Michelle Mello on AI, Insurance Denials, and the Future of Health Policy

Dr. Michelle Mello, professor of law and health policy at Stanford University, joins The Future of Medicine for a conversation about one of the most frustrating and consequential parts of American healthcare: prior authorization. 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. As Dr. Mello 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, Dr. Mello and host Dr. Euan Ashley 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 Dr. 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, Dr. Mello and Dr. Ashley consider what responsible AI governance should look like in healthcare, 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. Thank you for watching! Subscribe for more conversations on groundbreaking medical science, health policy, and innovation. Links: Listen to the podcast: https://thefutureofmedicine.buzzsprou... Subscribe to our channel: @stanforddepartmentofmedicine Chapters 00:00 Intro to Health Policy 02:04 Stanford University 05:12 Academic Career Path 09:17 Insurer Cost Control 12:12 AI Market Response 14:20 AI Review Process ️ 15:59 AI Denial Tools 20:06 Policy Solutions 21:51 AI Knowledge Advantage 24:37 AI Patient Benefit 27:10 Future Work Direction 29:57 Rowing Discipline 32:08 Conclusion Remarks