Grievance vs. IMR vs. Lawsuit: What Should You File After a California Health Insurance Denial?

Legally reviewed By Scott Glovsky in Insurance and Healthcare Denials

When you have a problem with your health insurance company, knowing what to file is not always straightforward. You may be told to file a grievance, appeal a denial, request an Independent Medical Review (IMR), or consider legal action. To make matters more confusing, health plans do not always use “grievance” and “appeal” in exactly the same way.

That distinction matters. A grievance does not necessarily begin with a denied claim. You might have a problem because your health plan is not making a decision, you are dissatisfied with the care you received, or you cannot get an issue resolved. An appeal more commonly involves challenging a decision the health plan has already made.

Before deciding among your health insurance appeal options, it helps to know what each process is intended to accomplish, how your particular health plan defines it, and what you are asking the insurer to do.

What Do Grievance, Appeal, IMR, and Lawsuit Mean?

California regulators recognize that some of these terms overlap. The California Department of Managed Health Care (DMHC), for example, notes that an appeal may also be referred to as a complaint or a grievance. Your health plan may use more specific definitions.

Here is a useful starting point:

• Grievance. A grievance is a formal request for your health plan to address a problem or dissatisfaction, and it does not necessarily require a denial. It may involve access to care, delays, quality-of-care concerns, problems with a provider, or another issue with the plan.
• Appeal. An appeal is a request asking your health plan to reconsider a decision it has already made, such as denying treatment or another covered benefit.
• Independent Medical Review. An IMR is an external review available for certain medical disputes. Independent medical professionals, rather than the health plan, review the medical decision.
• Lawsuit. A lawsuit is a legal action that may be available when circumstances support a claim against an insurer or health plan. A lawsuit is different from the administrative processes used to resolve grievances, appeals, and IMRs.

These definitions provide a starting point, but the terminology used by your particular health plan matters. Review your Evidence of Coverage, sometimes called your Member Handbook or Policy Details, to understand how these terms are defined in your specific plan.

What Is the Difference Between a Grievance and an Appeal?

The terms “grievance” and “appeal” can be confusing because California health plans do not always use them in exactly the same way. A grievance can broadly refer to a formal complaint or request for a health plan to resolve a problem. You may file a grievance even when you have not received a coverage denial. For example, you might have a problem getting a timely decision from your health plan or have concerns about the care or service you received.

An appeal more commonly refers to asking a health plan to reconsider a decision, such as a denial of treatment or another benefit. However, some health plans treat an appeal as a type of grievance or use the terms together. That makes it important to review your plan’s specifics rather than assume the terminology means the same thing across insurers.

Why Does Your Health Plan’s Terminology Matter?

California insurers provide a good example of why you should not assume every company uses grievance and appeal identically.

For example:

• Anthem Blue Cross broadly defines a grievance as an expression of dissatisfaction, including a complaint, dispute, request for reconsideration, or appeal. Anthem also describes its formal process as a “grievance/appeal” process.
• Health Net provides a clearer distinction for its California commercial members. It directs members to file an appeal for the denial of a service or benefit and a grievance when they want to formally express dissatisfaction with care or services.
• Blue Shield of California also provides grievance and appeal procedures for members, so it is important to check the materials for your specific plan and coverage.

The practical lesson is simple: Be specific when you contact your health plan. If you want to file a grievance, say, “I want to file a grievance.” If you are appealing a denial, tell the representative that you want to appeal the denial. Simply saying that you are unhappy or calling to complain may not clearly communicate that you are trying to initiate a formal review process.

Ask the representative to confirm how your request will be classified, what steps you need to complete, and whether there is a case or reference number you should keep. Knowing how the health plan is handling your request can be important if the problem persists or you later need to pursue a review outside the plan.

If You Received a Denial, Start by Reviewing the Reason

When your health plan has already denied treatment or another benefit, your denial letter becomes an important part of deciding what to do next.

Some denials involve questions about whether treatment is medically necessary. Others involve prior authorization requirements, experimental or investigational exclusions, out-of-network care, or plan benefit limitations.

Read the insurer’s stated reason carefully. The letter may identify medical policies, clinical criteria, or provisions of your plan that influenced the decision. It should also provide information about your appeal rights.

