Los Angeles Medical Necessity Denial Appeals Process for Non-ERISA Policies

A plan is not governed by ERISA if it is an individual or family plan, one bought directly from an insurance company for an individual or bought through a state insurance marketplace exchange, or a group employment health plan purchased for a state or municipal employee or employee of a religious organization. If your plan is in fact governed by ERISA, you can learn more about the medical necessity denial appeal process here.

If your physician ordered a specific test or treatment for your medical condition and you received a denial letter from your insurance company, you are probably wondering what options you have. An experienced attorney can help you understand and navigate the Los Angeles medical necessity denial appeal process for non-ERISA policies so that you can get the coverage you need.

What is a Medical Necessity Denial?

At its core, a denial is simply a contract dispute. Someone believed their insurance would cover a certain test or treatment but the carrier denied they had a contractual obligation to do so. This makes the appeals process two-pronged. First, it should be based on the reason they are denying the coverage. Second, it should also cover the provisions in the insurance policy.

A Policyholder’s Right to Appeal

For non-ERISA policies, policyholders have the right to appeal their health insurance plan decisions under the Affordable Care Act (ACA) and California law. However, they must follow the process set by the insurance carrier for appeals. In some plans, this can involve multiple appeals.

The Los Angeles medical necessity denial appeals process for non-ERISA policies can be time-consuming and cumbersome. Therefore, many who are denied health insurance coverage turn to the services of an experienced health insurance lawyer to help them win their appeals.

Non-ERISA Appeals Process

The Los Angeles medical necessity denial appeals process for non-ERISA policies begins with the patient receiving a denial letter. In this letter, the insurance carrier must tell them:

• Their reasons for denial
• That the person has a right to an appeal and how to submit one
• The deadline to appeal
• About any Consumer Assistance Programs in the state that help with medical necessity claim denial appeals

Then, the patient or their attorney can request the support of the physician who ordered the test or treatment. A written letter stating the medical reasons the claim should be approved is usually best. They should provide the insurance carrier with treatment notes and medical records, including any test results. It is also recommended that the patient submits current medical literature or peer-reviewed articles that uphold the effectiveness of any claims involving investigational or experimental services.

Finally, a personal narrative can be quite effective in an appeal. The narrative should describe the need for the requested service. It can be written by the patient, their attorney, or another authorized representative. All this information should be mailed certified with delivery receipt to ensure the carrier receives it on time.

Secondary Appeals and External Reviews

If the insurance company still denies the claim, the policyholder has the right to a second appeal. This means their file will be reviewed by a medical director from their insurance company. Other levels of appeals may be necessary if the treatment the patient’s doctor recommends is considered investigational or experimental.

Under Federal Code § 2560.503-1, a person cannot be forced to submit more than two appeals prior to filing a lawsuit against a health insurance carrier. In addition, a carrier cannot charge someone to file an appeal.

Furthermore, the policyholder has the right to an independent external review for a claim. These reviews use the opinions of a board-certified physician in the same specialty as the patient’s physician and an independent third-party reviewer.

Value of a Los Angeles Medical Necessity Denial Appeals Attorney

Your final option is to file a claim in court. Having an experienced attorney can help increase the chances that your appeal will be granted. They can advocate on your behalf to get the coverage you need. A knowledgeable attorney knows how to make the Los Angeles Medical necessity denial appeals process for non-ERISA policies easier and less time-consuming on policyholders. Contact us today for a free consultation.

FAQ

My doctor ordered this treatment — why can an insurance company still deny it?

Insurance companies make their own determinations of “medical necessity” using internal guidelines that may differ from what your physician believes is appropriate for your condition. These guidelines are not always aligned with accepted clinical standards, and insurers sometimes use them to deny care that is clearly warranted. When a denial contradicts your doctor’s medical judgment, it is worth challenging — especially under a non-ERISA policy, where California law gives you meaningful tools to fight back.

How is a non-ERISA appeal different from what an ERISA policyholder can do?

The difference is significant. ERISA plans are governed by federal law, which limits your legal remedies and generally caps what you can recover to the cost of the denied benefit itself. Non-ERISA plans are subject to California state law, which allows policyholders to pursue claims for bad faith, emotional distress damages, and potentially punitive damages if the insurer acted unreasonably. This makes the stakes — and the leverage — considerably higher for non-ERISA policyholders.

What is an Independent Medical Review, and when should I request one?

An Independent Medical Review (IMR) is a free review conducted by a licensed, independent medical professional — completely separate from your insurance company — who evaluates whether the denial was clinically justified. In California, non-ERISA policyholders can request an IMR through the Department of Managed Health Care (DMHC) or the California Department of Insurance (CDI) after exhausting the internal appeal process. If the IMR overturns the denial, your insurer is required to provide the coverage. Speaking with a health insurance attorney before submitting your IMR application can significantly improve your chances of a favorable outcome.

What happens if the internal appeal deadline passes before I can act?

Missing the internal appeal deadline — generally 180 days from the denial — can seriously limit your options and may prevent you from pursuing further legal remedies. If you believe you missed the deadline due to circumstances outside your control, or if the denial letter failed to properly disclose the deadline, an attorney may be able to help you argue for an exception. This is one of the most important reasons to contact a health insurance lawyer as soon as you receive a denial letter.

Can my insurer deny the claim again after I file an appeal?

Yes. Many non-ERISA plans allow for multiple levels of internal appeal before an external review is available. Each denial at the internal level, however, creates a record — and that record becomes critical if you eventually pursue litigation. Every piece of documentation you submit, including letters from your physician and supporting medical records, strengthens your position at each subsequent stage. An attorney can help you build a compelling appeal file from the start rather than trying to fix a weak one later.

What does it mean if my insurer acted in “bad faith,” and how do I know if that applies to my situation?

Insurance bad faith occurs when an insurer unreasonably denies or delays a valid claim without a proper basis for doing so. In California, this can include denying care without a thorough investigation, using outdated or inapplicable medical guidelines, misrepresenting your policy terms, or ignoring your physician’s documented recommendations. If any of these apply to your situation, you may have a bad faith claim on top of your coverage dispute. A Los Angeles insurance bad faith attorney can review your denial letter, your plan documents, and the insurer’s conduct to determine whether the denial crossed that line.

Is it worth hiring an attorney just for the appeal, or only if I plan to file a lawsuit?

Involving an attorney early — even at the internal appeal stage — can make a substantial difference in the outcome. An experienced health insurance attorney knows how to frame the medical evidence, anticipate the insurer’s objections, and build an appeal file that supports both an IMR and potential litigation if needed. Many people who try to navigate the process alone inadvertently weaken their case before they ever reach the lawsuit stage. A consultation early in the process costs far less than trying to recover from a procedural misstep later.