Independent evidence reviews lead to fewer health insurance denials of claims.

getty

In New York state, large numbers of insurance denials were overturned when independent clinical experts got involved in reviewing cases. This suggests ideas for possible reform of claims evaluations and the use of prior authorization by insurers.

Over a six-year period between 2019 and 2025, almost half of a large set of denied health insurance claims in New York state were reversed when the cases reached independent review organizations, comprised of clinicians unaffiliated with insurers. The study published in JAMA Internal Medicine also demonstrates how persistence in appealing denied health insurance claims paid off for patients and doctors, as nearly 80% resulted in overturned decisions.

For prescription medicines, prior authorization is often required for brand-name drugs that have a generic available, as well as high-cost therapeutics, whether branded or generic. Here, the restriction implies that a healthcare provider or patient must obtain pre-approval from a health insurer before the plan commits to covering a specific medical service, treatment or prescription. From the perspective of health plans, this process ensures that only treatments deemed “medically necessary” will be covered.

Across all markets in the healthcare system—commercial and public—health insurers issue millions of claim denials based on prior authorization every year. Patients can request medical exemptions or appeal plan decisions, but the process is often complicated and cumbersome. NBC News reported that some patients are “stuck in prior authorization” purgatory as they “run out of time or treatment options.” An Office of Inspector General memorandum published in 2022 pointed to instances in which Medicare Advantage plans incorrectly denied beneficiaries’ access to services even though they met coverage rules.

Writing in HEALTH CARE un-covered, advocate for health insurance payment reform and former executive at the Cigna insurer, Wendell Potter, critiqued a model being implemented this year by the Trump administration. The demonstration project is dubbed WISeR for Wasteful and Inappropriate Service Reduction. The Centers for Medicare and Medicaid Services is contracting with private, for-profit entities to deploy artificial intelligence to assess the appropriateness and necessity of care for many seniors enrolled in traditional Medicare. An ongoing investigation suggests the model is leading to delays in care and even denials in some instances in each of the six states it is being piloted.

Independent of WISeR, Medicare Advantage insurers have been using prior authorization extensively, sometimes with the help of AI, subjecting hundreds if not thousands of procedures and technologies to utilization restrictions. By contrast, traditional Medicare uses prior authorization sparingly, for only 52 outpatient medical services, some durable medical equipment, and repetitive scheduled non-emergent ambulance transport.

Faced with criticism about coverage conditions, health insurers, including Medicare Advantage plans, are promising fixes to the ways in which prior authorization is implemented. Representatives from several major plans said last summer they had pledged to the Department of Health and Human Services they would improve pre-approval protocols for diagnostic and screening tests, prescription medications and hospital or clinic procedures. The companies vowed to reduce the number of claims subject to prior authorization, standardize electronic requests for exemptions and appeals and resolve 90% of requests in real time by 2027. They also expressed hope that AI would facilitate a more efficient set of “patient-friendly” decision-making processes.

When CMS Administrator Mehmet Oz was asked in 2025 why he thought this effort by the industry could work when others have failed, he responded by saying that the technology is better now and the administration plans to back the efforts with regulation. “Either you fix it, or we’ll fix it,” Oz told insurance company executives.

Oz was probably referring to executive branch actions but also bills that have been introduced by Democrats and Republicans alike which specifically target Medicare Advantage insurers. The proposals focus on standardizing prior authorization procedures and increasing transparency of and reporting on decision-making. This includes requiring insurers to provide detailed clinical reasoning to justify use of the management tool. Additionally, the introduced legislation looks to mandate clear timelines for the processing of medical exemptions and appeals.

Possibly to preempt legislative action, organizations representing health plans released data last month that suggests they’re complying with lawmaker and administration demands. The industry-based survey reveals that since last year, requests for prior authorization have declined by 11%, including a reduction of more than 15% in Medicare Advantage. It’s unknown, however, whether the denial rate has decreased. Nor is it clear whether physicians unaffiliated with health plans were carrying out independent clinical reviews to specify appropriate prior authorization protocols and determine the status of appeals.

Decades ago, when prior authorization was first introduced, it was mostly deployed to ensure medicines were being administered to or taken by the right patient for an appropriate indication. To some extent, this holds true today, too. Prescription medications tagged with prior authorization can have potential safety concerns, including things like drug-drug interactions which prescribers and patients need to be aware of. Additionally, certain drugs should only be prescribed to patients who’ve been identified through biomarker testing as being likely to respond positively or unlikely to suffer from an adverse reaction. In these instances, prior authorization is essential.

And so, ideally prior authorization can optimize the use of healthcare services and technologies. If deployed judiciously, such policies are intended to be checks on overutilization. In this context, insurers may nudge physicians towards prescribing less costly alternatives that are therapeutically equivalent. But this presumes the treatment options health plans favor work as well or better than the intervention placed under prior authorization protocol. Moreover, imposing such a prerequisite can increase the administrative burden on both doctors and patients, delay care or result in no treatment at all, which may in turn lead to worse health outcomes and greater costs in the long run.

What’s more, even in the short term, plans may not actually save that much money by instituting prior authorization as it doesn’t ultimately prevent that many patients from accessing services or products. To illustrate, upon appeal, of 35 million prior authorization requests to Medicare Advantage plans in 2021, 82% were reversed.

Perhaps there is a way forward for prior authorization that would make it more palatable to patients and healthcare providers alike. The Center for American Progress maintains that “independent clinical reviews” ought to replace standard prior authorization protocols. Policymakers writing for the Center express concern that prior authorization may result in delays in care and even outright denials of coverage.

To reform claims evaluations and the use of prior authorization, policy experts envision requiring that coverage decisions be supported solely by evidence-based medical criteria being reviewed by independent clinicians.