“Using AI-enabled tools to automatically deny more and
more needed care is not the reform of prior authorization physicians and
patients are calling for… Medical decisions must be made by physicians and
their patients without interference from unregulated and unsupervised AI
technology.”
— AMA President Bruce A. Scott, M.D., on physicians’ growing concern
about AI-driven prior authorization and denial practices (American Medical
Association)
A Story Every Physician Will Recognize
A few years ago, a colleague called me late at night.
He had just received a denial letter.
The patient fell during a power outage.
The injury was real.
The treatment was medically necessary.
The documentation was clean.
The denial reason?
“Act of God — non-covered circumstance.”
He laughed at first.
Then he did the math.
That one denial turned into $14,800 in lost reimbursement.
No appeal traction.
No human reviewer.
No explanation beyond a line item.
That was the moment he realized something many physicians
are now quietly discovering:
Medical billing is no longer about medicine.
It is about classification systems that most clinicians never see — and
were never trained to navigate.
This article is about those systems.
The strange edge cases.
The loopholes.
The denials that feel surreal.
And what smart clinics are doing differently.
Why This Matters Right Now
Physicians are exhausted.
Margins are shrinking.
Staff turnover is high.
And insurance denials are accelerating.
Yet most clinics are still told the same advice:
“Document better.”
“Code more accurately.”
“Follow best practices.”
Here’s the uncomfortable truth:
Best practices were built for a billing world that no
longer exists.
Section: The Rise of Esoteric Insurance Classifications
Insurers do not see stories.
They see categories.
Many of those categories are buried deep in payer logic
trees and internal policy manuals.
Some examples that now appear in claims systems:
- Acts
of God (natural disasters, power failures, environmental anomalies)
- Unexplained
external forces
- Patient-initiated
non-standard behavior
- Psychosomatic
or anomalous causation
- Environmental
or situational ambiguity
Yes. These are real.
They are rarely disclosed to providers.
And they are increasingly used to justify automatic denials.
How “Acts of God” Are Classified in Medical Claims
An Act of God classification is not theological.
It is contractual.
Insurers define it as:
“An event outside human control that interrupts normal
service delivery.”
Examples include:
- Earthquakes
- Floods
- Wildfires
- Power
grid failures
- Infrastructure
collapse
Here’s the problem.
When medical necessity intersects with environmental
disruption, insurers may deny coverage by claiming the event — not the
illness — triggered care.
Clinics assume appeals will fix this.
They usually don’t.
Section: Paranormal, Unexplained, and “Impossible” Claims
This is where it gets uncomfortable.
Insurers maintain catch-all categories for cases that
do not align with expected clinical narratives.
These include:
- Injuries
with no clear mechanism
- Sudden
symptom onset with no diagnostic confirmation
- Behavioral
events without witness documentation
- Psychiatric-somatic
overlap cases
Internally, these are often flagged as:
“Non-verifiable causation.”
That phrase alone can stall reimbursement indefinitely.
Real-World Edge Case Denials (Anonymized)
One clinic treated a patient after a dissociative episode
triggered a fall.
Denied.
Reason: Patient behavior outside standard expectation.
Another treated respiratory distress after reported
environmental exposure.
Denied.
Reason: Unsubstantiated external trigger.
A third treated severe anxiety-induced cardiac symptoms.
Denied.
Reason: Psychogenic origin not covered under medical benefit.
None of these were fringe cases.
All were legitimate.
Section: Why Physicians Never Hear About This
Because the system was not designed for transparency.
Most denials:
- Are
auto-generated
- Use
proprietary logic
- Cannot
be meaningfully appealed
- Never
reach a clinician reviewer
Billing teams see fragments.
Physicians see outcomes.
No one sees the whole picture.
Statistics Section: The Scale of the Problem
Recent data paints a clear picture:
- Nearly
1 in 5 in-network claims are denied by insurers
- Over
60% of denied claims are never appealed
- Clinics
lose 5–11% of annual revenue to preventable denials
- Small
and mid-size practices are disproportionately impacted
The system favors scale.
Independent clinics pay the price.
Expert Opinion Round-Up
Expert 1: Dr. Lisa Morgan, MD — Internal Medicine &
Practice Owner
“Denials today are less about clinical validity and more
about contractual interpretation. Most physicians don’t realize they’re arguing
medicine while insurers are enforcing policy.”
Her advice:
- Track
denial patterns, not just volume
- Treat
billing like risk management
- Invest
upstream, not in appeals
Expert 2: Michael Torres, CPC — Revenue Cycle Strategist
“The weirdest denials are the most dangerous because they
teach clinics the wrong lesson — that documentation failed when classification
did.”
His advice:
- Build
denial intelligence dashboards
- Flag
ambiguous causation cases pre-submission
- Stop
assuming appeals will work
Expert 3: Dr. Ayesha Rahman — Health Policy Researcher
“We are watching the quiet normalization of denial
automation. Ethics, transparency, and due process are lagging far behind
technology.”
