Grievance and Appeals Process: What Health Plans Must Offer Patients Under the ACA (45 CFR Part 147)

The Affordable Care Act requires non-grandfathered health plans to maintain a robust grievance and appeals architecture, including internal claims and appeals and access to external review by an independent review organization (IRO) under 45 CFR 147.136. For small practices, that framework becomes operational only when front desk, clinical, and billing staff can match a specific denial to the correct appeal lane and timeline, assemble evidence in the right order, and preserve the record in case of external review. When clinics standardize capture of the adverse benefit determination (ABD), route urgent cases immediately, and escalate cleanly to external review after the final internal adverse benefit determination (FIABD), they reduce write-offs, protect patients from inappropriate out-of-pocket costs, and demonstrate compliance readiness during audits.

Denials are unavoidable; disorganized appeals are not. The ACA’s grievance and appeals rules exist to ensure patients can contest coverage denials through a fair, timely process culminating, when needed, in review by a neutral IRO. Small practices can benefit directly: a better-built appeal can reverse a denial or secure approval with reduced staff time. This guide translates 45 CFR 147.136 into a clinic-size playbook: identify the denial category, choose the correct appeal lane, compile evidence that speaks to coverage criteria, and escalate on schedule. The outcome is fewer revenue leaks and stronger patient advocacy.

Legal Framework & Scope Under 45 CFR Part 147

Minimum appeal rights for non-grandfathered plans. 45 CFR 147.136 sets floor protections for internal claims and appeals and access to external review for non-grandfathered coverage. Plans must provide a full and fair review, accept appeals filed within required windows, and issue determinations within specified timeframes. Patients must receive clear, written notices of adverse benefit determinations, including reasons, plan criteria relied upon, and how to appeal.

Internal claims and appeals. The rule delineates urgent care, pre-service, and post-service determinations with distinct decision clocks. Patients have a defined period (commonly up to 180 days) to file an internal appeal after an ABD. Plans must allow the claimant to submit written comments, documents, and records, and provide reasonable access to relevant documents used in making the decision.

External review by an IRO. After the plan issues a final internal adverse benefit determination, patients may request external review. The IRO evaluates medical necessity and coverage under plan terms and applicable standards. There are standard and expedited external reviews; expedited review applies when delay would jeopardize life/health or when an urgent ongoing course of treatment is at issue.

Notice standards and transparency. Notices must explain the reason for denial, reference the plan provisions involved, describe any internal rules, guidelines, or protocols relied upon, and disclose the right to external review. Plans must provide continued access to the case file on request and explain the availability of assistance, including language access support where applicable.

State and federal roles. If a state’s external review program meets federal minimum standards, plans subject to that state’s jurisdiction must use the state program; otherwise, the federal external review process administered under HHS standards applies. Understanding the applicable program (state vs federal) ensures filings meet the correct procedural requirements.

Why this reduces denials and friction. Using the rule’s structure to triage appeals ensures the clinic files in the correct lane with complete evidence by the right deadline, which increases overturn rates and prevents “ping-pong” resubmissions that waste staff time.

Primary enforcement. CMS’s Center for Consumer Information and Insurance Oversight (CCIIO) oversees compliance with market reforms, including appeals rules in 45 CFR 147.136, often in coordination with state Departments of Insurance for fully insured coverage. For self-funded non-federal governmental plans using HHS processes, HHS administers external review standards.

Common triggers, touching clinics.

• Patterns of late or incomplete appeal determinations or missing notices.

• Repeated denials that conflict with published plan criteria, leading to patient complaints.

• Failure to provide access to case files or to include the right to external review in final internal appeal notices.

• Misuse of urgent vs standard timeframes, resulting in patient harm risks.

What reviewers expect to see. A clear trail: ABD notice captured in the chart, complete internal appeal content (clinical notes, coding sheets, literature or criteria references), proof of timely filing, and, when escalated, a conforming external review request packet. Clinics that maintain these records speed resolution and, if needed, support complaints or audits with clean evidence.

Below are targeted controls that convert 45 CFR 147.136 into repeatable clinic workflows. Each item includes implementation, evidence, and a low-cost approach.

