Internal Appeal vs. External Review — What Is the Difference?

| Internal appeals go back to your insurer. External review goes to an independent third party with binding authority.

Two Different Processes — One Goal

Internal appeal and external review are the two formal paths available after a health insurance denial. The internal appeal goes back to your insurer — the external independent review goes to a third party with no financial relationship to your plan. Understanding the difference determines how you use each one and in what order.

Understanding the difference between the two, and when to use each, is essential to making the most of your appeal rights.

Internal Appeal — What It Is

An internal appeal is a formal review conducted by your insurance company. A different reviewer than the one who issued the original denial reviews your case and all supporting documentation.

Who reviews it

A senior claims reviewer or a medical director at the insurance company. For clinical denials, a physician reviewer must be involved.

How long it takes 30 days for pre-service appeals.

60 days for post-service appeals. 72 hours for urgent care.

How many levels Most plans offer two levels of internal review —

A first-level appeal and a second-level appeal before external review is available.

The limitation

The reviewer is employed by or contracted with the insurer. Even though they are required to be independent of the original decision-maker, they remain within the insurer's structure.

External Review — What It Is

External review is a review by an Independent ReviewOrganization (IRO) — a company that has no financial relationship with your insurer. For all ACA-compliant plans and most employer-sponsored plans,external review is a legal right, not a courtesy.

The external reviewer's decision is typically binding on the insurer.

Who reviews it

An independent physician reviewer at anIRO with no connection to your insurance company.

How long it takes

45 days standard. 72 hours for urgentor expedited requests.

When it is available

After internal appeals are exhausted. Some states allow external review directly after the first internal denial for certain types of cases.

The power

External review decisions are typically final and binding on the insurer. If the external reviewer overturns the denial, the insurer must pay.

When to Use Each

Always exhaust internal appeals first

External review is generally available only after internal appeals have been completed. File your internal appeal first — and include every piece of supporting documentation, because the internal record typically forms the basis for external review.

Request external review when clinical judgment is the issue

External review is specifically designed for cases where the dispute is clinical — whether a service was medically necessary, whether a treatment was experimental, or whether a clinical coverage criterion was correctly applied.

File for external review promptly after an internaldenial

You typically have 60 days after the final internal denial to request external review. Do not wait.

ERISA Plans — An Important Note

For employer-sponsored ERISA plans, external review rights are governed by federal law. Some ERISA plans have more limited external review rights than state-regulated plans. Review your plan documents carefully or consult an ERISA attorney for complex cases.

How ClaimCompass Helps

ClaimCompass generates formally written internal appeal letters and external review request letters for every level of your appeal.

Upload your denial for a free analysis. For Medicare denials, see Medicare Advantage vs. Original Medicare.

Frequently Asked Questions

[H3] Can I skip internal appeals and go straight to external review?

Generally no — external review is only available after internal remedies are exhausted. Some states allow limited exceptions for urgent care situations.

What happens if external review upholds the denial?

In most cases this ends the administrative appeal process. You may have the right to file suit in court, particularly for ERISA plans. Consult an attorney if the amount at stake justifies litigation.

Does external review cost anything?

For ACA-compliant plans, external review is free to the consumer. The insurer pays the IRO's fee.For ACA-compliant plans, external review is free to the consumer. The insurer pays the IRO's fee.