The 15 Most Common Reasons Health Insurance Claims Are Denied (With Statistics)

Health insurance claims are denied for dozens of reasons, but the data shows that a small number of denial categories account for the vast majority of all denials. Understanding exactly why claims get denied — and which denial reasons are most often successfully appealed — is essential for providers managing revenue cycle and for patients navigating the insurance system.

This post draws on data from CMS, KFF, the American Medical Association, Change Healthcare, and AHIP to present the 15 most common claim denial reasons, how frequently each occurs, and the statistical likelihood of overturning each on appeal.

How Denial Data Is Collected

The most comprehensive denial reason data comes from three sources:

1. CMS Transparency in Coverage reporting — ACA marketplace insurers must report Denial Rates by Insurer (2026)" class="auto-link">denial rates by denial reason code starting with 2020 plan year data.
2. The AMA's Annual Prior Authorization Denied: How to Appeal" class="auto-link">Prior Authorization Survey — tracks physician-reported denial reasons for prior authorization requests specifically.
3. Revenue cycle management vendors (Change Healthcare, Experian Health, Waystar) — publish annual denial trend reports based on claims processed across their networks.

The figures below represent aggregated data across these sources. Where sources disagree, ranges are provided.

The 15 Most Common Denial Reasons

1. Prior Authorization Not Obtained or Denied

Share of all denials: 23–27% Appeal overturn rate: 43–61%

Prior authorization is the leading cause of claim denial by volume. Insurers require pre-approval for a growing list of services, and claims submitted without authorization — or after authorization was denied — are rejected automatically.

The AMA's 2023 survey found that 94% of physicians reported that prior authorization delays care, and 29% of practices reported hiring staff dedicated primarily to managing prior authorization requests.

Key facts:

• The average practice submits 41 prior authorization requests per physician per week (AMA, 2023)
• 12% of those requests are ultimately denied after review
• Of denied prior auth requests, 61% are eventually approved on appeal (OIG Medicare Advantage data, 2022)
• 13% of patients abandon recommended treatments when prior auth is denied (AMA, 2023)

The ACA requires that health plans applying prior authorization use "evidence-based clinical criteria." CMS finalized new rules in 2024 requiring MA plans to streamline prior auth processes and reduce turnaround times.

How to fight it: Appeal with the treating physician's clinical notes, the relevant diagnostic criteria, and — most importantly — a citation to the insurer's own clinical policy documents demonstrating the service meets its stated criteria. A peer-to-peer review request should accompany or precede every prior auth denial appeal.

2. Medical Necessity Denial

Share of all denials: 19–24% Appeal overturn rate: 55–65%

A medical necessity denial occurs when the insurer determines that the requested service, while covered under the policy, was not clinically appropriate for the patient's condition. This is the most common reason for post-service claim denial (as opposed to pre-service prior auth denial).

Medical necessity is defined in each insurer's contract and clinical policy documents. The definition typically includes criteria such as:

• Consistent with generally accepted standards of medical practice
• Clinically appropriate for the patient's diagnosis and condition
• Not primarily for the convenience of the patient or provider
• The most appropriate level of care for the condition

The statistical problem: Approximately 65% of internal appeals challenging medical necessity denials are overturned. This means that when a provider takes the time to document why a service was medically necessary per the insurer's own criteria, the insurer agrees — in the majority of cases — that it was wrong.

For a full guide to fighting these denials, see Medical Necessity Denial Appeal Guide.

3. Coding and Billing Errors

Share of all denials: 18–25% Resolution rate via correction/resubmission: 55–75%

Coding errors are the most administratively fixable denial category. They include:

• Incorrect CPT code for the service rendered
• Diagnosis code (ICD-10) not supporting the billed procedure
• Mismatched procedure and modifier codes
• Missing or incorrect place of service code
• Incorrect National Drug Code (NDC) for pharmaceutical claims

The Change Healthcare 2022 Denials Index found that coding errors accounted for 24% of all commercial claim denials. The good news: the majority of these can be corrected and resubmitted without a formal appeal.

What providers often miss: Many coding-related denials are actually bundling or unbundling issues — where the billed codes should be combined under a single code (bundling) or the insurer is improperly paying one code when separate codes are warranted (unbundling). These are addressable through a corrected claim submission, not a standard appeal letter.

4. Timely Filing Violations

Share of all denials: 7–12% Appeal overturn rate: 14–22%

Every insurer sets deadlines for claim submission after the date of service. Commercial plans typically require submission within 90–365 days. Medicare requires submission within 12 months. Medicaid deadlines vary by state (90 days to 12 months).

