Insurance Claim Denial Rates by Insurer (2026)" class="auto-link">Denial Rates by State: 2025 Data and Rankings

Where you practice medicine — or where you live as a patient — significantly affects how likely your insurance claims are to be denied. ACA marketplace insurers in some states deny more than 1 in 5 claims. In others, the rate is below 1 in 14. The variance is driven by insurer market concentration, state regulatory enforcement, and the strength of state consumer protection laws.

This post presents the most current state-level denial rate data available from CMS, KFF, and state insurance departments, along with a summary of each state's external appeal rights and what providers in high-denial states should do differently.

Data Sources and Methodology

State-level denial rate data comes from two primary sources:

1. CMS Transparency in Coverage (TiC) machine-readable files — ACA marketplace insurers must submit claim-level data annually. KFF processes this data and publishes state-level summaries. The most recent complete data covers 2023 plan year claims.

2. State insurance department annual reports — Approximately 35 states publish annual reports including complaint data, external appeal outcomes, and insurer-specific denial statistics. Quality and detail vary significantly by state.

Figures below represent in-network claim denial rates for ACA marketplace plans unless otherwise specified. Medicare Advantage and Medicaid denial rates follow different regulatory reporting requirements.

States with the Highest Denial Rates

1. Texas — 22.1%

Texas has the highest average ACA marketplace denial rate in the country. Contributing factors:

• Highly concentrated insurer market (Blue Cross Blue Shield of Texas and Molina dominate)
• State legislature has historically resisted additional insurance regulation
• Texas did not expand Medicaid under the ACA, pushing more enrollees into marketplace plans with higher actuarial risk

Texas operates an External Independent Review: Complete Guide" class="auto-link">external review program but it is administered by the Texas Department of Insurance with fewer independent reviewers than states like California and New York. Approximately 6,400 external reviews were filed in Texas in 2023, with a 38% overturn rate.

For Texas providers: Document Prior Authorization Denied: How to Appeal" class="auto-link">prior authorization approvals meticulously. Texas insurers have higher rates of retroactive prior authorization denial (approving in advance, then denying the claim post-service). Contemporaneous documentation of the approval — including approval number, date, and approving reviewer — is critical for appeal.

2. Florida — 21.4%

Florida's high denial rate is driven by:

• Among the largest Medicare Advantage enrollment in the country (Florida has a large elderly population)
• Heavy concentration of for-profit insurers
• High rate of out-of-network provider billing in tourist and seasonal markets

Florida's external appeal law requires IROs) Explained" class="auto-link">independent review organizations to issue decisions within 45 days for standard appeals and 72 hours for expedited appeals. The Florida Office of Insurance Regulation published a 2023 report showing that external reviewers overturned insurer decisions in 41% of completed external reviews — above the national average.

For Florida providers: The No Surprises Act is particularly relevant in Florida, where large tourist markets and seasonal care patterns generate more out-of-network billing disputes than most states. File NSA-related disputes through the federal Independent Dispute Resolution (IDR) process, not the state external appeal process.

3. Georgia — 20.9%

Georgia did not expand Medicaid until 2023, and its partial expansion (the "Pathways" program) created coverage gaps that result in coordination of benefits confusion and eligibility-related denials. Georgia also has:

• High rate of rural hospital closures, creating out-of-network situations where in-network options do not exist
• Relatively limited state insurance regulatory staffing

Georgia's external review law follows the NAIC model and has a 45-day standard timeline. The Georgia Department of Insurance processed approximately 3,200 external reviews in 2023.

4. North Carolina — 19.3%

North Carolina's marketplace is dominated by BCBS of North Carolina, which holds approximately 65% market share. High market concentration is consistently associated with higher denial rates — competition provides incentive to approve more claims to attract provider networks and enrollees.

North Carolina passed the Health Care Cost Reduction and Transparency Act in 2021, which includes provisions requiring insurers to provide more detailed denial reason data. Early data under this law suggests denial rates have modestly declined since implementation.

5. Tennessee — 18.8%

Tennessee's marketplace has experienced significant insurer participation fluctuations — there were periods with a single marketplace insurer in some counties. Single-insurer markets show denial rates approximately 3–4 percentage points higher than competitive markets, according to KFF research.

States with the Lowest Denial Rates

1. Massachusetts — 5.2%

Massachusetts has the lowest ACA marketplace denial rate in the country, reflecting:

• The nation's most extensive state health insurance regulatory framework, predating the ACA (Massachusetts Health Care Reform Act, 2006)
• The Health Policy Commission, which actively monitors insurer behavior
• Mandatory external review with binding decisions
• An extensive network of consumer assistance programs that help enrollees navigate appeals

Massachusetts's external review program handled approximately 4,100 cases in 2023 and overturned insurer decisions in 52% of completed reviews — the highest overturn rate among large-state programs.

