FYI I did some checking and federal DOL claims regs note that an authorization request for x hours of testing is considered a “pre-service claim.” The allowance of less than x hours approved is considered an “adverse benefit determination.” All adverse benefit determinations may be appealed in writing.
You don’t say how much money is involved for an evaluation that X college would expect to see, but these things tend to come down to a choice between doing what’s best for the kid and arguing with whichever parties later over $$$ or whatever else. You can spend a lifetime pointing to what an insurance contract provision, statute, regulation or rule says *should *happen and that may not matter. Typically, it’s a “make me” proposition, whether you’re dealing with a school, an insurance company or a court (judges). 
I’d like to think you’re involved with a network of parents similarly situated, who’d be in a far better position to relay what worked for them, and may even have a tip on local level as to which attorney(s) have been able to produce effective results with a minimum of fuss (e.g., nasty note to whomever).
Plenty of kids are crappy at testing and crappy at studying; that doesn’t mean, as you point out, that the kid isn’t brilliant and can’t learn. I’d posit that Bill Gates and Thomas Jefferson and Einstein, et al. kinda managed to do ok without all sorts of special ed support. What concerns me is the “want to know what’s wrong” message as though there’s a “fix”. That might need … some evaluation.