB) must state the specific reason for denial, the plan provision or clinical criteria used, and your right to appeal. It should also include instructions on how to file and the deadline. If the letter is unclear, call the carrier's member services line and request a written explanation.
Gather Supporting Documentation
Collect everything that supports the medical necessity of the denied service: a letter of medical necessity from your doctor, clinical notes, test results, relevant medical literature, and documentation of any prior treatments that failed. The stronger your clinical evidence, the higher the chance of reversal.
File the Internal Appeal
Submit a written appeal to your insurance carrier within 180 days of receiving the denial notice. Include a cover letter stating why you disagree, all supporting documentation, and your member ID and claim number. Send it via certified mail or the carrier's online portal and keep proof of submission. Standard appeals must be decided within 30 days; expedited appeals for urgent medical situations within 72 hours.
Request an External Review if Denied
If the internal appeal is denied, you have the right to request an external review by an independent third-party organization. This review is conducted by medical professionals who do not work for your insurance company. External reviews are typically completed within 45 days (or 72 hours for expedited requests). The carrier is legally bound by the external reviewer's decision.
Escalate if Necessary
If the external review is also unfavorable or if you experience unreasonable delays, you can file a complaint with your state's insurance regulator. In Oregon, contact the Division of Financial Regulation . In Washington, contact the Office of the Insurance Commissioner .
4. Tips for a Successful Appeal
5. How Employers & Brokers Can Help Employees
When employees face claim denials, it creates stress, financial uncertainty, and productivity loss. Employers and their benefits brokers can play a critical role in supporting employees through the appeals process:
Proactive Communication
Educate employees about prior authorization requirements before they seek care, so they know what to expect and how to avoid preventable denials.
Appeal Support
An independent broker can help employees read denial letters, gather documentation, and navigate the appeals process—reducing the burden on the employee.
Carrier Advocacy
Brokers with carrier relationships can escalate stalled appeals and hold carriers accountable to their own clinical criteria and timelines.
Prior Authorization & Appeals FAQs
Facing a Denied Claim? We Can Help.
If you or your employees are dealing with a prior authorization denial, PDX Benefits can help you understand your options, gather the right documentation, and navigate the appeals process with confidence.