How Health Insurers Use Prior Authorization Algorithms to Delay Care

Episode 47 of Services Economy with Fexingo dives into the opaque world of prior authorization algorithms. Lucas and Luna examine how health insurers are deploying machine learning models to automatically deny or delay coverage for medical procedures, a practice that affects millions of patients each year. Lucas breaks down a 2025 study from the American Medical Association showing that prior authorization requests grew by 25 percent year-over-year, with AI-driven denials increasing at twice that rate. They discuss the specific case of Anthem's automated review system, which flagged a routine MRI for a patient with chronic back pain as 'not medically necessary' based solely on a database of claims averages, ignoring the patient's unique history. Luna shares data from a Kaiser Family Foundation report revealing that appeals overturn only 12 percent of AI-denied claims, compared to 38 percent for human-reviewed denials. The conversation also explores how regulators are pushing back, including a proposed CMS rule from April 2026 requiring insurers to disclose algorithmic decision-making criteria. This episode pulls back the curtain on the hidden cost of efficiency in healthcare administration. #PriorAuthorization #AIinHealthcare #HealthInsurance #AlgorithmicDenials #MedicalBureaucracy #HealthcareCosts #Anthem #MachineLearning #PatientAdvocacy #CMS #HealthcarePolicy #KaiserFamilyFoundation #AMA #DataEthics #ServicesEconomy #FexingoBusiness #BusinessPodcast #Insurance Keep every episode free: buymeacoffee.com/fexingo