Healthcare insurers deny up to 18% of prior auth requests
NEW YORK, UNITED STATES — Healthcare insurers denied between 12% and 18% of prior authorization requests across major government-subsidized health plans in 2025, with Marketplace plans rejecting the highest share.
Marketplace prior authorization denials hit 18%
The KFF analysis covered prior authorization data from insurers serving 25 million Medicare Advantage enrollees, 36 million Medicaid managed care organization (MCO) enrollees, and 10.8 million Affordable Care Act (ACA) Marketplace enrollees across the United States.
Medicare Advantage plans denied a standard 12% of requests, Medicaid MCOs denied 14%, and ACA Marketplace plans denied 18%.
Denial rates varied sharply by insurer within each market. In Medicare Advantage, Elevance denied 5% of requests while UnitedHealth Group denied 17%. In the ACA Marketplace, GuideWell denied 3% while Centene denied 25%, an eightfold difference within the same market segment.
Wide variation in denial rates across plans offering the same benefits suggests inconsistent medical necessity criteria, not just differences in patient case complexity.
High overturn rates signal flawed denials
Kaye Pestaina, a KFF policy researcher and co-author of the analysis, said the newly required data falls short of what patient advocates need to meaningfully assess insurer denial patterns.
“Because the information is aggregated across all items and services (except prescription drugs), with no breakdown about what types of services are being approved and denied, these statistics provide limited insight into insurers’ prior authorization practices,” Pestaina said.
High appeal overturn rates reinforce that concern. In Medicare Advantage, 67% of appealed denials were overturned; Medicaid MCOs reversed 47%; and ACA Marketplace plans approved 43% of appealed denials.
A 2024 Centers for Medicare and Medicaid Services (CMS) regulation required insurers to publicly post prior authorization data beginning in 2025, though a proposed 2026 rule would add service-category breakdowns and standardized counts, according to the KFF analysis.
When two-thirds of Medicare Advantage denials are overturned on appeal, the initial decision reflects a process problem rather than a genuine clinical dispute.
As prior authorization volumes continue to grow across U.S. health plans, many healthcare organizations are turning to healthcare outsourcing to manage the administrative burden. Some are also adopting artificial intelligence (AI) tools to automate submission tracking and flag denied claims that carry high appeal overturn probability.
The KFF data suggests a significant share of denied requests are reversible with proper documentation and follow-through.
For health systems absorbing the cost of building those cases, outsourcing prior authorization and appeals management through business process outsourcing (BPO) is an operational response that does not require a policy change.
Related news
- Healthcare AI automates prior authorization backwards: Oprox CEO · 9 Jul
- AI prior authorization faces bipartisan backlash in congress · 25 Jun
- CMS sets 2027 deadline as electronic prior auth pilot launches · 21 May
Disclosure: Outsource Accelerator uses AI tools in the backend of its editorial workflow. Every article is reviewed and verified by a human editor before publication.
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