Your Insurer Denied a Rare Disease Drug and Fewer Than 1 in 100 People Appeal, So Here Is the Playbook

The letter usually arrives a week or two after your doctor sends the prescription. It says the drug is "not medically necessary," or that you have to "try and fail" a cheaper medicine first, or that the plan does not cover it at all. For a rare disease drug that costs more than a car every year, that letter can feel like the end of the conversation. It is the beginning of one, and the numbers say most people never have it.

In 2023, insurers selling plans on HealthCare.gov denied 20% of the in-network claims they received, 86 million out of 436 million. Consumers appealed 376,508 of those denials, an appeal rate below 1%. When people did appeal, insurers reversed themselves 44% of the time (KFF, updated March 2026). The single most effective thing a denied patient can do is the thing almost nobody does.

Why Rare Disease Drugs Get Denied, and Why Those Denials Are the Easiest Kind to Overturn

The KFF data breaks down why marketplace insurers said no. The biggest bucket, 34%, was "other," a category insurers do not have to explain. Then came administrative reasons at 21% (a missing code, a form filed wrong), excluded services at 14%, and a missing prior authorization or referral at 9%. Only about 6% of denials were for lack of medical necessity, the reason most people assume.

For a rare disease drug, that mix matters. A large share of denials are paperwork, and paperwork denials are overturned by fixing the paperwork: resubmitting with the right diagnosis code, attaching the genetic test result, or getting the prior authorization the plan wanted in the first place. The clinical denials are harder, but rare disease patients have an advantage there too. When the FDA has approved exactly 1 or 2 drugs for your condition, and your doctor can cite the label, the trial and a genetic diagnosis, "not medically necessary" is a weak position for an insurer to defend in front of an outside reviewer.

Prior authorization (PA) denial

The plan requires approval before it will pay, and said no. Most common reason: the doctor's office did not send the clinical documentation the plan's policy asks for. Ask the plan for its written coverage policy for the drug, then match the appeal to it point by point.

Step therapy ("fail first")

The plan wants you to try a cheaper drug first. Appeal with evidence you already tried it, that it is contraindicated for you, or that delay would cause harm. Many states have step therapy exception laws that require plans to grant these exceptions in set situations; the rules vary by state.

Formulary exclusion or non-formulary drug

The drug is not on the plan's list. Ask for a formulary exception: a written statement from your prescriber that the covered alternatives would not work as well or would cause harm. Medicare Part D has a formal exception process with a 72-hour clock.

Not medically necessary

The plan's reviewer disagrees with your doctor. This is the denial external review exists for. An independent review organization, not the insurer, decides, and the decision binds the plan.

Experimental or investigational

Common for gene therapies and newly approved drugs. If the FDA has approved the drug for your condition, it is by definition not experimental for that use, and this denial should be appealed with the FDA approval letter attached. External review covers this category explicitly.

Quantity or dose limit

The plan will cover the drug but not at your prescribed dose or frequency. Appeal with the label's dosing section and your weight or lab values if the dose depends on them.

Every kind of insurance has 2 sets of deadlines: how long the plan gets to answer, and how long you get to appeal. They are set by different laws, and they are not intuitive. The chart puts the ones that matter most on a single scale.

Employer and Marketplace Plans, From Internal Appeal to a Binding External Review

Most people under 65 with private coverage are on 1 of these 2 kinds of plan, and they share the same basic structure: first the insurer reviews its own decision (an internal appeal), then an outside reviewer can overrule it (an external review). The federal rules for employer plans come from the Department of Labor; the rules for marketplace and individual plans come from the Affordable Care Act, and HealthCare.gov spells them out.

Step 1: File the internal appeal within 180 days

You have at least 180 days from the date you receive the denial notice to file an internal appeal, under both the employer-plan rules and the marketplace rules (29 CFR 2560.503-1; HealthCare.gov). The plan must then decide within 30 days if you have not yet received the drug, or 60 days if you already have, and within 72 hours if the case is urgent. Employer plans that use 2 levels of appeal get 15 days per level for a pre-service claim, and both employer and marketplace plans must decide an urgent appeal within 72 hours.

