Almost every argument about a denied claim is settled by the party that issued the denial. The plan reviews its own decision; the plan decides whether to change its mind. External review is the one step where that stops being true. After internal appeals are exhausted, a denial that turns on medical judgment can be handed to an Independent Review Organization — a neutral third party whose decision the plan must follow. It is the last rung of the non-Medicare appeal ladder, and the only one where the reviewer has no stake in the outcome.
That structural difference is why external-review outcomes are worth counting on their own. When someone with no financial interest reads the same file the plan read, how often does the answer change? The public data that can answer that is thin and uneven, but where it exists, it points the same direction: a large share of the denials that survive internal appeal do not survive an independent one.
California — DMHC
2024 reportIndependent Medical Review, commercial & Medi-Cal managed care
73%1
Share of enrollees who received the requested service through IMR — the plan reversed itself or the IRO overturned it.
DMHC Annual Report
New York — DFS
2024External appeals decided on the merits by an appeal agent
49%2
4,612 denials overturned against 4,799 upheld — of appeals an independent agent actually decided in 2024.
NY DFS Annual Report
Four states — IMR analysis
2019–23CA, NY, WA, OR · 51,236 published IMR decisions
46%3
Overall overturn rate across every publicly posted IMR decision in the four states that post them, 2019–2023.
Health Affairs (Lin et al.)
Federal Marketplace
2024HealthCare.gov external appeals
—%4
5,881 external appeals were filed — about 4% of upheld internal appeals — but the overturn rate is suppressed and cannot be computed.
KFF · CMS transparency data
Read the seals together and the honest headline is a range, not a point. New York, which publishes a clean count of merits decisions, split them almost evenly — 49% overturned against 51% upheld in 2024.2 The four-state academic analysis, pooling every posted decision in California, New York, Washington, and Oregon, put the overall figure at 46% overturned across 51,236 cases, with California overturning a majority of its denials and Washington upholding more than two-thirds of its own.3 California’s own summary reaches higher — roughly 73% — but measures a broader thing, and that difference is the whole point of reading these numbers carefully.
What each number is actually counting
The seals are not measuring the same denominator, and treating them as one trend line would be wrong. Three distinct questions hide inside the word “overturn.”
| Figure | The question it answers | Denominator |
|---|---|---|
| California ~73% | Did the enrollee end up getting the service? | Every IMR request — counts denials the plan reversed on its own before the IRO ruled, plus IRO overturns. |
| New York 49% | When an independent agent decided, did it side with the patient? | Only appeals decided on the merits (overturned + upheld) — voluntary reversals and ineligible filings removed. |
| Four-state 46% | Across every posted decision, how often was the denial reversed? | All published IMR decisions in four states, 2019–2023 — the broadest apples-to-apples base available. |
| Federal — | Nationally, how often does external review overturn? | Unknown. The federal figure is suppressed for small counts and cannot be published. |
Sources 1–4. The California and New York figures are not comparable directly: one includes plan self-reversals, the other counts only decided appeals. See methodology.
The gap between California’s 73% and New York’s 49% is mostly definitional. California’s measure rewards a plan for backing down before the reviewer rules — a “voluntary reversal” still counts as the enrollee getting the service. New York reports those separately (593 of them in 2024) and holds them out of its merits count.2 Both facts are useful; they are simply answers to different questions. The one figure that would let you compare the country as a whole to any of them does not exist.
Why there is no national number
Every state has an external-review process — that much is federal law. Under 45 CFR 147.136, a state either runs a review program that meets federal standards, or its residents default to the HHS-administered federal process operated by MAXIMUS.5 The right exists in all 51 jurisdictions — we track who runs each one. What does not exist is a single published overturn rate for the country. KFF, working from CMS transparency files, found 5,881 external appealsfiled on HealthCare.gov plans in 2024 — about 4% of all upheld internal appeals — but reports that “due to the suppression of small values, the rate at which external appeals were upheld could not be calculated.”4 The federal reporting is too sparse, and too redacted, to yield a rate.
So the strongest evidence is state evidence, and it is concentrated in the handful of states that post their decisions. Four of them do so in bulk — which is exactly why the peer-reviewed analysis could only study those four.3 Everywhere else, the outcome data is either unpublished or too fragmentary to total.
The last rung, and why it’s different
External review is not another internal appeal with a new name. It is a separate stage that only opens afterthe plan’s own process is finished, and its defining feature is that the reviewer is not the plan and the decision is binding.
Where external review sits in the ladder
Internal appeal — filed with the plan
The plan reviews its own decision
The provider or patient asks the insurer to reconsider. A different reviewer at the same plan looks again, but the party that issued the denial still owns the outcome. Most denials never get this far.
Final internal adverse determination
The plan — last word inside the plan
When the internal process is exhausted and the denial stands, the plan issues a final adverse determination. This is the door that external review requires you to walk through first.
External review — decided by an IRO
Binding on the planA neutral Independent Review Organization
An independent reviewer with no financial stake reads the file against the standard of care. The IRO is assigned by the state program or the federal process, depending on the state and plan type — see how California runs its IMR.
The plan must comply
Binding outcome
If the IRO overturns the denial, the plan is required to authorize and pay for the service. There is no internal veto over an external-review decision — that is what makes it the strongest non-Medicare step.
The binding-decision detail is what gives the scoreboard its weight. An internal-appeal reversal is the plan agreeing with you; an external-review overturn is a party the plan cannot overrule disagreeing with the plan. Which is also why so few claims reach this rung. Consumers externally appealed only about 4% of their upheld internal appeals in the federal data,4and New York’s ~15,000 external appeals a year are a rounding error against the tens of millions of denials issued nationally.2 External review works; almost no one uses it.
Sources
- 1California DMHC — Independent Medical Review & Complaint Reports (Annual Report: ~73% of patients receive the requested service through IMR) · 2024 report
- 2New York DFS — Consumer Protection & Financial Enforcement Division Annual Report (External Appeals: 4,612 overturned, 4,799 upheld, 593 voluntary reversals of 15,130 closed) · 2024 (published Mar 2025)
- 3Lin GA, Coffman JM, Douglas MP, Phillips KA — “Use Of Independent Medical Review: Almost One-Half Of Coverage Denials Overturned,” Health Affairs 45(1):63–67 (46% of 51,236 IMR decisions overturned; CA, NY, WA, OR) · Jan 2026 (2019–23 data)
- 4KFF — Claims Denials and Appeals in ACA Marketplace Plans in 2024 (5,881 external appeals ≈ 4% of upheld internal appeals; external overturn rate suppressed) · 2024 data
- 5eCFR — 45 CFR 147.136, Internal claims and appeals and external review processes (applicable state process vs. HHS-administered federal process) · accessed Jul 2026