Auto-Denials Are Medical Decisions. Last I Looked, Health Insurance Companies Do Not Have Medical Licenses.

The physician who signed that denial is accountable, and so is the system that generated it.

ProPublica published a piece on their Paper Trail Podcast this week that should concern anyone with a health insurance card in their wallet.

Quick summary: a man survives two suicide attempts within one week. He is admitted to an inpatient psychiatric facility. His insurer, Highmark Blue Cross Blue Shield, initially approves transfer to another facility. Later HBCBS denies coverage. The denial letter states he is not a danger to himself or others and his care is not medically necessary.

The full story is documented at ProPublica. Read it.

I have been in clinical practice long enough that mental health now represents close to half of what I manage. No physician who has spent meaningful time in that space reads this case and says deny. This was not a close call. This was not a gray area. This was a denial that would not survive a competent clinical review of the case.

The charitable read is that this was a billing or coding error that was never communicated clearly. If that is the case, say so. Pick up the phone. Send letters addressed to the correct adult patient and not, as occurred here, a nonexistent newborn. Poor communication in healthcare does not just create frustration. It creates harm. If an insurance company structurally embedded in the healthcare industry does not understand that unclear communication produces additional negative emotional responses in already-compromised patients and their families, that company is not competent to operate in healthcare industry. That is the charitable read. Simple incompetence is itself an unacceptable standard for the healthcare industry.

The less charitable read is that this was an auto-denial. A system-generated decision issued before a qualified physician reviewed the clinical record.

Under the ACA, adverse benefit determinations based on medical necessity are legally required to involve qualified clinical review by a clinician with relevant expertise. For a psychiatric admission that means a behavioral health clinician, not a general physician and not an algorithm. If an automated system rejected this claim as not medically necessary without a qualified behavioral health clinician reviewing the actual clinical record, that is a potential ACA violation, a potential state insurance regulation violation, and depending on the plan type, a potential ERISA violation.

If the denial went further and a physician signed off on it without genuinely reviewing the record, that physician is individually exposed. I am licensed in California. Under California’s Business and Professions Code § 2052, practicing medicine without a license is a criminal wobbler offense. As a misdemeanor it carries up to one year in county jail. As a felony, up to three years in state prison. If unlicensed practice causes great bodily injury or death, penalties increase significantly. Civil consequences include cease and desist orders, fines up to $25,000 per violation enforced by the Medical Board of California, and civil liability to harmed patients.

Every state has equivalent statutes. The physician who signs a medical necessity denial without reviewing the clinical record is not making a business decision. They are making a medical decision, and they are accountable for it as one.

Insurance companies operate under a fiduciary duty to their shareholders. Legal teams need to model the liability exposure of a denied claim that results in a completed suicide, a subsequent lawsuit, and a jury reading that denial letter out loud in open court. Auto-denials are not just clinically indefensible. They are a material financial risk that shareholders should be asking about directly. Making auto-denials illegal is not just humanitarian. It is actuarial.

The ProPublica piece exists to show that patients have a tool most of them do not know about. It is called an External Review. It is a legally protected right under the Patient Protection and Affordable Care Act, codified at Public Health Service Act section 2719 and implemented through federal regulations at 45 CFR 147.136. It applies to most non-grandfathered commercial health plans in the individual and group markets. If your plan was first sold or significantly modified after March 23, 2010, this right almost certainly applies to you.

The External Review determination is made by a certified independent review organization with no financial relationship with your insurer. Under CMS guidelines, that decision is binding on both you and the health plan. They cannot reverse it internally. They cannot appeal it. They pay.

In this case, an independent psychiatrist named Dr. Neal Goldenberg was assigned the file. He read everything the patient's wife submitted. Then he did something that should not be remarkable but is. He called her. Unprompted. To tell her he had read every page, he saw what she had done, he saw what her husband had been through, and he was approving the claim.

That is what a physician who takes the job seriously looks like.

Only 1 in 10,000 patients eligible for an external review files one. That number is not an accident. For a full explanation of how external review works, how to request one, and what makes a strong submission, read the companion Field Note here: DENIED! The Insurance Industry Already Bet You Won’t Appeal their Auto-Denial | Field Notes | Performance Medicine Physician Blog | SustainablePerformanceMD‍ ‍

Know the tool. Use it.