A denial letter should read like a clinical note. A clinical note tells the next clinician what was asked and what was found. It also says what the writer concluded and what happens next. Most prior authorization denial letters do none of that well. They cite a policy number and repeat a phrase about medical necessity. The appeal rights follow in small print.
The rules already ask for more. Medicare Advantage denial notices must “state the specific reasons for the denial” in “readable and understandable form,” under 42 CFR § 422.568(e). Yet in 2015, CMS cited 45% of the Medicare Advantage contracts it audited for sending denial letters with incomplete or incorrect information, according to a 2018 OIG report. The gap is not in what the rules require. It is in how the letters are built.
What the rules already require
Federal rules set the content of a denial but not its shape. In Medicare Advantage, the notice must give specific reasons and explain the right to a reconsideration, including how to request a faster one. In Medicaid managed care, the notice must give the reasons and tell the enrollee of the right to free copies of the records behind the decision. Those records include “medical necessity criteria,” under 42 CFR § 438.404(b).
Since January 2026, CMS’s interoperability and prior authorization rule has also required payers to give providers a specific reason for each denial, according to CMS’s fact sheet. The Prior Authorization API that payers must run by January 2027 will carry those reasons electronically.
None of these rules says what a specific reason looks like. A letter can satisfy the words of the rule and still leave a clinician unable to act. “Not medically necessary based on plan criteria” is a reason in form. It does not say which criterion was missed or what evidence was absent. Nor does it say what would change the answer.
A note, not a form
A clinical note has a structure every clinician knows. It moves from what the patient reported to what the examiner found. Then it gives an assessment and a plan. A denial letter can follow the same order.
- What was asked. The service requested and the condition it was meant to treat, in the words of the request.
- What was reviewed. The records the reviewer read, and anything the reviewer looked for and did not find.
- The assessment. The specific criterion that was not met, quoted from the published policy, with its version.
- The plan. What would change the decision, and how and when to ask for an appeal.
- The signature. The reviewer’s role and specialty, the way a note carries its author.
The difference shows clearly side by side.
| Part | Form letter | Letter written like a note |
|---|---|---|
| What was asked | “Your request for services” | “MRI of the lower back for pain that began 4 weeks ago” |
| What was reviewed | Not stated | “Office notes from 2 visits. No record of physical therapy” |
| The assessment | “Not medically necessary” | “Policy 4.2 calls for 6 weeks of conservative care before imaging, unless a warning sign is present” |
| The plan | “You may appeal this decision” | “Send therapy notes or a documented warning sign, and the request will be reviewed again” |
An illustrative example, not a real case or a real policy.
The plan is the part most letters leave out, and it matters most. A clinician who reads “the request did not include results of a trial of physical therapy” knows what to send. A clinician who reads “not medically necessary” knows only that the answer was no.
A denial that says what would change the answer starts a conversation. A denial that does not ends one.
The signature matters too. In Medicare Advantage, a denial based on medical necessity must be reviewed by a physician or other appropriate professional with expertise in the field, as our piece on talking peer to peer before a denial described. A letter that names the reviewer’s specialty shows that the rule was followed. It also tells the treating clinician who to ask for.
Why the shape matters
The appeal numbers make the case. Medicare Advantage organizations overturned 75% of their own denials that were appealed during 2014 through 2016, according to the same OIG report. Only 1% of denials were appealed at all. A large share of denials that no one contested may have been just as fixable.
A letter that states the missing evidence turns some of those denials into a resubmission instead of an appeal. That is faster for the patient and cheaper for both sides. It also makes the denial easier to check, for the clinician who receives it and for the auditor who samples it later.
The structure helps patients as well. A letter that follows the order of a note can be read in plain language from top to bottom. The patient learns what was asked and what the plan decided. The letter then says what to do next. Our piece on publishing coverage criteria like code argued that criteria should be precise enough to test. A letter that quotes the exact criterion not met puts that precision in front of the person it affects.
There are fair objections. Plans worry that a detailed letter invites argument, and that quoting criteria exposes proprietary content. But Medicaid rules already give enrollees the right to the criteria on request, and the 2024 rule already requires a specific reason. The question is only whether the reason arrives in a form someone can use.
Redlake builds tools that health plans use in utilization review. A machine can say yes, but only a person can say no. The denial letter is that person’s note. Every recommendation shows its reasons, so the reasons are already there when a reviewer decides. Writing them down in the order a clinician expects is the last step, and it should not be the hardest one.