If the denial relies on a medical policy, ask your insurer what the criteria for coverage is. Also consider asking your treating physician to review it. A policy may not account for your individual medical circumstances or the most current standards of care. Your physician may also be able to provide additional records or explain why the requested treatment is appropriate for you.

When Should You Appeal a Health Insurance Denial?

If your health plan has denied a treatment, service, or benefit, an appeal generally asks the plan to reconsider that decision.

A strong appeal should address the reason the insurer gave for denying coverage rather than simply restating that you disagree. Depending on the denial, that may involve additional medical records, information from your treating physician, or evidence addressing the medical policy or coverage provision the insurer relied on.

Your denial letter and plan documents should explain the procedure and deadline for appealing. Follow those instructions carefully and keep copies of what you submit.

The terminology may differ among insurers, but the goal is clear: If you are challenging a health insurance denial, make sure the health plan knows that you are asking it to reconsider that specific coverage decision.

When Does an Independent Medical Review Make Sense?

An Independent Medical Review is different from an internal appeal because the disputed medical decision is reviewed outside the health plan. In fact, sometimes an IMR is referred to as an external review.

California has IMR programs administered through the DMHC and California Department of Insurance (CDI), depending on which agency regulates your specific plan. IMRs are available for certain disputes involving medical necessity, experimental or investigational treatment, and some emergency or urgent medical services.

An IMR is not available for every insurance dispute. For example, a disagreement involving the interpretation of policy language or whether a benefit is covered under the contract may raise different issues.

In many cases, you must first complete the applicable internal appeal or grievance process before requesting an IMR. There are exceptions and different procedures for urgent circumstances, so it is important to determine which rules apply to your plan and situation.

When comparing a grievance vs. IMR, it is therefore important not to think of them simply as competing choices. They serve different purposes and may occur at different stages of resolving the problem.

When Might a Lawsuit Become an Option?

A lawsuit is not simply the next level of appeal after an unsuccessful IMR.

Legal action serves a different purpose and may involve issues that cannot be resolved through an administrative medical review. For example, a case may raise questions about whether an insurer acted unreasonably or in bad faith, failed to meet its contractual obligations, or caused harm through the way it handled a claim.

The type of health plan is particularly important here. If you have a private employer-sponsored plan governed by ERISA, federal law generally requires participants to exhaust the plan’s administrative remedies before filing suit over a denied benefit. Other plans including non-ERISA plans may be governed by different requirements.

There can also be strategic considerations surrounding an IMR and potential litigation. If you are trying to determine when to sue a health insurance company, it may make sense to obtain legal advice before assuming you must complete every possible review process first. Another reason to get legal advice is that it is very difficult to overturn an IMR decision.

How Do You Know What to File?

Start by identifying the problem you are trying to solve.

If you are dissatisfied with your health plan, a provider, access to care, or the handling of an issue that has not necessarily resulted in a denial, you may need to use your plan’s grievance process.

If the insurer denied treatment or another benefit and you want it to reconsider that decision, look at the appeal instructions accompanying the denial.

If you have completed the applicable internal process and the dispute involves a qualifying medical decision denial, an IMR may provide an opportunity for independent medical professionals to review the insurer’s decision.

If the dispute raises broader legal issues, has caused significant harm, or you are concerned that proceeding with another review could affect your rights, it may be appropriate to discuss the situation with an attorney.

The labels matter, but so does the sequence. Knowing what problem you are trying to resolve, what your health plan calls the applicable process, and what you want the insurer to do can help you determine your next step.

Get Help Evaluating Your Options After a California Health Insurance Problem

By the time a health insurance dispute becomes serious, you may already have spent considerable time calling the insurer, speaking with your doctor, submitting records, or trying to determine which review process applies. Choosing the wrong process can create additional delay when your medical care may already be on hold.

At the Law Offices of Scott Glovsky, we have spent decades helping Californians challenge health insurance denials and evaluate the options available under their particular health plans. If you are unsure whether you should file an appeal, pursue an Independent Medical Review, or consider legal action, contact us online or call 626-243-5598 to discuss your situation.

Legal References Used to Inform This Page

To ensure the accuracy and clarity of this page, we referenced official legal resources during the content development process:

• Independent Medical Review (IMR)
• California Department of Managed Health Care (DMHC)
• Blue Shield California 
• California Department of Insurance 
• Anthem Blue Cross
• Health Net