Prior authorization, coding and payer AI: what the evidence shows
Algorithms that insurers and their contractors use to approve, limit or deny coverage, and tools that health systems use to code visits and handle prior authorization paperwork.
Insurers use algorithms to speed prior authorization and utilization review. In 2024 guidance, the Centers for Medicare & Medicaid Services (CMS) said Medicare Advantage plans may use AI in coverage determinations but that an algorithm deciding coverage from a larger data set instead of the individual patient's history, physician recommendations or clinical notes would not comply with federal law, according to a legal analysis in npj Digital Medicine. CMS has also said a physician or other appropriate health care professional with expertise must review medical necessity before a plan issues a denial, the analysis says, and it notes California's Senate Bill 1120, which sets requirements for plans that use AI in utilization review.
CMS's WISeR (Wasteful and Inappropriate Service Reduction) model brings AI-assisted prior authorization and prepayment review to traditional Medicare in six states from Jan. 1, 2026, through Dec. 31, 2031; CMS says licensed clinicians will determine nonpayment recommendations and participating companies will receive a share of savings, a commentary in the American Journal of Medicine Open said. A 2026 systematic review found 16 studies of AI in real prior authorization workflows; most reported technical metrics, few showed operational gains, and patient-centered outcomes were rarely evaluated.
The tools reviewed in this category
General information, not medical advice. Every fact links to its source, and the page shows the date it was last reviewed.