2. Vermont — 6.1%

Vermont's Green Mountain Care Board regulates insurer rates and coverage decisions more extensively than any other state. Vermont also has the most complete health outcomes data infrastructure in the country, which insurers must use when making medical necessity determinations — limiting arbitrary denials.

3. Minnesota — 7.4%

Minnesota's Division of Health Policy maintains detailed insurer performance data and publishes annual quality scorecards. Insurers with poor denial management practices face regulatory scrutiny. The state also has robust consumer advocacy resources through MNsure (the state marketplace) and a network of navigator organizations.

4. Oregon — 8.0%

Oregon expanded Medicaid early and aggressively, reducing marketplace plan enrollment concentration and risk mix. The Oregon Insurance Division actively investigates denial patterns and has taken enforcement action against insurers with statistically aberrant denial rates.

5. California — 8.9%

California's Department of Managed Health Care (DMHC) is the most active state insurance regulator in the country for health insurance specifically. DMHC:

• Conducts regular financial examinations of health plans
• Publishes the Independent Medical Review Annual Report with insurer-level data
• Can impose financial penalties for improper denials
• Operates a Help Center that resolves thousands of individual disputes annually

California's IMR program processed 7,882 cases in 2023 and overturned insurer decisions in 47% of completed reviews.

Full State Rankings: ACA Marketplace Denial Rates

State Denial Rate Rankings (ACA Marketplace, In-Network, 2023)

Highest Denial Rates:
1.  Texas              22.1%
2.  Florida            21.4%
3.  Georgia            20.9%
4.  North Carolina     19.3%
5.  Tennessee          18.8%
6.  Mississippi        18.4%
7.  Alabama            18.1%
8.  South Carolina     17.9%
9.  Oklahoma           17.7%
10. Louisiana          17.5%
11. Arkansas           17.2%
12. Nevada             16.8%
13. Arizona            16.4%
14. Montana            16.1%
15. Wyoming            15.9%
16. Idaho              15.7%
17. West Virginia      15.4%
18. Kansas             15.2%
19. Missouri           15.0%
20. Nebraska           14.8%

Median States:
21–35. (National average: 15.0%)

Lowest Denial Rates:
46. California         8.9%
47. Oregon             8.0%
48. Minnesota          7.4%
49. Vermont            6.1%
50. Massachusetts      5.2%

Source: KFF analysis of CMS Transparency in Coverage data, 2024

External Appeal Laws by State: Where Patients Have the Strongest Rights

Every state has some form of external appeal law, but quality varies significantly. Key dimensions:

• Who is the reviewer? Independent review organizations (IROs) vs. state agency reviewers vs. arbitrators
• Binding vs. advisory? Whether the IRO decision is binding on the insurer
• Timeliness requirements — how quickly the insurer must respond
• What is reviewable? Medical necessity only, or also benefit coverage disputes

States with Strongest External Appeal Protections

California

• Administered by DMHC and CDI (two separate regulatory bodies)
• Binding IRO decisions
• Standard: 45 days; expedited: 72 hours; immediate: 8 hours for urgent cases
• Reviews both medical necessity AND coverage disputes
• Free to consumers; no filing fee

New York

• Binding external review
• Standard: 30 days; expedited: 72 hours
• Reviews medical necessity, experimental/investigational, and rescission decisions
• Free to consumers
• State maintains list of approved IROs; insurer cannot choose its own reviewer

Illinois

• Binding external review
• Reviews medical necessity and benefit coverage
• Consumer advocate offices assist with appeals at no charge

Massachusetts

• Binding external review through the Health Policy Commission
• Reviews extend to rate disputes and network adequacy in some circumstances

Washington

• Office of the Insurance Commissioner actively investigates denial patterns
• Binding external review with 45-day standard timeline

States with Weakest External Appeal Protections

Some states offer external review that is technically available but practically limited:

• Mississippi: Limited IRO network; average review time exceeds 60 days
• Wyoming: Small regulatory staff; limited enforcement capacity
• Alabama: External review is available but state department has minimal enforcement history

For patients and providers in states with weak external review protections, federal protections under the ACA provide a baseline. If a state's external review process does not meet ACA minimum standards, the federal external review process (administered by URAC-accredited IROs under HHS oversight) applies.

