TL;DR: Health insurers deny roughly 1 in 5 in-network claims, and injury-related treatment is no exception. The most common reasons include prior authorization issues, medical necessity disputes, and administrative errors. However, fewer than 1% of denied claims are ever appealed, despite the fact that the majority of well-documented appeals succeed. This guide explains the numbers, the reasons behind denials, and exactly what to do if your injury claim is rejected.
Getting injured is difficult enough without having to fight your own insurance company to cover the treatment you need. Yet for millions of Americans, that fight is a routine part of recovery. Whether the injury came from a car accident, a workplace incident, or a slip and fall, the path from treatment to reimbursement is rarely as straightforward as it should be.
According to the Kaiser Family Foundation, insurers participating in ACA Marketplace plans denied 19% of in-network claims in 2024 and 37% of out-of-network claims, for a combined average of 20% of all claims submitted. That means roughly one in five claims is rejected before a single dollar is paid to the provider who delivered care.
For injury victims already managing medical bills, lost wages, and an ongoing personal injury case, a claim denial can create serious financial pressure and delay treatment at a critical stage of recovery. Understanding why denials happen, and what to do when they do, is one of the most practical things a patient or provider can know.
What Percentage of Health Insurance Claims Are Denied?
The denial rate varies significantly depending on the insurer, the type of plan, and the state. However, the national picture is clear enough to be concerning.
Overall Denial Rates
Insurers reported receiving about 496 million claims in 2024, with 91% filed for in-network services. Of these in-network claims, approximately 85 million were ultimately denied, resulting in an average in-network denial rate of 19%.
Insurer denial rates for in-network claims varied widely in 2024, ranging from 3% to 36%, with significant variation by insurer and by state. That range illustrates just how much the experience of a denied claim depends on which insurer a patient is covered by, not just the nature of the treatment itself.
Denial Rates by Payer Type
Not all payers deny claims at the same rate. A 2024 survey of hospitals, health systems and post-acute care providers conducted by Premier Inc. found that nearly 15% of medical claims submitted to private payers were initially denied. The rate was similar for Medicare Advantage at 15.7% and Managed Medicaid at 15.1%, while traditional Medicare had the lowest percentage at 8.4%.
Private payers consistently deny claims at higher rates than public programs. Furthermore, for injury victims who receive treatment under a Letter of Protection while a personal injury case is pending, those claims may not go through standard insurance channels at all, which creates a separate set of documentation and reimbursement considerations that providers need to manage carefully.
How Often Do Patients Appeal?
This is where the numbers become particularly striking. Consumers rarely appeal denied claims. Fewer than 1% of denied claims were appealed, and when they do appeal, insurers upheld their original decision in 66% of cases at the internal review level.
However, internal appeals are only one layer of the process. According to the American Medical Association, 83.2% of prior authorization appeals resulted in the insurer partially or fully overturning the initial denial in 2022. The gap between how often patients appeal and how often they would succeed if they did is one of the most significant problems in the current claims environment.
Why Are Injury Treatment Claims Denied?
Understanding the specific reasons behind a denial is the first step toward resolving it. Denials rarely happen because a treatment is genuinely inappropriate. More often, they reflect administrative, procedural, or documentation issues that can be addressed.
Lack of Prior Authorization
Many insurance plans require providers to obtain approval before delivering certain treatments, a process called prior authorization. This is especially common for imaging like MRIs, specialist referrals, physical therapy beyond a certain number of sessions, and surgical procedures. For injury victims who need urgent care, the prior authorization requirement can delay or block treatment that is clearly necessary.
67% of physicians report that prior authorization has led to serious adverse events for patients, and the average practice spends 14 hours per week on prior authorization issues. When an injury is acute and treatment cannot wait, those delays carry real consequences for recovery outcomes.
Medical Necessity Disputes
Even when prior authorization is obtained, insurers may still deny payment on the grounds that a treatment was not medically necessary. This determination is made by the insurer’s own reviewers, who may not have the same specialty background as the treating physician and who are working from general coverage criteria rather than the specific circumstances of the patient’s injury.
