When a claim is denied, the first appeal isn’t always the last word. Most payers offer several opportunities to challenge a denial, and providers who understand the full process are in a much better position to recover the revenue they’ve earned. The catch is that the number of levels, the deadlines, and the rules at each step depend on who the payer is. Here’s a look at how the appeals process typically works for the payers behavioral health providers see most often.
Traditional Medicare: Five Levels
Original Medicare has the most clearly defined appeals process.
- Redetermination by a MAC. The first level is a redetermination by the Medicare Administrative Contractor (MAC) that processed the claim. Providers typically have 120 days from the initial determination to request it, and a decision is usually made within 60 days.
- Reconsideration by a QIC. If the redetermination is unfavorable, the second level is a reconsideration by a Qualified Independent Contractor (QIC). This is usually requested within 180 days of receiving the Level 1 decision letter, with a decision being made within 60 days.
- ALJ Hearing. The third level is a hearing before an Administrative Law Judge (ALJ) or attorney adjudicator through the Office of Medicare Hearings and Appeals (OMHA). This is done within 60 days of receiving the level 2 QIC reconsideration decision.
- Review by the Medicare Appeals Council. A review can be requested from the Medicare Appeals Council within 60 days from the ALJ decision.
- Judicial Review. The last step is a judicial review in federal district court. This must be requested within 60 days of receiving the Medicare Appeals Council decision.
It’s also important to note that the ALJ hearing and federal court review also require the amount in controversy to meet a minimum dollar threshold that CMS adjusts each year. For appeals filed in 2026, the threshold is $200 for an ALJ hearing and $1,960 for federal court review. CMS has announced that the federal court threshold will rise to $2,000 in 2027, while the ALJ threshold stays at $200.
Medicare Advantage
Medicare Advantage plans follow a similar structure, though the first steps are handled a bit differently. The initial appeal goes to the plan itself as a reconsideration instead of the MAC. If the plan upholds its denial, the case generally moves forward to an Independent Review Entity. After this point, the process can continue like it would with Original Medicare—an ALJ hearing, the Medicare Appeals Council, and federal court. Contracted providers should also check their agreements, since some plans move payment disputes through separate contractual processes.
Commercial Insurance Plans
Commercial payers are trickier because they don’t follow a single national structure. However, most offer one or two levels of internal appeal. For example, employer-sponsored plans governed by ERISA typically give members 180 days to file an internal appeal after a denial. Once internal appeals are exhausted, many plans are subject to external review, where an independent review organization makes the decision. External review is especially important for medical-necessity denials, since it puts the case in front of a reviewer who isn’t employed by the payer. External reviews can change based on whether the plan is fully insured or self-funded and the state it’s in.
Medicaid
Medicaid appeals vary widely by state. When a state contracts with managed care organizations, providers usually start with the plan’s internal appeal or dispute process. Members also have the right to request a state fair hearing after the plan’s appeal is decided. Because each state sets its own rules and timelines, providers who serve Medicaid clients in more than one state need to track each program separately.
Making the Most of Every Level
Regardless of the payer, there are a few habits that make the appeals process more successful:
- Track every deadline from the moment a denial arrives.
- Build the strongest possible record at the first level.
- Review the denial carefully to understand exactly why the payer determined the services weren’t medically necessary.
- Make sure clinical documentation directly addresses the payer’s reasons for denial.
- Keep detailed records of all communications, submissions, and appeal decisions.
- Follow the payer’s specific appeal procedures and documentation requirements.
- Don’t give up after one unfavorable decision, especially if additional appeal options are available.
Don’t Let Appealable Denials Become Lost Revenue
Keeping up with appeals across multiple payers takes time that many behavioral health facilities simply don’t have. Integrity Billing helps providers manage denials and appeals at every level so revenue doesn’t slip through the cracks. Want to know how many of your denied claims could still be recovered? Request a free forensic assessment from Integrity Billing. We’ll review your denials, identify missed appeal opportunities, and show you where your process can improve, at no cost and with no obligation. Contact Integrity Billing today at 888-368-7461 to get started.