The appeal is stronger coming from your doctor's office than from you alone, because the plan's decision turns on clinical documentation. Ask the office to send a letter of medical necessity that names the diagnosis with its ICD-10 code, states the genetic or biopsy confirmation if there is one, lists every prior treatment and why it failed or cannot be used, quotes the FDA label's indication word for word, and cites the pivotal trial. Ask the plan, in writing, for its clinical coverage policy for the drug and for the documents it relied on to deny the claim. Then match the letter to the policy's own criteria, one by one.

Step 2: Request external review within 4 months

If the internal appeal fails, you can request an external review within 4 months of receiving the final denial (HealthCare.gov). An independent review organization, not the insurer, decides, and the insurer is required by law to accept the outcome. External review is available for any denial that involves medical judgment, including "not medically necessary" and "experimental or investigational" decisions. It is built for denials that turn on medical judgment; if the letter says the drug is simply not a covered benefit, the better first move is usually a formulary exception request, so read the denial reason carefully before choosing the route.

Who runs the external review depends on your state. States with their own program that meets federal standards run it themselves; in states that do not (as of September 2026, HealthCare.gov lists Alabama, Florida, Georgia, Texas and Wisconsin, plus state and local government plans), insurers there may use the federal HHS-administered process, run by the contractor MAXIMUS Federal Services (1-888-866-6205), or contract with their own independent review organizations. HealthCare.gov's list also includes U.S. territories other than Puerto Rico. A plan that takes part in neither a state process nor the federal one must contract with an independent review organization of its own (HealthCare.gov).

Medicare Part D and Medicare Advantage Appeals Have 5 Levels and a 65-Day Filing Deadline

Medicare works differently, and the differences favor the patient in 1 way: the clocks are short. A Part D plan must decide a coverage determination, including an exception request for a drug that is not on its formulary or that requires prior authorization, within 72 hours, or 24 hours if expedited (42 CFR 423.568 and 423.572). The exception request needs a statement from your prescriber explaining the medical reason the covered alternatives would not work for you.

Two practical points. First, your prescriber can request the coverage determination and the Level 1 appeal for you; ask. Second, free, one-on-one help with every level comes from your State Health Insurance Assistance Program, found at shiphelp.org (Medicare.gov). SHIP counselors handle Medicare appeals every week.

Which part of Medicare pays matters too. A pill or a self-injected drug runs through Part D and its exception process. A drug infused or injected in a clinic, such as an IV enzyme replacement, usually runs through Part B, and in Medicare Advantage that means an organization determination and a 7-day appeal clock instead. Our Medicare open enrollment checklist walks through the Part B versus Part D split and the 2027 $2,400 Part D cap.

Medicaid Appeals Run Through Your Managed Care Plan and Then a State Fair Hearing

Many people on Medicaid are enrolled in a managed care plan run by a private insurer under contract to the state. If that plan denies a drug, federal rules require you to appeal to the plan first, within 60 days of the date on the denial notice (42 CFR 438.402). The plan must decide within 30 days, or 72 hours if the appeal is expedited (42 CFR 438.408). If the plan upholds the denial, or misses its own deadline, you can then request a state fair hearing, where a hearing officer who does not work for the plan decides; you have at least 90 and up to 120 days from the plan's decision, with the exact number set by your state (42 CFR 438.408). If the state Medicaid agency denied the drug directly rather than a managed care plan, you have up to 90 days from the date the notice was mailed to request the hearing, and the state must accept the request by web, phone, mail or in person (42 CFR 431.221).

Keeping an existing prescription covered during the appeal has its own, much shorter deadline. To get continuation of benefits, file the plan appeal and ask for it within 10 calendar days of the date on the notice, or before the change takes effect if that is later (42 CFR 438.420). Your plan's member handbook, the state's Medicaid ombudsman or a legal aid office can tell you your state's exact fair hearing window.

6 Rare Disease Denial Scenarios, and How Each One Actually Gets Resolved

The scenarios below are composites, built to match the situations rare disease patients write to us about most. The drugs, deadlines and programs are real; the people are not. Each one shows which rule applies and which move usually works.

