Medicare Advantage Claim Denied: How to Appeal a Part C Denial

Medicare Advantage Claim Denied: How to Appeal a Part C Denial

Medicare Advantage (Part C) plans — offered by private insurers like UnitedHealthcare, Humana, Aetna, Cigna, BCBS, and others — have been under intense scrutiny for high rates of claim denials. A landmark 2022 government report found that Medicare Advantage plans frequently denied claims that should have been paid under Original Medicare. If your Medicare Advantage plan has denied a claim, prior authorization, or referral, you have a specific, multi-level federal appeal process with strong protections.

About Medicare Advantage

Medicare Advantage plans are approved and regulated by the Centers for Medicare & Medicaid Services (CMS). They must provide at least the same coverage as Original Medicare (Parts A and B) but can impose additional requirements like:

• Prior authorizations not required by Original Medicare
• Network restrictions (HMO, PPO structures)
• Plan-specific formularies and step therapy requirements

The tension between these private insurer restrictions and the Medicare benefit guarantee is the source of most Medicare Advantage claim disputes.

Common Medicare Advantage Denial Reasons

Prior authorization denials: Medicare Advantage plans require prior authorization for many services that Original Medicare covers without it — inpatient hospital admissions, skilled nursing facility care, specialty drugs, certain imaging, and more. The Office of Inspector General found that millions of Medicare Advantage prior authorizations are denied each year for services that meet Medicare coverage criteria.

Medical necessity denials: The plan's clinical reviewers determine that a service is not medically necessary — often applying criteria more restrictive than Medicare's own coverage rules.

Non-preferred or out-of-network provider: Services from providers outside the plan's network (for HMO plans) or from non-preferred providers (for PPO plans) may be denied or paid at a lower rate.

Skilled nursing facility (SNF) and home health denials: Medicare Advantage plans frequently deny SNF stays or home health benefits earlier than Original Medicare would allow, arguing that the member no longer meets the clinical criteria.

Formulary and step therapy denials: If your medication is not on the plan's formulary, or if the plan requires you to try a cheaper drug first, the claim will be denied.

Coding and billing errors: As with all insurance, billing code mismatches can cause improper denials.

The Medicare Advantage Appeal Process (5 Levels)

Medicare Advantage has a five-level appeals process mandated by CMS. Each level provides an independent review.

Level 1: Plan Reconsideration

After receiving a denial notice (called an Adverse Organization Determination):

• File a reconsideration request with your plan within 60 days of the denial
• The plan must decide within 30 days (standard) or 72 hours (expedited/urgent)
• For urgent care, request an expedited reconsideration — you don't have to wait 30 days

For coverage decisions (before you receive care): Request a reconsideration if the plan denied a service you need. The plan must respond within 30 days (standard) or 72 hours (expedited).

Level 2: Independent Review Entity (IRE)

If the plan upholds the denial after reconsideration:

• CMS appoints an Independent Review Entity (IRE) — currently Kepro — to conduct an independent review
• Request IRE review within 60 days of the plan's reconsideration decision
• IRE must decide within 30 days (standard) or 72 hours (expedited)
• IRE reviews are binding on the plan but not on you (you can continue to appeal)

Important: If the amount in dispute is less than $100, you cannot proceed to Level 3.

Level 3: Office of Medicare Hearings and Appeals (OMHA) — ALJ Hearing

If the IRE upholds the denial and the amount in dispute exceeds $180 (2024 threshold, adjusted annually):

• Request an Administrative Law Judge (ALJ) hearing from the Office of Medicare Hearings and Appeals (OMHA)
• File within 60 days of the IRE decision
• OMHA must schedule the hearing within 90 days (though delays are common)
• You can appear in person, by phone, or by video
• ALJ hearings frequently overturn IRE decisions — many denials that survive IRE review are overturned at this level

Level 4: Medicare Appeals Council (MAC)

If the ALJ upholds the denial:

• Appeal to the Medicare Appeals Council within 60 days of the ALJ decision
• MAC review is a paper review (no hearing)
• MAC must decide within 90 days

Level 5: Federal District Court

If the MAC upholds the denial and the amount in dispute exceeds $1,840 (2024 threshold):

• File a civil action in federal district court within 60 days of the MAC decision
• This is the final level of the Medicare appeals process

Expedited Appeals for Urgent Situations

At every level, you can request an expedited (fast) appeal if waiting the standard timeframe would seriously jeopardise your life, health, or ability to regain maximum function. Expedited decisions are required within 72 hours at the plan and IRE levels.

Medicare Advantage-Specific Rights

Continuation of care during inpatient denials: If your plan is trying to discharge you from a hospital or SNF early, you have the right to appeal and continue receiving care while the appeal is pending. You must receive a Detailed Notice of Discharge (DNDASH) and can request an expedited review from the Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO) — not the plan itself.

Formulary exception: If your drug is not on the formulary or requires step therapy, request a formulary exception. The plan must grant an exception if your physician certifies that the covered alternative is clinically inappropriate for you. Plans must decide formulary exceptions within 72 hours (standard) or 24 hours (expedited).

State Health Insurance Assistance Programs (SHIP): Free, unbiased Medicare counselling is available from your state's SHIP. SHIP counsellors can help you navigate the appeal process. Find your SHIP at shiptacenter.org.

Medicare ombudsman: The Medicare Beneficiary Ombudsman (1-800-MEDICARE) can help you understand your rights and navigate the appeals process.

Step-by-Step: Appealing a Medicare Advantage Denial

Step 1: Request a Written Adverse Organization Determination (AOD)

You must have a written denial before you can formally appeal. If you received a verbal denial, request the written AOD from your plan.

Step 2: Gather Your Evidence

• Your physician's detailed letter supporting the medical necessity of the denied service
• Your relevant medical records
• Documentation of Original Medicare's coverage criteria for the service (from medicare.gov)
• Any peer-reviewed guidelines supporting your treatment

Step 3: File Level 1 Reconsideration with Your Plan

Submit a formal appeal letter to your plan's appeals department:

• UnitedHealthcare: uhcmedicaresolutions.com
• Humana: humana.com
• Aetna Medicare: aetna.com
• BCBS: Your local BCBS plan's member portal

Request expedited review if your situation is urgent.

Step 4: Escalate to IRE (Level 2) If Plan Upholds Denial

Ask your plan to auto-forward your appeal to Kepro (the IRE), or contact Kepro directly. Kepro's decision is binding on the plan.

Step 5: Request ALJ Hearing (Level 3)

If the amount in dispute is over $180, file for an ALJ hearing through OMHA. This is where many Medicare Advantage denials are overturned — ALJs are independent and apply Medicare's legal coverage standards, not the plan's internal criteria.

Conclusion

Medicare Advantage plans have strong financial incentives to deny claims, and federal investigations have documented widespread inappropriate denials. But you have a robust, federally mandated five-level appeals process — and ALJ hearings in particular overturn denials at a high rate. Use your rights. Start with Level 1 immediately, request expedited review for urgent situations, and escalate all the way to an ALJ hearing if necessary. Use ClaimBack at claimback.app to generate a professional appeal letter addressing Medicare's coverage criteria.

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• Medicaid Claim Denied: Your Rights and How to Appeal
• TRICARE Claim Denied: How to Appeal Your Military Insurance
• How Long Does an Insurance Appeal Take?
• How to Find Your Insurance Ombudsman