Your daughter has a right to bring a claim against the hospital, until her 20th birthday.
AZ has a 2 year statute of limitation, but for minors (under 18), they have until their 18th birthday plus 2 years
They can “deny” anything they want. This is what insurance companies do.
You have a right to file a lawsuit to collect damages for their denial. That is the process under our system of laws where you can get a fair hearing, and justice, if you can prove your damages.
A lawsuit is initiated by filing a “complaint” in court
If you are seeking to sue a hospital for malpractice, I strongly recommend having an experienced attorney
These can be very difficult and complicated cases
If you have an attorney, you should discuss this issue with your attorney.
This is very normal, and may not be exactly as you suspect it to be
If you are not represented, please feel free to call me, and I will be happy to explain this to you (no charge and no obligation)
This is not an easy question. Generally, if the injury occurs from a known risk of the activity, the waiver my hold up in court. The fact that your child is a minor (I presume) might change this outcome.