Medicare Advantage Denial Rates by State

Medicare Advantage denial data by state is published by CMS annually. The pattern is different from ACA marketplace data:

Highest MA denial rates (prior authorization, 2023):

1. Florida: 19.8%
2. Texas: 18.9%
3. Nevada: 17.4%
4. California: 16.2%
5. New York: 15.8%

California and New York appear here despite strong ACA marketplace regulation because Medicare Advantage is federally regulated — state consumer protection laws do not apply to the same degree. MA enrollees in all states must use the federal appeals process.

Note on MA appeal rights: Medicare Advantage enrollees have the right to appeal through:

1. Reconsideration by the MA plan
2. Review by the Independent Review Entity (IRE) designated by CMS
3. ALJ hearing (if the amount in dispute exceeds $180 in 2024)
4. Medicare Appeals Council
5. Federal district court

The ALJ success rate of approximately 71% applies in all states regardless of state law.

Medicaid Denial Rates by State

Medicaid denial rate reporting is less standardized than commercial insurance, but the following state-level data is available from Medicaid agency annual reports and CMS CHIP/Medicaid program audits:

Source: CMS Medicaid and CHIP Scorecard; state Medicaid agency annual reports, 2022–2023.

What Providers in High-Denial States Should Do Differently

If your practice is in Texas, Florida, Georgia, or another high-denial state, the following adjustments are supported by the data:

1. Invest more heavily in prior authorization infrastructure. High-denial states have high prior auth denial rates. Practices that build dedicated PA tracking systems — including automated deadline alerts and standardized clinical documentation templates — reduce their denial rates by an average of 25–30% compared to practices without structured PA workflows.

2. Appeal every denial above your break-even threshold. In a state with a 22% denial rate and a 38% external overturn rate, the expected value of appealing is positive for any claim above approximately $300 (assuming $85 in appeal costs and a 50% combined internal/external success rate).

3. Know your state's external appeal deadlines. External appeal filing deadlines are typically 4 months from the date of final internal appeal denial. Missing the external appeal deadline forfeits your right to independent review. Calendar all external appeal deadlines upon receipt of internal appeal denial.

4. File state insurance department complaints strategically. In states with active regulators (California, New York, Illinois), filing a formal complaint with the state insurance department — in addition to or instead of a formal appeal — can accelerate resolution. Some insurers have compliance teams that respond differently to regulatory complaints than to appeal submissions.

5. Document network adequacy issues. In high-denial states with high rates of rural hospital closures and out-of-network billing, document instances where in-network providers were not available. Network adequacy complaints can be filed with state insurance departments and CMS, and have resulted in regulatory enforcement that benefits all providers in a given market.

How ClaimBack Helps Providers in High-Denial States

ClaimBack is particularly valuable for providers in states where denial rates make manual appeal management economically impractical. The combination of high denial volume and high administrative cost per appeal is where automation has the highest return.

ClaimBack generates state-appropriate appeal letters that:

• Reference the correct state external appeal rights and deadlines
• Cite CMS and state-specific coverage policies as applicable
• Address the specific denial reason language used by the insurer in the denial notice

For Medicare Advantage denials (which follow federal rules regardless of state), ClaimBack structures appeals around the CMS Medicare coverage criteria that MA plans are contractually required to follow.

Start your appeal with ClaimBack — free for your first denial.

Related Resources

• Health Insurance Denial Statistics 2025
• Insurance Appeal Success Rates by Insurer (2024–2025)
• The 15 Most Common Reasons Health Insurance Claims Are Denied
• The Real Cost of Denied Claims to Healthcare Providers
• How to Appeal an Insurance Denial
• Medical Necessity Denial Appeal Guide

Sources

1. KFF. "Claims Denials and Appeals in ACA Marketplace Plans: Variation Across States." kff.org, 2024.
2. CMS. Transparency in Coverage Machine-Readable Files, 2023 plan year. cms.gov.
3. CMS. Medicare Advantage Prior Authorization Data by Plan, 2023. cms.gov.
4. California DMHC. Independent Medical Review Annual Report, 2023. dmhc.ca.gov.
5. Texas Department of Insurance. External Review Program Annual Report, 2023. tdi.texas.gov.
6. Florida Office of Insurance Regulation. Market Conduct Annual Report, 2023.
7. New York Department of Financial Services. External Appeal Annual Report, 2023.
8. Massachusetts Health Policy Commission. Annual Report, 2023. mass.gov/hpc.
9. Government Accountability Office. "Medicaid Managed Care: CMS Should Improve Oversight." GAO-23-105512, 2023.
10. HHS. "External Appeals Under the Affordable Care Act." hhs.gov.