- Adverse Benefit Determination
- A health plan’s decision to deny, reduce, or terminate a benefit — or to deny payment — in whole or in part. It is the formal event that starts your right to appeal, and the plan must tell you why and how to appeal.
- Affordable Care Act (ACA)
- The 2010 federal health-reform law. Its internal-appeal and external-review requirements (45 CFR 147.136) give members of non-grandfathered plans a consistent, nationwide right to challenge denials.
- Appeal
- A formal request asking your health plan (or an independent reviewer) to reconsider a denial. Federal rules give most plan members a right to a full and fair internal appeal, followed by an independent external review.
- Balance Billing
- When an out-of-network provider bills you for the difference between their charge and what your plan paid. The federal No Surprises Act bars most balance billing for emergency care and for many services at in-network facilities.
- Claim Denial (Denial)
- A plan’s refusal to pay for a service or item. Denials are commonly based on medical necessity, lack of prior authorization, out-of-network status, or a coding/eligibility issue — and most can be appealed.
- Coinsurance
- Your share of the cost of a covered service, calculated as a percentage of the allowed amount (for example, 20%), which you pay after meeting your deductible.
- Coordination of Benefits (COB)
- The rules that decide which plan pays first when you are covered by more than one health plan, so the combined payment does not exceed the total cost of care.
- Copayment (Copay)
- A fixed dollar amount you pay for a covered service (for example, for an office visit or prescription), usually due at the time of care.
- Coverage Determination
- A plan’s decision about whether a specific service, drug, or item is covered and on what terms. An unfavorable coverage determination is an adverse benefit determination you can appeal.
- Deductible
- The amount you must pay out of pocket for covered services each plan year before your plan begins to pay its share.
- ERISA
- The federal Employee Retirement Income Security Act, which governs most employer-sponsored health plans and sets the claims-and-appeals rules (29 CFR 2560.503-1) enforced by the U.S. Department of Labor.
- Expedited Appeal (Urgent Appeal)
- A faster appeal available when waiting for a standard decision could seriously jeopardize your health or ability to regain function. Urgent determinations are generally made within 72 hours, and an expedited external review can run at the same time as the internal appeal.
- Experimental or Investigational
- A label insurers use to deny treatments they consider unproven. External reviewers frequently overturn these denials when peer-reviewed evidence and accepted medical standards support the treatment for your condition.
- Explanation of Benefits (EOB)
- A statement from your plan (not a bill) showing what was billed, what the plan allowed, what it paid, and what you may owe. An EOB that shows a denial explains the reason and your appeal rights.
- External Review (Independent Review)
- An independent review of a denial by a reviewer with no ties to your insurer. Under federal law, after a final internal denial you generally have up to four months to request one, and the reviewer’s decision is binding on the plan.
- Formulary
- The list of prescription drugs a plan covers, usually organized into cost tiers. A drug’s tier affects your cost, and non-formulary drugs may require an exception request.
- Formulary Exception
- A request asking your plan to cover a drug that is not on its formulary (or to cover it at a lower cost tier) because a covered alternative would be ineffective or harmful for you. It is supported by your prescriber’s statement.
- Grandfathered Plan
- A health plan that existed on March 23, 2010 and has not changed significantly since. Some ACA protections — including certain appeal and external-review rules — apply differently to these plans.
- Independent Review Organization (IRO)
- An accredited, independent entity that conducts external reviews of denials. IROs assign qualified clinical reviewers and issue a decision the plan must honor.
- Internal Appeal
- The first level of appeal, made directly to your health plan, asking it to reconsider a denial. Federal rules require most non-grandfathered plans to give you at least 180 days from the denial notice to file.
- Letter of Medical Necessity (LMN)
- A statement from your treating provider explaining why a service or item is medically necessary for you, citing your diagnosis, history, prior treatments, and supporting clinical evidence or guidelines.
- Medical Necessity
- The standard that a service is appropriate, consistent with accepted medical practice, and needed to diagnose or treat your condition. "Not medically necessary" is one of the most common — and most appealable — denial reasons.
- Mental Health Parity (MHPAEA)
- The federal Mental Health Parity and Addiction Equity Act, which requires plans to cover mental-health and substance-use treatment no more restrictively than comparable medical and surgical care. Parity violations are a strong basis for appeal.
- Network (In-Network / Out-of-Network)
- The set of providers and facilities that contract with your plan (in-network) versus those that do not (out-of-network). Out-of-network care usually costs more and is a frequent basis for denials.
- No Surprises Act
- A federal law effective in 2022 that protects patients from many surprise out-of-network bills, including for emergency services and for certain care delivered at in-network facilities.
- Out-of-Pocket Maximum
- The most you have to pay for covered, in-network services in a plan year. After you reach it, the plan pays 100% of covered essential benefits for the rest of the year.
- Peer-to-Peer Review
- A phone discussion between your treating provider and the insurer’s reviewing physician about a denial. It can resolve a denial before, or alongside, a written appeal.
- Preauthorization (Prior Authorization / Precertification)
- A requirement that your plan approve a service, drug, or procedure before you receive it. A denied or missing prior authorization is one of the most common reasons claims are refused.
- Prudent Layperson Standard
- A rule requiring plans to cover emergency care based on the symptoms that would lead a reasonable non-expert to seek emergency treatment — not on the final diagnosis. It protects patients whose ER visit turns out to be non-emergent.
- Retrospective Review
- A plan’s review of the medical necessity or appropriateness of care after it has already been provided, which can result in a post-service denial you can appeal.
- Self-Funded Plan (Self-Insured)
- An employer-sponsored plan in which the employer pays claims directly rather than buying insurance. These plans are governed mainly by the federal ERISA law and the U.S. Department of Labor rather than state insurance departments.
- Step Therapy (Fail-First)
- A requirement to try (and fail on) one or more lower-cost treatments before the plan will cover the one your provider originally prescribed. A step-therapy exception can be requested when the required drug is inappropriate for you.
- Summary of Benefits and Coverage (SBC)
- A standardized, plain-language document that summarizes what a plan covers and what it costs. It is a useful reference when arguing that a denied service falls within your covered benefits.
- Utilization Review (Utilization Management)
- The process insurers use to evaluate whether care is medically necessary and appropriate — before (prospective), during (concurrent), or after (retrospective) treatment. Denials from utilization review are appealable.