Should I appeal or just pay it

Most people who face this decision underestimate two things: the odds an internal appeal wins, and how quickly a small denial today turns into a bigger one next month if the underlying billing issue is not fixed. Here is a way to think through it in about five minutes.

The number that matters

Compare the amount the insurer is refusing to pay to the amount you would spend on the appeal.

• Your side: the tier you buy plus the cost of certified mail (about $6 to $10) plus your time (call it an hour).
• Insurer side: what they are not paying.

If the amount they are refusing is less than about $150, and the denial is a one-off clerical thing that will not recur, paying may be the rational move. If the amount is over $200, or the denial pattern will repeat on future claims, appealing is usually worth it.

Appeal even for small amounts if either of these is true

1. The denial is systemic and will recur. If your insurer is denying a prescription refill as "not covered" and you need it monthly, a successful first-level appeal usually creates a note in your case file that stops future denials. A $30 appeal today can save $30 every month.

2. The claim was denied for missing information the provider already sent. Many CO-16 denials are the plan losing paperwork the provider submitted. Appealing forces the plan to reconcile. This is quick to write and cheap to send.

Base rates

Published research on internal appeals gives ranges to keep in mind. Individual studies vary, but a reasonable planning number is that first-level internal appeals in commercial group health plans are overturned in roughly 30 to 50 percent of cases when the appeal is well-written and cites the plan document. External reviews of already-denied appeals also overturn a meaningful share, sometimes 20 to 40 percent. Do not treat these as guarantees. They are the ballpark.

When to pay

• The disputed amount is under $100 and the denial is a one-time thing
• You already got the same denial reversed on a prior claim and can point to that in a phone call rather than a new appeal
• The provider agreed to write off the balance if the insurer does not pay
• The claim is over three years old and the plan's timely-filing window has closed

When to appeal

• The disputed amount is $200 or more
• The denial pattern will repeat on future claims for the same care
• You are inside 180 days of the denial date (group health) or 60 days (Medicare Advantage)
• The denial reason is medical necessity for care your treating physician has already documented
• The denial reason is coverage of a service the plan document says is covered

When to skip straight to a lawyer

If the amount is over $50,000, if you are in active treatment for a life-threatening condition, or if the plan is refusing to acknowledge a valid claim at all, an ERISA attorney is worth their fee. See When to hire an ERISA attorney (and how).

What to do next

If you decided to appeal, preview a draft for free at /new. If you decided to pay, save this article for the next time. If you are unsure, use the free preview to see what your letter would say, then decide.