A retroactive denial is a denial applied to care that already happened — sometimes to a claim the plan already paid. It comes in two forms with separate rules. A rescission is a retroactive cancellation of coverage itself, which federal law sharply limits. A post-payment denial or recoupment is the reversal of a single claim, which runs through the ordinary appeal process. Knowing which one you're facing decides the argument and the deadline.
Two different things get called a "retroactive denial"
Before you respond, separate the two. A rescission cancels the coverage retroactively — as if the person was never insured for that period. A post-payment denial or recoupment leaves coverage intact but reverses one claim, often by clawing back money already paid to the provider. The protections and the deadlines are not the same.
Identify which one you have first
Rescission: when the plan cancels coverage after the fact
Under the Affordable Care Act (Public Health Service Act section 2712, implemented at 45 CFR 147.128), a plan or issuer generally cannot rescind coverage once someone is enrolled unless that person committed fraud or made an intentional misrepresentation of material fact. A routine error, or the plan's own second-guessing, is not enough. The plan must also give at least 30 days' advance written notice before a rescission takes effect, so it can be challenged before coverage disappears.
- Fraud or intentional misrepresentation of material fact is the only general basis for a rescission.
- At least 30 days' advance written notice is required before it takes effect.
- A cancellation for unpaid premiums is not a rescission — it's a different, permitted action.
Post-payment denial: when a paid claim is reversed
A recoupment or post-service denial reverses one claim while coverage stays in place. This runs through the normal appeal process for the plan type. For employer (ERISA) plans, federal rules give the claimant at least 180 days to appeal an adverse benefit determination (29 CFR 2560.503-1), and the plan generally must decide a post-service appeal within 60 days. A denial that involves medical judgment can then go to independent external review (45 CFR 147.136).
A prior authorization doesn't always settle it: many plans state that an approval confirms medical necessity but not final eligibility or benefits at the time of service. That's why a retroactive denial after an apparent approval is contested on the documentation and the appeal rules — not on the approval alone.
How to respond
- 1
Read the notice for which action it is
A coverage cancellation points to the rescission rules; a reversed or recouped claim points to the post-payment appeal process.
- 2
For a rescission, test the basis and the notice
Unless there's fraud or an intentional material misrepresentation — and 30 days' advance written notice — the rescission is vulnerable. Respond before the effective date.
- 3
For a recoupment, appeal on the record and the clock
File within the deadline on the notice (at least 180 days for ERISA plans), tie the documentation to the coverage criterion, and preserve external-review rights for medical-judgment denials.
- 4
Keep the dated paper trail
Authorization numbers, approval dates, the original payment, and the recoupment notice establish the timeline the appeal turns on.
Frequently asked
Can my insurer cancel coverage retroactively?
The insurer is taking back money it already paid — can I appeal?
I had prior authorization and they still denied it later — how?
Primary sources: 45 CFR 147.128 (rules regarding rescissions); 29 CFR 2560.503-1 (ERISA claims procedure); 45 CFR 147.136 (internal claims, appeals & external review). General information, not legal or medical advice — confirm against the governing rule for the plan type.
When the appeal has to be written, and cited
Upload the denied EOB and Merits returns a complete, citation-verified appeal letter — the clinical argument, the payer's own coverage criteria, and your federal appeal rights — in about a minute.