Insurance Denied 'Not Medically Necessary': How to Fight It and Win

You need medical treatment. Your doctor says you need it. Your insurer says it's "not medically necessary" and refuses to pay. This is one of the most infuriating and contested categories of insurance denial — and it's also one of the most successfully appealed.

"Medical necessity" is a contractual and clinical determination, and insurers frequently get it wrong. When they do, there are clear pathways to challenge the decision — through internal appeals, peer-to-peer reviews, and, ultimately, independent review.

What Does "Medically Necessary" Actually Mean?

Insurance policies typically define medical necessity along these lines: treatment that is appropriate, clinically indicated, and consistent with generally accepted standards of medical practice for the patient's condition — and which is not primarily for the patient's convenience.

The key word is "generally accepted." Insurers often use proprietary clinical criteria (such as MCG Health or InterQual guidelines in the US, or internal clinical review frameworks in the UK, Australia, and Singapore) to assess whether a treatment meets this standard. The problem is that these criteria are:

• Not always aligned with what your treating physician considers best practice
• Sometimes outdated relative to current clinical evidence
• Applied by insurance clinical reviewers who may not be specialists in your specific condition
• Weighted toward cost containment rather than clinical best practice

Understanding this is key to your appeal: you are not just arguing with your insurer. You are challenging a clinical determination made by someone who may not be as qualified as your treating specialist.

Why "Not Medically Necessary" Denials Happen

Common treatment categories that attract medical necessity denials:

Mental health and substance use treatment: Longer residential stays, intensive outpatient programmes, and certain therapeutic approaches are frequently denied on medical necessity grounds. Mental health parity laws (where they apply) are meant to address this.

Surgical procedures: Spinal surgery, bariatric surgery, knee replacements, and other elective-but-clinically-indicated surgeries are commonly denied. "Elective" is often misunderstood — it means "non-emergency scheduled," not "optional."

Durable medical equipment: Wheelchairs, CPAP machines, specialised orthotics, and home health equipment are frequently challenged.

Cancer treatment: Newer targeted therapies, immunotherapies, and treatment combinations may be denied as experimental or not meeting standard criteria — even when they represent the current best practice for that cancer type.

Rehabilitation: Extended physiotherapy, occupational therapy, or speech therapy after an injury or surgery is often cut off earlier than clinicians recommend.

Diagnostic testing: MRI, genetic testing, specialised bloodwork — denied when insurers say standard testing would suffice.

Step-by-Step: How to Fight a Medical Necessity Denial

Step 1: Get the Denial in Writing and Request the Clinical Criteria Used

Request a written denial letter that includes:

• The specific clinical criteria or guidelines used to determine the claim doesn't meet medical necessity
• The credentials and specialty of the clinical reviewer who made the determination
• The specific policy definition of "medically necessary"

You are entitled to this information. In the UK, FCA Consumer Duty requires transparency. In Australia, APRA guidelines require it. In Singapore, MAS Fair Dealing guidelines require it.

Step 2: Talk to Your Treating Doctor Immediately

Your treating physician is your most powerful ally. Before doing anything else, have a detailed conversation with them about:

• Why they believe this treatment is medically necessary
• What clinical guidelines support their recommendation
• What the consequences of not receiving treatment are
• Whether they are willing to engage in a peer-to-peer review with the insurer's clinical reviewer

A doctor who can articulate a clear clinical rationale, backed by published guidelines, is difficult for an insurer to ignore.

Step 3: Request a Peer-to-Peer Review

A peer-to-peer (P2P) review is a direct clinical conversation between your treating physician and the insurer's reviewing clinician. This is one of the most powerful tools in medical necessity disputes and is increasingly available in most regulated insurance markets.

When your doctor speaks directly with the insurer's reviewer — specialist to specialist — the dynamic changes. Studies in the US have shown that peer-to-peer conversations result in overturn rates of 30-50% at this stage alone. The same principle applies in international markets.

Ask your insurer specifically: "Does your internal appeals process allow for a peer-to-peer clinical review? If so, how do we arrange one?"

