For many patients and clinicians, prior authorization is the process behind the letter saying an insurance company will not cover a medication, procedure, or service unless additional criteria are met. 

SHP’s Michelle Mello, JD, PhD, explains this system is already difficult, time-consuming, and often painful for patients and care teams. Now, artificial intelligence is beginning to reshape how these decisions are made. 

In this episode of The Future of Medicine, Mello and host Euan Ashley, MD, chair of the Stanford Department of Medicine, discuss how insurers and healthcare systems are using AI in prior authorization, billing, appeals, and utilization management. AI may be able to speed up routine approvals and reduce administrative burden, but it also raises serious questions about transparency, bias, accountability, and whether patients are being protected from wrongful denials. 

The conversation explores what Mello describes as an “arms race” of AI systems, with insurers using technology to evaluate requests and health systems using their own tools to identify denials most likely to be overturned and draft stronger appeal letters. She also explains why appeals matter: a large share of insurance denials can be reversed, but many health systems do not have enough staff to appeal every case. 

Together, Mello and Ashley consider what responsible AI governance should look like in health care, why simply banning AI may not solve the underlying problems, and how AI could be used in ways that support patients, clinicians, and fairer decision-making. They also discuss the need for greater transparency from insurers, the role of private governance, and why academic medical centers have a responsibility to help shape the safe and ethical use of these tools.