Medicare denials
Medicare denials follow a federally-defined 5-level appeal process. Most beneficiaries stop at level 1. The higher levels, particularly the Independent Review Entity and ALJ, reverse a meaningful share of cases.
The rule that controls this: Coverage must track Traditional Medicare (NCDs and LCDs); CMS rule CMS-4201-F (2024) bars algorithm-only denials, resolved through the federal five-level appeal ladder.
Last reviewed 13 September 2026 · General information, not legal or medical advice · Apellica is not a law firm
What gets denied
- Skilled nursing facility (SNF) coverage
- Home health services
- Durable medical equipment (hospital beds, oxygen, mobility)
- Hospice eligibility
- Inpatient vs. observation status
- Part D drug coverage (separate ladder)
Common denial reasons
- Plan claims criteria for SNF / home-health not met
- DME deemed 'not medically necessary' or 'convenience'
- Inpatient stay reclassified as observation (lower coverage)
- Drug not on plan formulary or step therapy required
How we approach the appeal
File at level 1 within 60 days. Begin level-2 paperwork immediately on receipt of level-1 denial. The ALJ level (level 3) is where the most complex reversals happen, Medicare provides a federal judge to hear the case by phone.
60 days between each appeal level. Level-3 ALJ requires the case value to exceed $200 (2026), multiple denials can be consolidated to meet this threshold.
$1,000 - $100,000+
- · Denial / determination letter
- · Medicare card
- · CMS-1696 Appointment of Representative form (we provide)
- · Treating physician's records
- · Care plan or facility records
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Medicare denials by insurer
What each plan tends to cite, and the rule that controls it.
This page provides general information about appeal strategy. It is not legal advice. Outcomes depend on documentation, plan terms, and timing.