In personal injury cases specifically, insurers sometimes dispute whether ongoing treatment is tied to the accident or whether the level of care is appropriate for the documented injuries. Consequently, detailed and consistent documentation from treating providers is essential not only for clinical purposes but also for defending the claim against medical necessity challenges.
Administrative and Coding Errors
A significant portion of denials have nothing to do with the clinical justification for treatment. Three in four denials, or 77%, stem from paperwork or plan design rather than medical judgment. Common administrative causes include incorrect billing codes, mismatched patient information, missing referral documentation, and claims submitted to the wrong payer.
For injury victims with multiple active insurance policies, including health insurance, auto insurance PIP coverage, and a potential Letter of Protection arrangement with a provider, the question of which payer should receive the claim first adds another layer of complexity where errors are easy to make.
Out-of-Network Treatment
When an injury requires emergency treatment or specialized care that is not available within a patient’s insurance network, the claim may be denied or reimbursed at a significantly lower rate. Out-of-network denial rates are considerably higher than in-network rates. Out-of-network claims carried an overall denial rate of 37% in 2024, compared to 19% for in-network claims.
For accident victims who received emergency care at the nearest available facility rather than an in-network provider, this distinction can result in significant out-of-pocket exposure that needs to be addressed either through the appeals process or through the personal injury settlement.
Coverage Exclusions and Policy Limits
Some denials occur because the specific treatment falls outside the patient’s plan coverage, or because a coverage limit has been reached. Certain plans exclude treatment for injuries that occurred in the course of employment, since those claims belong under workers’ compensation.
Others cap the number of physical therapy sessions covered per year, leaving injury victims who require extended rehabilitation to manage remaining costs through other means.
Understanding the specific terms of a patient’s policy is important for both providers and attorneys when determining how to structure billing and what to expect in terms of coverage. Furthermore, in a personal injury case, coverage limits and exclusions directly affect which costs will ultimately need to come out of the settlement.
What to Do When an Injury Claim Is Denied
A denial is not a final answer. It is the beginning of a process that, when pursued correctly, produces a reversal in the majority of cases. Here is what to do at each stage.
Step 1: Get the Denial in Writing and Understand the Reason
The insurer is required to provide a written explanation of any denial, including the specific reason and the applicable policy language. This document, often called an Explanation of Benefits or a denial letter, is the starting point for any appeal.
Before taking further action, read it carefully to understand whether the denial is based on a clinical determination, an administrative issue, a coverage exclusion, or a procedural requirement like a missing prior authorization.
The reason matters because it determines the strategy for challenging the denial. An administrative error is resolved differently than a medical necessity dispute.
Step 2: Contact the Provider’s Billing Department
In many cases, especially when the denial is administrative, the provider’s billing team can resolve the issue by correcting a code, resubmitting with additional documentation, or contacting the insurer directly. This is often the fastest path to resolution and should be the first call after receiving a denial notice.
For injury victims whose treatment is being managed through a personal injury case, coordinating with both the provider and the attorney at this stage helps ensure that the denial is addressed in a way that does not create problems for the claim downstream.
Step 3: File an Internal Appeal
Every insurer is required to have an internal appeals process. Under the Affordable Care Act, patients have up to 180 days from the date of denial to file an internal appeal. The insurer must respond within 15 days if the appeal relates to prior authorization for a treatment, and within 30 days for medical services already received.
A strong internal appeal includes a letter from the treating physician explaining the clinical rationale for the treatment, relevant medical records supporting the injury and the treatment plan, references to clinical guidelines that support the chosen approach, and a direct response to the specific reason cited in the denial.
Step 4: Request a Peer-to-Peer Review
A peer-to-peer review is a conversation between the treating physician and the insurer’s medical reviewer. This step is often more effective than a written appeal for disputes rooted in medical necessity, because it allows the treating physician to explain the patient’s specific circumstances directly rather than through paperwork alone.
Peer-to-peer reviews have success rates of 58% to 65% for overturning denials on their own, and they typically resolve faster than written appeals.
