I am sorry to read of your problem with the insurance company. You took the appropriate next step and sought out an independent review through your state department of insurance. These reviews -- available in most states -- favor the consumer over the insurance company more than one-third of the time. Sometimes an insurance company will go ahead and approve the coverage rather than go through the review process.
One third of the time is not the best of odds............... You are right, the next step would be to hire a lawyer and that is not cheap.
Thinking of you and hoping you come up with a solution.