1) First-Touch Denial Huddle (Freeze, Read, Route)

• Implement: On receipt of an ABD, staff “freeze” rework for ten minutes, read the notice verbatim, identify the denial type (coverage vs medical necessity vs coding/administrative), and route to the proper lane (urgent, pre-service, post-service).

• Evidence: Timestamped huddle note with denial reason, lane selected, and deadline.

• Low-cost: One-page huddle card; shared inbox rule tagging “Adverse Benefit Determination.”

• Why it matters: Prevents wrong-lane appeals and missed deadlines under 45 CFR 147.136.

2) Appeals Packet Builder (Plan Terms First, Evidence Second)

• Implement: Assemble a packet in this sequence: (a) ABD notice, (b) relevant plan provisions and clinical policy criteria cited by the plan, (c) physician letter of medical necessity, (d) key clinical notes and results, (e) coding sheet, (f) timeline tracker.

• Evidence: Versioned PDF stored with date, patient ID (de-identified in training copies), and filing confirmation.

• Low-cost: Shared template with form fields; free PDF merger.

• Why it matters: Mirrors the full and fair review requirements and speeds both internal and external review.

3) Urgent vs Standard Clock Selector

• Implement: Use a simple decision tree: life/health jeopardy, severe pain, or loss of function risks → urgent; all others → standard (pre- or post-service).

• Evidence: Decision tree checkbox saved with appeal; clinician attestation for urgent cases.

• Low-cost: Laminated flowchart by scanner.

• Why it matters: Ensures the clinic enforces appropriate expedited timelines contemplated by 45 CFR 147.136.

4) Coverage vs Payment Split

• Implement: Front-end screen whether the issue is coverage (benefit not covered under plan terms, medical necessity, experimental/investigational) or payment (down coding, bundling edits).

• Evidence: Split logged in packet; if payment-only, route to payer claims inquiry instead of appeals.

• Low-cost: Two checkboxes in the denial huddle sheet.

• Why it matters: Appeals processes under 147.136 govern coverage denials; payment edits often follow different correction paths.

5) Pre-Service PA Rescue

• Implement: For pre-service denials, stage a focused appeal with updated clinical facts and any new guideline-concordant evidence. Keep it under two pages for the narrative.

• Evidence: PA denial notice, plan criteria excerpts, and provider letter with precise guideline citations.

• Low-cost: Model letter snippets keyed to common pre-service services your clinic provides.

• Why it matters: Aligns evidence with the plan’s criteria, as required for a “full and fair” internal review.

6) External Review Trigger Discipline

• Implement: When a final internal adverse benefit determination arrives, generate an automatic task to prepare the IRO request within the permitted window.

• Evidence: FIABD captured; IRO filing confirmation or certified mail receipt.

• Low-cost: Calendar trigger in your practice email; checklist page “IRO Ready?”

• Why it matters: Maintains the patient’s right to independent review contemplated by 45 CFR 147.136.

7) Notice Quality Check (Required Elements Present)

• Implement: Before filing, audit that the plan’s notice contains: reasons for denial, plan provisions relied upon, description of internal rules/guidelines, instructions for appeal, and external review rights after FIABD.

• Evidence: Marked-up copy of the notice with a short checklist.

• Low-cost: Two-minute “Notice Elements” stamp or header.

• Why it matters: Incomplete notices may be procedurally defective; pointing that out can reset or cure process errors.

8) Appeals Outcomes Loop

• Implement: Code each outcome (overturned, partially overturned, upheld) and log the decisive rationale (missing clinical element, plan exclusion, coding issue). Convert insights into “avoidance rules” for scheduling and prior auth.

• Evidence: Quarterly summary table with two or three new rules adopted.

• Low-cost: Spreadsheet with pivot table; five-minute staff review monthly.

• Why it matters: Reduces recurrence and builds payer-specific intelligence.