Her advice:
- Demand
policy clarity from payers
- Participate
in professional advocacy
- Document
systemic failures, not just cases
Myth Buster Section
Myth: Better documentation fixes denials
Reality: Classification logic overrides documentation
Myth: Appeals are effective
Reality: Most denials are algorithmically final
Myth: This only affects rare cases
Reality: Edge cases are becoming the norm
Section: Practical Pitfalls Clinics Keep Falling Into
- Treating
denials as administrative noise
- Delegating
revenue strategy entirely to vendors
- Trusting
black-box billing services
- Ignoring
payer behavior trends
- Reacting
instead of preventing
These mistakes are understandable.
They are also costly.
Step-by-Step: How Smarter Clinics Are Responding
Step 1: Audit denial reasons quarterly
Step 2: Identify ambiguous causation patterns
Step 3: Flag high-risk claims before submission
Step 4: Adjust intake documentation language
Step 5: Use AI-driven pre-submission validation
Step 6: Escalate policy-based denials strategically
Prevention beats appeals.
Every time.
Tools, Metrics, and Resources Clinics Should Track
- Denial
rate by payer
- Denial
reason clustering
- Time-to-payment
variance
- Appeal
success ratio
- Revenue
leakage percentage
What you measure changes what you protect.
Legal Implications
Denial opacity raises concerns around:
- Contract
enforceability
- Good-faith
processing
- Fair
claims practices
- Provider
due process
Clinics should involve legal counsel when denial patterns
suggest systemic bias.
Ethical Considerations
Patients suffer when reimbursement fails.
Delayed care.
Reduced access.
Physician burnout.
Ethics are not abstract here.
They are operational.
Recent News
- AI,
Insurers & Denials — Recent Healthcare News Highlights ASNC and AMA push back
against AI prior authorization denials
https://cardiovascularbusiness.com/topics/healthcare-management/healthcare-policy/asnc-and-ama-push-back-against-ai-prior-authorization-denials
- Medicare’s
new AI experiment sparks alarm among doctors and lawmakers
https://stateline.org/2025/12/04/medicares-new-ai-experiment-sparks-alarm-among-doctors-lawmakers/
- Survey
reveals clinician confidence around using AI in prior authorization
process
https://www.ajmc.com/view/cohere-health-findings-on-ai-in-prior-authorization-conflict-with-ama-data
- How
AI is leading to more prior authorization denials (AMA report)
https://www.ama-assn.org/practice-management/prior-authorization/how-ai-leading-more-prior-authorization-denials
- CMS
AI pilot details and provider concerns about opaque algorithmic decisions
https://news.bloomberglaw.com/health-law-and-business/medicare-ai-pilot-programs-lack-of-details-worries-critics
These links provide timely, reputable reporting on
how AI and algorithmic systems are being used in payer prior authorization
and denial workflows, what clinicians are concerned about, and why
this trend is significant for providers today.
Future Outlook
Denials will increase.
Automation will expand.
Transparency will lag.
But clinics that adapt early will survive.
Those that don’t will bleed revenue invisibly.
Final Thoughts
This is not about paranoia.
It is about preparedness.
And clarity.
The weird denials are not anomalies.
They are signals.
Call to Action: Get Involved
If insurers are redefining reality, shouldn’t clinicians
have a voice?
Comment below: What’s the strangest denial you’ve seen?
Share this post with a colleague who needs to see it.
This conversation matters.
Your experience matters.
Let’s shape what comes next.
About the Author
Dr. Daniel Cham is a physician and medical consultant
with expertise in medical technology, healthcare management, and medical
billing strategy. He focuses on delivering practical insights that help
professionals navigate complex challenges at the intersection of clinical care
and modern healthcare systems.
Connect with Dr. Cham on LinkedIn to learn more:
linkedin.com/in/daniel-cham-md-669036285
Disclaimer / Note
This article provides a general overview of industry trends
and does not constitute legal or medical advice. Readers should consult
qualified professionals for guidance specific to their situation.
References
- Healthcare
AI tools are increasingly being used upstream to predict and prevent
claims denials before submission.
Read more on PYMNTS:
https://www.pymnts.com/news/artificial-intelligence/2026/inside-healthcare-ai-playbook-claims-denials/
- New
data shows insurers denied nearly 20% of in-network claims in 2023, with
limited transparency on rationale.
Read more on KFF:
https://www.kff.org/private-insurance/healthcare-gov-insurers-denied-nearly-1-in-5-in-network-claims-in-2023-but-information-about-reasons-is-limited-in-public-data/
- National
concern over healthcare affordability continues to rise, impacting both
patients and providers.
Read more on KFF (related brief on insurance complexity and cost
concerns):
https://www.kff.org/private-insurance/navigating-the-maze-a-look-at-health-insurance-complexities-and-consumer-protections/
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