The first question most patients ask when facing an insurance denial is: "Is this worth fighting?" The data says: overwhelmingly yes. Insurance appeals succeed at rates most people find surprising — and external reviews, the often-overlooked second step, overturn internal decisions at an even higher rate.
That last number is the most striking: fewer than 1 in 100 denied claims are ever appealed. Insurers count on this. Their denial systems are designed for a population that mostly accepts the denial and moves on.
Internal Appeal Success Rates by Plan Type
The most comprehensive data on internal appeals comes from CMS (Centers for Medicare & Medicaid Services) mandatory reporting for marketplace plans and from the Kaiser Family Foundation (KFF) analysis of ACA plan data.
| Plan Type | Denials Appealed | Internal Reversal Rate |
|---|---|---|
| ACA Marketplace Plans | <1% of denials | 39–59% |
| Employer-Sponsored Plans (insured) | <1% of denials | varies (40–63%) |
| Medicare Advantage | ~12% of denials appealed | 75%+ |
| Medicaid Managed Care | varies by state | 30–55% |
Medicare Advantage has the highest appeal rates and highest success rates — likely because Medicare patients are more experienced with the healthcare system and because Medicare Advantage plans face stricter regulatory oversight.
KFF 2023 Marketplace Data: The Breakdown
The Kaiser Family Foundation's analysis of CMS marketplace data for plan year 2021 found that ACA marketplace insurers denied 17% of in-network claims. Of those denials:
- Only 0.2% of denied claims were appealed by patients
- Of the claims that were appealed, 59% were overturned in the patient's favor
- The most common denial reason was "not medically necessary" (39% of all denials)
- The insurer with the highest denial rate denied 49% of claims; the lowest denied 1%
The selection effect
These success rates likely understate the true probability for any individual appeal, because the patients who appeal tend to have stronger cases than average (they're more motivated to fight and often have physician support). Patients with clearly winning appeals are more likely to appeal. But even accounting for this, a 40–60% overturn rate represents an enormous potential financial benefit for time invested.
External Review: The Often-Skipped Second Step
Under the ACA, if your internal appeal is denied, you have the right to an external review by an Independent Review Organization (IRO) — a completely separate company hired to independently evaluate your claim. External review data is striking:
- External review is available for any final adverse benefit determination from a non-grandfathered plan
- IROs must be certified and follow URAC or NCQA accreditation standards
- The IRO's decision is binding on the insurer
- For ACA marketplace plans, approximately 40% of external reviews result in overturn of the internal denial
External review is free for the patient. The insurer pays the IRO's fee. There is virtually no downside to requesting external review after an internal denial — the risk is only your time.
What Makes Appeals Win: Common Factors
Based on analysis of appeal outcomes and patient advocate reporting, appeals are most likely to succeed when:
- The physician letter directly addresses the denial criteria — not just restating the diagnosis, but point-by-point responding to the specific clinical guidelines used in the denial
- Published evidence is cited — appeals supported by peer-reviewed studies from recognized journals succeed at higher rates
- Clinical guidelines from specialty societies are referenced — NCCN (oncology), AHA (cardiology), IDSA (infectious disease), etc.
- Step therapy failure is documented — if required to try another treatment first, document why it failed or is contraindicated
- The denial reason is directly refuted, not just restated — successful appeal letters don't just say "this is necessary"; they explain why the insurer's stated reason is wrong
Financial Stakes: Why This Matters
The average denied claim in employer-sponsored health insurance is approximately $300–$400. But individual claims can be much larger. A denied hospital stay, surgical procedure, or specialty drug can run $10,000–$100,000 or more. At a 40–60% reversal rate, even accounting for the time investment, appeals are almost always worth pursuing for denials above $500.
Use our appeal probability checker to estimate your specific chances, or our free letter generator to build your appeal efficiently. If you're not sure where to start after a denial, check our denial checklist for next steps.
Sources: Kaiser Family Foundation (KFF) analysis of CMS marketplace plan data (2021–2023) · CMS Medicare Advantage appeals data · NAIC consumer complaint data. Disclaimer: This article is for informational purposes only. Individual outcomes vary. Last updated: March 2026.