Step 4: Build Your Clinical Evidence Bundle

Your appeal letter needs to be supported by:

A detailed letter from your treating specialist that includes:

• Your diagnosis and its severity
• The specific treatment being requested and why it is indicated
• What alternatives were considered and why they are insufficient
• Which published clinical guidelines, peer-reviewed studies, or professional society recommendations support this treatment
• The consequences of denying this treatment (functional decline, hospitalisation risk, quality of life impact)

Published clinical guidelines: If the American Medical Association, UK NICE guidelines, the Royal Australian and New Zealand College of Surgeons, or any relevant professional body has issued guidance supporting your treatment, include it. Insurers find it very hard to claim a treatment isn't medically necessary when a national clinical guideline body says otherwise.

Your medical records: The portions of your records that document your condition's severity and history.

Step 5: File Your Formal Internal Appeal

Write a structured appeal letter that:

• States the claim and denial date
• Summarises your condition and the treatment required
• Explains why the denial is clinically incorrect
• References the clinical guidelines that support the treatment
• Requests that the appeal be reviewed by a clinician with relevant specialty expertise
• Requests a peer-to-peer review if not already completed

Send the letter with your full evidence bundle.

Step 6: Escalate to Independent Review

If the internal appeal fails:

• UK: Escalate to the Financial Ombudsman Service (FOS). The FOS can and does review clinical determinations made by health insurers and has overturned medical necessity denials.
• Australia: Escalate to AFCA. For private health insurance, you can also use the PHIO as a resource.
• Singapore: Escalate to FIDReC. For hospital and surgical insurance, FIDReC accepts disputes involving clinical necessity decisions.
• Malaysia: Escalate to OFS at ofs.org.my.

At the independent review stage, the reviewer is not bound by the insurer's clinical criteria. They assess whether the insurer's decision was reasonable and fair given the overall clinical picture.

Common Mistakes to Avoid

Appealing without your doctor's involvement: A medical necessity appeal without a supporting doctor letter is extremely difficult to win. Your doctor's clinical voice is essential.

Not asking for the clinical criteria used: If you don't know what criteria the insurer applied, you can't challenge it effectively.

Accepting "it's experimental" without checking current guidelines: What was experimental five years ago may now be the standard of care. Check current professional society guidelines.

Not requesting a peer-to-peer review: This step is underused and highly effective. Doctors advocating directly for their patients see significantly higher overturn rates than paperwork appeals alone.

Missing internal appeal deadlines: Most policies have strict deadlines for filing internal appeals (often 30-60 days from the denial date). Missing this deadline can forfeit your right to appeal.

Not requesting specialty-specific review: If your claim is for a complex neurological condition and the insurer's reviewer is a general practitioner, you can request that the appeal be reviewed by a neurologist. Make this request explicitly.

The Role of Clinical Guidelines in Appeals

Published clinical guidelines from authoritative bodies carry enormous weight in medical necessity appeals. Useful sources include:

• UK: NICE (National Institute for Health and Care Excellence) at nice.org.uk
• Australia: NHMRC (National Health and Medical Research Council) at nhmrc.gov.au
• Singapore: MOH Clinical Practice Guidelines at moh.gov.sg
• International: Professional specialty societies (cardiology, oncology, orthopaedics, psychiatry) publish their own clinical guidelines that carry weight globally

If your treatment is supported by a guideline from any of these bodies, reference it explicitly in your appeal letter with the document title and publication date.

A Note on Mental Health Parity

Mental health treatment denials based on medical necessity are particularly problematic because of parity laws. In many jurisdictions, insurers must apply the same clinical standards to mental health treatment as they do to physical health treatment.

If your mental health claim has been denied on medical necessity grounds, check whether your insurer is applying stricter standards to mental health than they would to comparable physical health conditions. This is a strong ground for both regulatory complaint and escalation.

Getting Help With Your Appeal

Writing a medical necessity appeal letter that correctly references clinical guidelines, includes the right regulatory language, and clearly presents your clinical evidence requires careful drafting.

ClaimBack (claimback.app) generates professional medical necessity appeal letters tailored to your specific treatment type, country, and insurer. The tool helps you frame your case with the right clinical and regulatory language, and is free to use.

Summary

1. Get the denial in writing with the specific clinical criteria cited
2. Talk to your treating doctor and get their advocacy in writing
3. Request a peer-to-peer review between your doctor and the insurer's clinician
4. Build a clinical evidence bundle with guidelines, medical records, and specialist letters
5. File a structured internal appeal
6. If denied, escalate to your country's independent review body
7. Never let the insurer's clinical reviewer have the final word without challenge