Scenario 1: An employer plan denies Filspari for IgA nephropathy because "documentation was incomplete"

A 41-year-old with IgA nephropathy on a self-funded employer plan gets a prior authorization denial for sparsentan (Filspari). The reason code says the plan did not receive proof of proteinuria level or of a kidney biopsy. This is an administrative problem, the same kind that made up 21% of denial reasons in the KFF data on claims, and it is fixed by resubmission rather than argument. The nephrologist's office refiles with the biopsy report, the most recent urine protein-to-creatinine ratio and the plan's own coverage policy criteria checked off, and asks the plan to treat it as a new prior authorization request, which the plan must decide within 15 days. Meanwhile the patient calls Travere TotalCare, the drugmaker's support program, which handles insurance questions for this drug and can say what plans usually ask for.

Scenario 2: Step therapy blocks a daily acromegaly pill because the plan wants injections first

A 58-year-old with acromegaly, whose pituitary surgery did not control her disease and who has been on monthly octreotide injections for 3 years, asks to switch to paltusotine (Palsonify), the once-daily pill approved in 2025. The plan denies it under step therapy, saying she must try lanreotide first. Her endocrinologist appeals with 2 arguments: she has already "stepped" through an injectable somatostatin analog for 3 years, which is the kind of step the plan is asking for, and the FDA label for Palsonify covers adults with acromegaly who had an inadequate response to surgery or for whom surgery is not an option, with nothing requiring lanreotide first. Where the state has a step therapy exception law, the letter cites it; these laws differ by state, and many list situations such as having already tried the required drug or being stable on a current one. Where there is no such law, the same facts go into a medical-necessity appeal, and if the plan still refuses, external review, because "which drug is appropriate" is a medical judgment an outside reviewer can overrule.

Scenario 3: A Medicare Part D plan puts Vyndamax on a tier the patient cannot afford

A 76-year-old man with ATTR cardiomyopathy is prescribed tafamidis (Vyndamax). His Part D plan covers it, but only with prior authorization and on a specialty tier with a high coinsurance. His cardiologist files the coverage determination with the pyrophosphate scan result and the diagnosis, and the plan approves it within the 72-hour window, which starts when the plan receives the prescriber's supporting statement. The cost problem is separate from the coverage problem. In 2027 his Part D out-of-pocket costs are capped at $2,400 for the year, and he can spread that over the months remaining in the year with the Medicare Prescription Payment Plan, which Part D plans offer. Drugmaker copay cards cannot be used with Medicare, but Pfizer's VynAssist free-medicine program and the HealthWell Foundation's Medicare-specific cardiomyopathy fund can, and both are listed with their current status in our assistance finder. Had the plan denied the drug outright, the appeal would have run Level 1 (7 days) and, if needed, Level 2 (7 days), with his SHIP counselor filing the paperwork.

Scenario 4: A marketplace plan calls an FDA-approved gene therapy "experimental"

The parents of a 14-year-old with sickle cell disease on a marketplace plan are told that exagamglogene autotemcel (Casgevy) is "investigational." It has been FDA-approved for sickle cell disease since December 2023. This is the cleanest external-review case there is: HealthCare.gov lists experimental-or-investigational denials as explicitly eligible for external review, and an FDA approval for the exact indication is close to conclusive with an independent reviewer. The family files the internal appeal with the FDA approval letter and the label, and, because the child's condition involves recurring pain crises and stroke risk, requests an expedited external review at the same time. Vertex Connects, the drugmaker's program, assigns a case manager who works with the treatment center on the coverage paperwork.

Scenario 5: A hereditary angioedema patient is out of on-demand medicine and the plan wants 2 weeks

A 34-year-old with hereditary angioedema has 1 dose of her on-demand attack treatment left and a refill denied for exceeding the plan's quantity limit. An untreated laryngeal attack can close the airway. This is the definition of urgent. Her allergist calls the plan and states, in those words, that a delay could seriously jeopardize her life, and requests an expedited coverage decision; the plan must answer within 72 hours. If it still says no, she files an expedited internal appeal and an expedited external review together, and the external reviewer has 72 hours. In parallel, she calls the drugmaker's support program, because some drugmaker programs can supply medicine during a coverage gap, which is why the HAE drug programs belong on the first phone call, not the last.

