If prior authorization is making it hard to get your medical innovation to patients, you’re not alone. And this problem is only getting worse. Insurers are increasingly using AI algorithms to quickly review and deny coverage, with denial rationales that lack transparency beyond a broad characterization of a medical innovation as “experimental,” “investigational,” or “unproven.” This lack of transparency, along with the complexity of insurers’ appeals process, make it difficult to reverse denials on appeal.
Prior authorization is a cost-control process that insurers sometimes impose for health care professionals to get claim approval before providing medical care to a patient.
According to recent scholarship from Indiana University (summarized in a University of Pennsylvania publication), insurers’ “[p]rior authorization processes . . . have been subject to scathing appraisal from numerous critics ranging from healthcare facilities and providers to federal health agencies and state insurance commissioners.” For example, the American Medical Association just released its 2025 annual survey of physicians regarding prior authorization, which found:
- 95% of physicians report that prior authorization delays access to necessary patient care
- 79% of physicians report that prior authorization at least sometimes leads to patients abandoning their recommended course of treatment
- 26% of physicians report that prior authorization led to a serious adverse event for a patient in their care
- 88% of physicians report that prior authorization leads to higher overall utilization of health care resources
Insurers’ use of AI is making the prior authorization process even harder to navigate. Approximately three-quarters of surveyed physicians said the number of prior authorization denials has increased over the last five years, and 60% of physicians are concerned that AI is increasing prior authorization denial rates.
According to Professor Jennifer Oliva of Indiana University, insurers have unfettered “authority to determine their own prior authorization and medical necessity criteria.” They also shield their AI algorithms from scrutiny, claiming “the algorithms are proprietary and protected by trade secret laws.” This makes it “impossible to divine and test” the value and accuracy of insurers’ AI algorithms reviewing prior authorization requests.
Insurers also create complex, time-intensive processes to reverse denials on appeal. Less than one percent of patients appeal insurance claims denials, and the AMA’s 2025 survey found that only 21% of physicians always appeal prior authorization denials. But if appeals are pursued, they are often successful. Professor Oliva reports that approximately half of private payer claim denials are ultimately overturned on appeal, and approximately 90% of denials by United Healthcare’s proprietary AI algorithm have been reversed on appeal.
HcFocus helps high-impact companies navigate the complex path to patient access and reimbursement. In our experience, the best way for medical innovators to avoid prior authorization denials is to set up appropriate and compliant processes upfront, using strategic pre/post claims tools designed to prevent “experimental,” “investigational,” or “unproven” denials. This upfront work limits friction and smooths the road to reimbursement.