Case Study

A small rheumatology clinic receives a pre-service denial for biologic therapy as “not medically necessary.” The ABD notice cites plan clinical criteria the clinic has not reviewed. Historically, staff resubmitted similar requests with longer narratives and saw limited success. This time, the clinic runs the First-Touch Denial Huddle, identifies the denial as coverage/medical necessity, and pulls the cited plan provisions and criteria into the packet. The provider letter now maps each criterion to objective data (DAS28 score, prior DMARD failures, CRP trend) and includes peer-reviewed summaries that the plan’s criteria reference. The plan overturns the denial at first-level internal appeal. Later that year, a similar denial is upheld at internal levels but overturned at external review after the clinic files on time with the exact evidence set the IRO needs per 45 CFR 147.136. The clinic closes the loop by adding an “avoidance rule” to always include formal disease activity scores and a line-by-line mapping table when the cited criteria require them.

Common Pitfalls and How to Avoid It Under 45 CFR 147.136

Even strong clinics stumble when they treat appeals as narrative letters rather than rule-driven packets. These pitfalls and fixes keep your process aligned to the regulation.

• Pitfall: Filing in the wrong lane (e.g., post-service appeal for an urgent ongoing treatment). Avoid it: Use a one-page lane selector that keys risk of serious jeopardy or ongoing treatment to the expedited timelines recognized under 45 CFR 147.136; attach clinician attestation of urgency.

• Pitfall: Ignoring the plan’s cited clinical criteria. Avoid it: Lead with the plan provisions and criteria the ABD references, then map clinical facts point-by-point; this meets the “full and fair review” expectation embedded in 147.136 and avoids generic necessity letters.

• Pitfall: Missing external review windows after FIABD. Avoid it: Create an automatic IRO trigger when the FIABD arrives; pre-stage a packet with ABD, FIABD, plan criteria, and clinical mapping, so filing is mechanical.

• Pitfall: Treating payment edits as coverage denials. Avoid it: Split coverage vs payment early; send bundling/downcoding issues through the payer’s claims correction route, reserving 147.136 appeals for benefit denials.

• Pitfall: Submitting lengthy narratives without labeled evidence. Avoid it: Use the Appeals Packet Builder order (notice → plan terms → clinical letter → key evidence → coding sheet → timeline). Label exhibits for fast reviewer scanning.

• Pitfall: Incomplete ABD notices go unchallenged. Avoid it: Run the notice elements checklist (reasons, plan provisions, internal rules/guidelines, appeal instructions, external review rights). If incomplete, note procedural defects in your appeal.

Applying these fixes converts ad hoc letter-writing into a reproducible, regulation-aligned process that improves overturn rates and lowers administrative waste.

Effective appeals hinge on short, reliable handoffs. Assign a Denial Intake Lead to own the first-touch huddle and lane selection. The Clinical Evidence Lead maintains two-page medical necessity letter templates for the clinic’s top ten services. A Compliance Coordinator owns the IRO trigger and ensures the packet meets external review standards. Hold a 15-minute monthly review that looks only at: (1) on-time filings, (2) overturn rate, (3) common decisive rationales, and (4) new avoidance rules to fold into prior authorization or scheduling. This tiny cadence institutionalizes learning without adding headcount.

A clinic-sized appeals system aligned to 45 CFR 147.136 protects patients and revenue. The key is to treat the appeal as a rule-driven packet filed in the correct lane, not a free-form narrative. Build the packet around the plan’s own provisions, meet the clock for the lane you are in, and escalate to external review precisely when the FIABD arrives. Then, mine outcomes into your scheduling and authorization rules, so the same denials stop happening.

Next actions for the next 7 days

• Stand up the Appeals Packet Builder with a required sequence and exhibit labels; test it on two recent denials.

• Print and deploy the lane selector and the notice elements checklist at every scanner.

• Add an IRO trigger task template tied to FIABD capture; include a two-item evidence reminder (plan criteria + clinical mapping).

• Build two high-impact medical necessity letter templates for your most-denied services, each mapped to commonly cited plan criteria.

• Launch a five-minute appeals outcomes loop at month-end, producing one new “avoidance rule” for prior auth or scheduling.

• 45 CFR 147.136 — Internal Claims and Appeals and External Review Processes

• 45 CFR Part 147 — Health Insurance Reform Requirements for the Group and Individual Markets

• Technical Guidance on External Review Standards (HHS/CCIIO)