Getting a letter that says Medicare or a Medicare Advantage plan will not pay for a treatment, test, or stay can feel like a final answer. It is not. Every kind of Medicare denial comes with a formal right to appeal, and the government’s own data on how often those appeals succeed suggests that giving up after the first no is often the more costly choice.
The Five Levels of the Medicare Appeals Process
Medicare’s appeals system has five potential levels, though most disputes never need to go past the first one or two. Level one is a redetermination by the same Medicare Administrative Contractor, Medicare Advantage plan, or Part D plan that issued the original denial. Level two moves the case to an independent reviewer with no connection to the plan that denied the claim. Level three, reserved for cases meeting a minimum dollar threshold, goes before the Office of Medicare Hearings and Appeals for a hearing, often by phone, in front of an administrative law judge. Level four is a review by the Medicare Appeals Council, and level five, available only for larger-dollar disputes, is review in federal district court.
According to Medicare’s overview of claims and appeals, each level comes with a written decision and a deadline, typically 60 or 120 days depending on the level and type of claim, for filing the next appeal if the prior one does not resolve the issue. The process differs slightly depending on whether the original claim was billed under Original Medicare, a Medicare Advantage plan, or a Part D drug plan, but the same basic five-tier structure applies across all three. A Medicare Advantage denial, for instance, starts with an internal appeal to the plan itself, while an Original Medicare claim denial starts with a redetermination request sent to the contractor that processed the original bill.
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What the Data Shows About Appeal Success
According to a KFF analysis of federal Medicare Advantage prior authorization data, roughly four out of five prior authorization denials that were appealed in 2024 were fully or partially overturned, continuing a pattern that has held in each year from 2019 through 2024. The same analysis found that only a small share of denied requests, around one in nine, were ever appealed in the first place, meaning most denials that could have been challenged successfully were simply accepted instead.
That gap between how often appeals succeed and how rarely they get filed is the core reason Medicare’s own guidance and consumer advocates alike encourage beneficiaries to treat a denial as the start of a process rather than the end of one. A denial that reflects a coding error, a missing piece of documentation, or a plan’s overly narrow reading of medical necessity criteria is often reversible once a reviewer, especially an independent one at level two or an administrative law judge at level three, takes a fresh look.
Building a Stronger Case at Each Level
An appeal is generally stronger when it includes a letter of medical necessity from the treating physician, copies of relevant medical records, and a clear statement of why the denial reason does not apply to the specific facts of the case. For Part D drug denials, this often means the prescribing doctor submitting a supporting statement explaining why a specific medication, rather than a formulary alternative, is medically necessary.
Deadlines matter as much as documentation. Missing the window to file the next level of appeal, which can be as short as 60 days after a decision letter, closes off that path even when the underlying medical argument is strong. Beneficiaries or their authorized representatives, including family members with the right paperwork on file, can request expedited appeals when a delay in a decision could seriously jeopardize health, which triggers a faster timeline than the standard process. A treating physician’s written support for an expedited request often speeds that determination further, since reviewers weigh clinical urgency heavily when deciding how quickly to respond.
Filing the First Appeal
The starting point for any appeal is the denial notice itself, which is required to explain the reason for the denial and the specific steps for requesting a redetermination. Medicare’s official appeals guidance walks through the forms and contact information for each level, and the same starting point applies whether the denial came from Original Medicare directly or from a private Medicare Advantage or Part D plan administering Medicare benefits.
Given how often a first denial gets reversed once challenged, treating that initial letter as a prompt to gather documentation and file, rather than as a closed door, lines up with what the government’s own appeals data actually shows. State Health Insurance Assistance Programs, staffed by trained counselors and free to use, can also help a beneficiary assemble a first-level appeal correctly the first time, which matters most at the stage where the largest share of successful reversals already happen.
This article was produced with AI assistance and reviewed by The Financial Wire editorial team.
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Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
