What is the difference between an internal and an external appeal?

• A. Internal appeal is within the insurer; external appeal is reviewed by an independent body outside the payer.
• B. Internal appeal is automatic; external appeal is never allowed.
• C. Internal appeal only applies to medical necessity; external appeal applies to financial issues.
• D. Internal appeal is done by patients; external appeal by providers.

Answer: (A)

Internal review happens within the insurer’s own processes, using the payer’s staff and medical reviewers to reconsider a coverage decision. External review is handled by an independent party outside the payer, such as an independent review organization or a state-run body, providing an objective second look. This separation ensures that disputes can be revisited with fresh, unbiased evaluation after the insurer has had a chance to review it internally. In practice, you typically start with the internal process, and if you’re still not satisfied, you may pursue the external review for an outside determination.