Timely filing denials have the lowest appeal overturn rate of any denial category — approximately 18% — because the denial is not clinical but contractual. The only successful appeal paths are:

1. Providing proof the claim was submitted on time (clearinghouse transmission records)
2. Demonstrating a documented exception (e.g., the insurer failed to notify the provider of the correct billing address, or there was a coordination of benefits delay)

Prevention is the only reliable strategy for timely filing denials. Automated claim tracking systems that flag claims approaching their filing deadline are essential.

5. Duplicate Claim Submission

Share of all denials: 5–8% Resolution rate: 20–30%

A duplicate claim denial occurs when the insurer has already received and processed (or is processing) a claim for the same service, patient, and date of service. Common causes:

• Claim resubmitted after a perceived non-payment without first verifying the original claim status
• Clearinghouse resubmitting claims that were already received
• Coordination of benefits claims submitted to both insurers simultaneously

These denials are rarely "wrong" in the clinical sense — they are an administrative result of process failures. Most are resolved by providing claim tracking documentation proving the duplicate was a submission error, not an attempt to double-bill.

6. Member Not Eligible / Coverage Not Active

Share of all denials: 6–9% Resolution rate: 35–50%

Eligibility denials occur when the insurer's records show the patient was not covered on the date of service. This can result from:

• Coverage lapsed or terminated
• Grace period premium non-payment (ACA plans have a 90-day grace period; claims in months 2–3 can be held and ultimately denied)
• Retroactive disenrollment
• Incorrect member ID entered at time of service
• Coordination of benefits — claim submitted to wrong primary insurer

A meaningful share of eligibility denials are insurer data errors, not actual coverage gaps. Providers who verify eligibility in real time at point of service (not just at scheduling) and retain verification records can often overturn these denials.

7. Service Not Covered Under the Plan

Share of all denials: 5–7% Appeal overturn rate: 18–31%

Benefit exclusion denials occur when the insurer determines the service is not covered under the patient's plan. Common non-covered services include:

• Adult dental and vision services (most medical plans)
• Weight loss surgery (some plans, though Affordable Care Act requirements have expanded coverage)
• Cosmetic procedures
• Experimental or investigational treatments
• Services provided outside the plan's service area

Benefit exclusion denials are more difficult to appeal than medical necessity denials, but not impossible. Appeal strategies include:

• Demonstrating the service was miscategorized (a reconstructive procedure billed as cosmetic, for example)
• Citing ACA essential health benefit requirements
• Challenging experimental/investigational designations using current clinical evidence

8. Out-of-Network Service

Share of all denials: 4–6% Appeal overturn rate: 38–45%

Out-of-network denials occur when the provider is not contracted with the patient's insurer. For HMO and EPO plans, out-of-network care is typically not covered except in emergencies.

The No Surprises Act (effective January 2022) significantly changed the landscape for out-of-network emergency and facility-based care. Key provisions:

• Patients cannot be billed more than in-network cost-sharing for emergency services at any facility
• Patients at in-network facilities cannot be billed by out-of-network providers (like anesthesiologists or radiologists) without prior consent
• Insurer-provider payment disputes go to independent dispute resolution

Providers experiencing out-of-network denials for services subject to the No Surprises Act should file complaints with CMS or the relevant state insurance department, not just appeal through the insurer's standard process.

9. Experimental or Investigational Treatment

Share of all denials: 3–5% Appeal overturn rate: 50–58%

Insurers deny claims for treatments they classify as experimental or investigational (E/I), meaning the treatment lacks sufficient evidence of safety and efficacy to meet the insurer's coverage standard. Common targets include:

• Gene therapy
• Newer targeted cancer therapies
• Off-label drug use
• Emerging surgical techniques

The 50–58% appeal overturn rate for E/I denials is the second-highest of any denial category. This reflects the fact that "experimental" is a moving target — treatments regularly transition from E/I status to covered status as evidence accumulates, and insurers do not always update their policies in real time.

The most effective appeal strategy for E/I denials is a comprehensive literature review demonstrating that the treatment has been endorsed by major clinical societies or has phase III trial evidence of efficacy.

10. Coordination of Benefits Issues

Share of all denials: 3–5% Resolution rate: 45–60%

When a patient has coverage under two insurance plans, the coordination of benefits (COB) rules determine which plan pays first (primary) and which pays second (secondary). COB denials occur when:

• The claim was submitted to the wrong primary insurer
• The secondary insurer is waiting for the primary EOB)" class="auto-link">explanation of benefits (EOB)
• Both insurers believe the other is primary

These denials are almost always resolvable by resubmitting the claim in the correct order with the primary insurer's EOB attached.

11. Referral Required But Not Obtained

Share of all denials: 2–4% Appeal overturn rate: 35–42%

HMO plans require patients to obtain a referral from their primary care physician before seeing a specialist. Claims submitted without the required referral are denied. In some cases, retroactive referrals can be obtained; in others, a medical emergency exception can be documented.

