The problem, according to Horizon Blue Cross, was that Park Nicollet initially sought prior authorization for the wrong procedure. That requested surgery didn't need advance approval. However, it was required for the treatment Knirk actually received in March 2023. This was a "misstep by Park Nicollet," the insurer said, that delayed the usual process to confirm coverage ahead of time.

"Delays in obtaining additional medical records necessary for this after-the-fact review resulted in the subsequent appeal remaining open until those records were located and reviewed," the insurer said in a statement to the Star Tribune. "The claim has been approved and was processed for payment."

Bloomington, Minnesota-based HealthPartners, which runs Park Nicollet, disputed this explanation, saying: "We were never denied for a coding or authorization error." The real problem, HealthPartners said, was a significant delay in the appeals process due to what it called a "clerical error" at Blue Cross.

"We remained in contact with BCBS and Christine until BCBS found the misfiled appeal in December," the health system said in a statement to the Star Tribune. "We shared timely clinical information with BCBS to support the medical need for her procedure."

For decades, there have been disputes between health insurers and health care providers over claims denied due to findings on the medical necessity.

Yet experts say there's still a lack of comprehensive public data on the frequency of medical necessity denials vs. other reasons, particularly when it comes to employer-sponsored coverage.

This week, the consulting firm Kodiak Solutions presented data to the American Hospital Association showing initial denials from health insurers have increased significantly in recent years, growing from 1.2% in 2020 to 1.7% in 2023. The report noted increases across several different types of insurance, particularly for inpatient care.

AHIP, the national trade group for insurers, didn't comment on these numbers, but said such figures can be misleading when studies don't specify how many claims were studied or provide context on why denials occurred.

Insurers can deny claims when health care providers don't provide supporting clinical documentation to justify payment in a timely manner, said Robert Traynham, executive vice president of public affairs at AHIP. Payment might be denied to address fraud, waste and abuse, such as when there are duplicate requests, he said.

And some denials are paired with approvals of alternate therapies that better fit clinical guidelines. That can happen, for example, if a health insurer approves a four-day hospital stay when seven days were requested.

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