Scenario 6: Medicaid managed care denies a child's drug and the letter sits unopened for 7 weeks

A family whose 11-year-old has FOP gets a denial from their Medicaid managed care plan for palovarotene (Sohonos), the only approved FOP drug for children under 12. The letter sits in a pile for 7 weeks. Federal rules give Medicaid managed care members 60 days from the date on the notice to appeal to the plan, so on day 49 the family still has 11 days. They file the plan appeal by phone that day and ask for it to be expedited, which the plan must decide within 72 hours, on the grounds that FOP can progress irreversibly with each flare. If the plan upholds the denial, they have at least 90 and up to 120 days from that decision, depending on the state, to request a state fair hearing, and the state's Medicaid ombudsman can help them prepare. The lesson in the scenario is the calendar: open every letter from the plan the day it arrives, write the date you received it on the envelope, and count forward.

What Doctors Say About Prior Authorization, and Why Their Offices Sometimes Do Not Appeal

The American Medical Association surveys physicians about prior authorization every year. In the survey fielded in December 2025, 95% of the 1,000 physicians said prior authorization delays care, 92% said it has a negative effect on outcomes, and 26% said it has led to a serious adverse event for a patient, including 20% who reported a hospitalization (AMA, 2026). Physicians reported completing an average of 40 prior authorizations a week, with physicians and their staff spending 13 hours a week on them.

The last row is the one to act on. Only 21% of physicians said they always appeal, and when asked why not, 59% said they did not believe the appeal would succeed, 52% said they did not have the staff or time, and 49% said the patient's care could not wait (AMA, 2026). The KFF numbers say the first belief is wrong: 44% of internal appeals succeeded. The second and third are real, and they are why a patient who volunteers to do the legwork, gathering records, requesting the plan's policy and drafting the timeline of prior treatments, changes the odds. You are not asking the office to do more work; you are doing the part that does not need a medical license.

What to Put in a Rare Disease Drug Appeal Letter

An appeal that wins usually has 6 parts, whether it is going to an employer plan, a Medicare IRE or an external reviewer. The diagnosis, with its code and how it was confirmed (genetic test, biopsy, scan). The FDA-approved indication, quoted from the label so the reviewer sees your case inside the approved use. The trial evidence, cited by name and result, which for a rare disease is usually 1 pivotal study the reviewer can look up in minutes. The treatment history, listing each prior drug, the dates, and why it failed or cannot be used. The consequence of delay, stated specifically for your disease (irreversible bone formation, kidney function lost per month, airway risk). The plan's own policy, quoted, with each criterion answered.

Every drug page on this site carries the label's indication, the pivotal trial and its primary sources, so you can pull the citations from the drug page for your medicine rather than searching. If the plan's policy asks for something the label does not require, say so plainly: plans sometimes copy criteria from an older drug or a different disease, and an outside reviewer will notice.

Free Help With a Drug Denial, by Insurance Type

Employer or marketplace plan

Your state's Consumer Assistance Program (CAP) can file the appeal for you. CMS keeps the list; in states without a CAP (the CMS map lists 20 states and 3 territories, including Florida, Ohio, Virginia and Washington), the state insurance department or, for self-funded employer plans, the U.S. Department of Labor takes the call (CMS, Consumer Assistance Program Grants page).

Medicare (Part D, Part B or Medicare Advantage)

Your State Health Insurance Assistance Program (SHIP) gives free, personalized counseling and will help with every appeal level. Find yours at shiphelp.org (Medicare.gov).

Medicaid

The state Medicaid ombudsman, your plan's member advocate, and local legal aid offices, which handle fair hearings routinely.

Any insurance

The Patient Advocate Foundation assigns case managers who work directly with insurers on denials and appeals at no cost. The drugmaker's patient support hub for your medicine, listed with its phone number for every approved drug in our patient assistance finder, employs people whose whole job is getting that specific drug covered. Call both.

One more number from the KFF survey work: only 40% of consumers believed they had a legal right to appeal to a government agency or independent reviewer, and 51% were not sure. Among marketplace enrollees the figure was 34%. You do have that right, and when people use it, insurers themselves reverse 44% of the denials on internal appeal.