12. Maximum Benefit Reached

Share of all denials: 1–3% Appeal overturn rate: 15–25%

Some services — particularly behavioral health, physical therapy, and home health — have annual or lifetime visit limits under certain plans. When those limits are reached, additional claims are denied. The Mental Health Parity and Addiction Equity Act (MHPAEA) prohibits imposing stricter limits on behavioral health than on comparable medical benefits. Parity violation appeals have a meaningful success rate.

13. Lack of Medical Records / Insufficient Documentation

Share of all denials: 2–4% Resolution rate: 60–70%

These denials — often labeled "request for additional information not received" — occur when the insurer requests medical records to support the claim and does not receive them within the required timeframe. They are almost entirely preventable and resolvable by submitting the requested documentation.

14. Wrong Insurer / Coordination of Benefits Order Error

Share of all denials: 1–3% Resolution rate: 50–65%

Distinct from COB issues, these denials occur when the claim is submitted to an insurer that is not responsible for the claim at all — for example, submitting a workers' compensation claim to a group health insurer, or submitting to a lapsed plan.

15. Place of Service Error

Share of all denials: 1–2% Resolution rate: 60–75%

The place of service code on a claim must match where the service was actually performed. A claim billed with an inpatient facility code for a service performed in an outpatient setting will be denied. These are coding/administrative errors corrected by resubmitting with the accurate place of service code.

Denial Reason Summary: Frequency and Appealability

Denial Reason                        | % of All Denials | Appeal Overturn Rate
-------------------------------------|------------------|--------------------
Prior auth not obtained/denied       | 23–27%           | 43–61%
Medical necessity                    | 19–24%           | 55–65%
Coding/billing error                 | 18–25%           | 55–75% (resubmission)
Timely filing                        | 7–12%            | 14–22%
Duplicate claim                      | 5–8%             | 20–30%
Eligibility/coverage not active      | 6–9%             | 35–50%
Not covered under plan               | 5–7%             | 18–31%
Out-of-network                       | 4–6%             | 38–45%
Experimental/investigational         | 3–5%             | 50–58%
Coordination of benefits             | 3–5%             | 45–60%
Referral not obtained                | 2–4%             | 35–42%
Maximum benefit reached              | 1–3%             | 15–25%
Insufficient documentation           | 2–4%             | 60–70%
Wrong insurer                        | 1–3%             | 50–65%
Place of service error               | 1–2%             | 60–75%

The Strategic Takeaway

If you had to allocate limited staff time to appeals, the data points to a clear priority order:

1. Medical necessity denials — high volume, high overturn rate, recoverable revenue
2. Prior authorization denials — very high volume, moderate-to-high overturn rate, peer-to-peer review is the lever
3. Experimental/investigational denials — lower volume but highest clinical stakes, strong overturn rate
4. Out-of-network denials — especially post-No Surprises Act, meaningful overturn rate
5. Coding errors — high volume but resolved by resubmission, not formal appeal

Timely filing and duplicate claim denials are largely preventable through better revenue cycle processes. Prioritizing those categories is a prevention problem, not an appeal problem.

How ClaimBack Addresses Each Denial Type

ClaimBack generates appeal letters specific to the denial reason on your Explanation of Benefits (EOB) or denial letter. Whether the denial cites lack of medical necessity, experimental status, or prior authorization, ClaimBack structures the response to address the specific clinical and administrative criteria the insurer uses to evaluate that denial type.

You paste the denial reason. ClaimBack drafts the appeal. Your physician reviews and signs. The letter goes out.

Fight your denial with ClaimBack — free for your first case.

Related Resources

• Health Insurance Denial Statistics 2025
• Insurance Appeal Success Rates by Insurer (2024–2025)
• How to Appeal an Insurance Denial
• Medical Necessity Denial Appeal Guide

Sources

1. American Medical Association. "2023 AMA Prior Authorization Physician Survey." ama-assn.org.
2. KFF. "Claims Denials and Appeals in ACA Marketplace Plans." kff.org, 2023.
3. CMS. Transparency in Coverage Machine-Readable Files, 2023 plan year. cms.gov.
4. Change Healthcare. "2022 Revenue Cycle Denials Index." changehealthcare.com.
5. Experian Health. "State of Claims 2023." experian.com/health.
6. HHS Office of Inspector General. "Medicare Advantage Prior Authorization." OEI-09-18-00260, 2022.
7. AHIP. "Health Plan Claims Payment Data, 2023." ahip.org.
8. Waystar. "2023 Revenue Integrity Trend Report." waystar.com.
9. CMS. "No Surprises Act: Overview and Implementation." cms.gov, 2022.