Not all insurers proactively offer this option, but physicians and providers can request it, and doing so promptly after a denial can shorten the resolution timeline considerably.
Step 5: Request an External Review
If the internal appeal is unsuccessful, patients have the right to request an external review by an independent organization that is not affiliated with the insurer.
Under federal law, this process is available at no cost to the patient and applies to any denial involving medical judgment. External reviews overturn about 40% of insurance denials that reach that stage.
External review requests must generally be filed within 60 days of receiving the final internal appeal decision, though timelines vary by state. For urgent situations, an expedited external review can be requested simultaneously with the internal appeal.
Step 6: File a Complaint With the State Insurance Commissioner
If the insurer is acting in bad faith, repeatedly delaying responses, or failing to follow its own procedures, filing a formal complaint with the state insurance commissioner puts the behavior on record and often accelerates a resolution. State insurance departments have enforcement authority over licensed insurers, and a documented complaint creates pressure that a letter alone does not.
How This Affects Personal Injury Cases
For plaintiffs in personal injury cases, insurance denials for injury treatment have consequences that extend beyond the immediate billing dispute. When a claim is denied and the plaintiff cannot afford to pay out of pocket, treatment may be delayed or discontinued, which affects both recovery outcomes and the strength of the case itself.
Gaps in treatment history are one of the most common arguments used by defense attorneys and insurance companies to minimize settlement values. Ttreatment gaps also delay the point at which a plaintiff can reach maximum medical improvement, which in turn delays the entire settlement timeline.
Additionally, denied claims that are later paid through the settlement process, rather than by insurance, affect how medical bills are handled after a settlement and how much of the plaintiff’s recovery is consumed by outstanding balances.
Furthermore, when providers treat patients under a Letter of Protection, as is common in personal injury cases, the lien management process becomes especially important for ensuring providers are ultimately paid and that disbursement proceeds cleanly.
How Gain Supports Providers Navigating Claim Denials
For healthcare providers treating personal injury patients, claim denials are a recurring operational challenge that affects revenue, cash flow, and the ability to continue accepting patients who cannot pay upfront.
Gain’s platform supports providers by centralizing case documentation and financial tracking for PI patients, making it easier to maintain the organized records that strengthen both insurance appeals and lien-backed billing arrangements. When treatment is documented consistently and billing information is current and accurate, the rate of administrative denials decreases and the evidence available to support medical necessity appeals improves.
For providers working within the personal injury ecosystem, that kind of systematic organization is not just a billing convenience. It directly affects the financial outcomes of cases and the ability to provide continuous care to patients who need it. To learn more about how Gain supports healthcare providers managing PI cases, visit our platform page or contact our team.
Frequently Asked Questions
Does health insurance have to cover treatment for injuries caused by someone else’s negligence?
Generally yes, your health insurance is obligated to cover medically necessary treatment regardless of how the injury occurred. However, if another party’s liability insurance is available, your health insurer may have subrogation rights to seek reimbursement from any settlement you receive. The interaction between health coverage and liability coverage is one of the more complex parts of the PI claims process.
Can a provider appeal a denial on behalf of a patient?
Yes. In most cases, providers can file an appeal directly with the insurer on the patient’s behalf, particularly when the denial involves medical necessity or coding issues. Providers often have dedicated billing staff or revenue cycle teams who handle this regularly and are more familiar with the documentation and language that appeals require.
What if my injury happened in a car accident and I have both health insurance and auto insurance PIP coverage?
The coordination of benefits between health insurance and auto insurance PIP coverage depends on state law and the specific terms of each policy. In some states, PIP coverage is primary and must be exhausted before health insurance is billed. In others, health insurance is billed first. Getting this sequencing wrong is a common source of denials, and resolving it requires understanding which payer is primary under your state’s rules.
How long does an appeal typically take to resolve?
For urgent situations, an expedited internal appeal must be decided within 72 hours. For non-urgent prior authorization appeals, the insurer has up to 30 days. For appeals of services already received, the timeline is up to 60 days. External reviews add additional time, though expedited external reviews for urgent cases can be decided within 72 hours as well.