Understanding Prior Authorization and Claim Denials: Two Common Types of Health Insurance Disputes

August 27, 2026

Health insurance disputes do not always begin the same way. Sometimes an insurance company refuses to approve treatment before it is provided. Other times, treatment has already been received, but the insurer later refuses to pay some or all of the claim. 

Although both situations may involve bad faith wrongful denial of health insurance coverage, they raise different issues and often occur at different stages of the claims process. Understanding the distinction between prior authorization disputes and claim denials can help policyholders better understand why coverage was questioned and how these disputes arise. 

Prior Authorization Claim Denials 

Some health insurance policies require you to get prior authorization for certain procedures, and, if prior authorization is not obtained, the health insurance company will not pay for the treatment. 

Prior authorization disputes commonly arise in connection with surgery, cancer treatment, rehabilitation services, specialty medications, long term care, and other medically necessary care. 

Claim Denials 

Other disputes arise after medical treatment has already been provided. 

Once a healthcare provider submits a claim for payment, the insurance company reviews the claim under the terms of the policy. If coverage is denied, reduced, or otherwise disputed, policyholders may be left with unexpected medical expenses while trying to understand the large bill they received.  

Like prior authorization disputes, claim denials can involve a wide range of medical services and often require a careful review of the policy and the insurer’s explanation for its decision. 

Why the Distinction Matters 

Although prior authorization disputes and claim denials occur at different stages of the healthcare process, both can affect a patient’s ability to obtain or pay for medically necessary treatment. 

Understanding whether a dispute arose before treatment or after a claim was submitted is often an important part of evaluating the issues involved. The timing of the dispute may affect the review process, the information considered by the insurer, and the options available to the policyholder. 

Understanding the Reason for a Denial 

An insurance company may claim to base its decision on the terms of the policy, medical necessity requirements, prior authorization rules, or other coverage provisions. Because every policy and every claim is different, the reason for a denial can vary from one situation to the next. 

Reviewing the insurer’s explanation alongside the language of the policy may help to identify the issues involved and determine whether additional review or other action may be appropriate. 

When a Coverage Dispute Becomes More Than a Denial 

Denials can arise for a range of reasons. Not every health insurance denial becomes a legal dispute. However, when a denial for coverage is unreasonable, it may be appropriate to seek legal guidance. 

Health insurance decisions can have real consequences. When medically necessary treatment is denied or delayed, an insured may be deprived of the medical care that is critically necessary to treat their condition and even save their life. 

If you believe your health insurance company has improperly denied coverage for medically necessary treatment or otherwise failed to honor the terms of your policy, contact the Law Office of Matthew L. Sharp for a free consultation.