Insurance appeal glossary

The terms on your denial letter, in plain English.

Explanation of Benefits (EOB)

The notice from your insurer showing what was billed, what they paid, and what you owe. An EOB is not a bill — but it's where a denial and its reason appear.

Denial vs. rejection

A rejected claim had an error (e.g., a typo) and the provider can fix and resubmit it. A denied claim was processed and refused — that's what you appeal.

Prior authorization (PA)

Advance approval the insurer requires before certain care. A prior-auth denial happens before treatment.

Medical necessity

The standard that care is appropriate for your condition. A "not medically necessary" denial is the most common — and is appealed with clinical evidence and the insurer's own criteria.

Step therapy ("fail first")

A rule requiring you to try cheaper treatments before the one prescribed. See step-therapy denials.

Formulary

The list of drugs your plan covers, by tier. A drug that's off-formulary may need a formulary-exception request.

Letter of medical necessity (LOMN)

A letter from your treating physician explaining why a specific treatment is needed for your specific condition — often the single most persuasive document in an appeal.

Internal appeal

Your formal request asking the insurer to reconsider. The required first step. See internal vs. external review.

External review

An independent review after an internal appeal is denied. The reviewer's decision is binding on the insurer.

Independent Review Organization (IRO)

The neutral third party that conducts the external review.

Peer-to-peer review

A call where your doctor argues the case directly with the insurer's medical reviewer — often available during a prior-auth appeal.

Expedited (urgent) appeal

A faster track when delay would seriously jeopardize your health — often decided within 72 hours.

Grievance

A complaint about service or quality (vs. an appeal, which contests a coverage decision).

ERISA

The federal law governing self-funded employer health plans. ERISA plans follow federal appeal rules rather than state ones — which changes your options. See appeal rights by state.

No Surprises Act

Federal law (effective 2022) that protects you from most surprise out-of-network bills for emergencies and certain in-network-facility care.

CARC / RARC codes

The claim-adjustment and remark codes on an EOB that encode the denial reason (e.g., CO-50 = not deemed medically necessary).

CPT and ICD-10 codes

CPT identifies the procedure; ICD-10 identifies the diagnosis. A mismatch is a common, easily-fixed coding-error denial.

Consumer Assistance Program (CAP)

A free state program that helps you understand and file appeals. Availability varies — see your state page.