Spring 2026 Update

Recent Trends in the Industry

Health Plans Not Paying Authorized Claims

Despite prior authorization being a standard requirement for many medical services, healthcare providers and patients continue to face significant challenges when health plans fail to pay authorized claims. Prior authorization is intended to confirm medical necessity and coverage before services are rendered.  Utilization review extends that process, and assesses continuing care on an ongoing basis, to ensure that approved care continues to meet medical necessity standards. Sending in approved claims should be a final simple step in the process to getting paid.  However, we are seeing new trends where facility claims are approved for longer periods, but denials,  delays, and “mistakes” (nearly always resulting in non-payment)  are occurring at an increased frequency.

Common Issues

  1. Request for more information:   Health plans may deny payment, citing that they need more information.  Though their explanations are supposed to be specific in what they request, such as medical records from time x to time y, the written responses are often vague and require further communication.   This requires time consuming follow up, including phone calls or online chats.  While phone calls can be faster, online chats allow you to cut and paste the response, and keep an ongoing written record of what you were told, which is helpful when appealing denials.
  2. No Explanation Provided:  Often, neither the provider nor the clients hear back on the status of a claim.   Most plans are allowed 30-45 days to respond.   Payments that occur within that timeframewithout further action are increasingly becoming the exception.  Sometimes the claims are sitting in a kind of limbo, waiting to see if someone will call and follow up.   The explanation we get is: “Oh, I see the claim, I will forward it on for processing, please allow an additional 30 days.”  This is an unacceptable response.  Request an escalation.  If you are in a fully funded plan, some states (NY, CA) require that plans pay with interest on all late claims.
  3. Retrospective Review: Insurers sometimes conduct post-service reviews and retroactively deny claims after reviewing records, asserting that the records did not meet their standards.  When sending in records, always make sure that the member’s name and DOB is on every page.  Include the treatment plan and progress notes from all licensed providers.  Filter by date, and provide the dates they request.  Make sure notes are e-signed by the licensed provider and dated.
  4. Administrative Errors:  Occasionally we get denials for things like “this service was not authorized,” or “you have no out of network benefits,”  or “please provide the provider ID”, that simply are not true, or were already provided.  Always make sure the authorization number is clearly written on the claim.  Verifying benefits in advance is sometimes helpful.  Stay on these “errors.”
  5. Failure to pay the correct party:  Most claim forms have a box to indicate whether the claim should be paid to the member or the facility.  We have had repeated problems with this issue, often the wrong party will be paid repeatedly, even after we have called to flag this issue.  Sometimes a facility will be paid in a format that they have not agreed to, such as by credit card or voucher, which puts service charges on the receiving party.   Some plans allow you to specify preferred mode of payments, but sometimes these requests get ignored.
  6. Losing documents: This happens much too often.  We submit the claim via a clearinghouse, only to be told that there is no record of it.
  7. Changes in policy: Health plans may update coverage policies or criteria after authorizations are granted, leading to claim denials for services already rendered.  We’ve seen this in the form of “noout of state benefits permitted.” It is often hidden deep in the manual, and sometimes missed in verification of benefits.
  8. Failing to pay, even after an appeal or external review overturn.   We’ve had this experience several times.  Stay on them, and bring in the regulator.  For self-funded plans, bring in the employer and the US Department of Labor.  In CA, there are steep fines against the plan for this practice (up to 10K a day!).  That ought t get their attention!!

Impact on Providers and Patients

Unpaid authorized claims create financial strain for providers, increase administrative burden, and may result in patients receiving unexpected bills or delayed care. Providers must often navigate complex appeals processes to secure payment for services that were pre-approved.  We can help.

Addressing the Issue

Efforts to address this issue include:

  • Advocating for regulatory reforms to hold health plans accountable for honoring authorizations.
  • Implementing robust documentation and verification processes within provider organizations.
  • Leveraging technology to track authorizations and flag discrepancies before claim submission.

Conclusion

The failure of health plans to pay authorized claims undermines trust in the prior authorization process, disrupts care delivery, and places undue burden on both providers and patients. Stakeholders continue to seek solutions through policy advocacy, operational improvements, and increased transparency in payer practices.