The $50 Billion Problem Nobody's Solving
Why self-funded employers leave billions on the table in denied health claims — and what technology can do about it.
Roughly 65% of American workers with employer-sponsored health insurance are covered by self-funded plans. When a claim is denied under one of these plans, the employer ultimately bears the cost of that decision — whether or not the denial was correct.
The appeal rate for denied claims is staggeringly low. Most estimates put it under 1%. Of the appeals that are filed, a significant percentage are overturned. The math is simple: employers are leaving money on the table because the appeal process is too difficult, too opaque, and too time-consuming.
Why appeals don’t happen
- Knowledge gap. HR teams manage benefits administration, not clinical appeals. They don’t have the medical or regulatory expertise to construct a compelling appeal.
- Time pressure. Appeal deadlines are strict (often 180 days for external review), and HR teams are already stretched thin.
- Complexity. Each denial requires understanding the specific clinical rationale, the plan language, applicable state and federal regulations, and the relevant medical evidence. This is specialist work.
- Learned helplessness. After years of denials going unchallenged, many employers simply accept them as a cost of doing business.
Where technology fits
AI can’t replace clinical judgment, but it can dramatically lower the barrier to filing a substantive appeal. Specifically:
- Denial parsing — automatically extracting the denial reason code, clinical rationale, and appeal rights from EOB and denial letters
- Appeal drafting — generating a clinically-referenced appeal letter tailored to the specific denial type, including relevant medical literature citations
- Regulatory mapping — identifying the applicable appeal rights under ERISA, state insurance law, and the plan’s own dispute resolution process
- Workflow management — tracking deadlines, managing documentation, and routing appeals to the right reviewer
These are the kinds of tools we build at Plyworks. Not replacements for benefits advisors and clinical reviewers — amplifiers for their expertise.
The opportunity
If even a fraction of wrongly denied claims were appealed, the recovered dollars would be measured in billions. For individual employers, the ROI on a single overturned high-dollar denial can pay for years of technology investment.
The tools to make this happen are now buildable. The question is who builds them — and whether they build for the people who actually need them.