Sanford Health Plan presented the results of a calendar‑year 2024 review of prior authorization activity for the PERS uniform group insurance plans, telling the Employee Benefits Program Committee on Oct. 7 that prior authorization requests represented about 3% of total paid claims and that most requests were approved.

“Prior authorization refers to medical services, treatments or medications that require previous approval, prior to being administered or prescribed,” Chief Clinical Officer Julie Smith told the committee, explaining Sanford’s utilization management process. Sanford said licensed clinicians—registered nurses and practicing MDs—complete medical prior authorization reviews; pharmacy reviews are conducted by pharmacists and pharmacy technicians.

Sanford reported 8,378 prior authorization requests during 2024 out of roughly 612,000 paid claims. Of those, about 5,163 were medical (roughly 90% approved, 10% denied) and about 3,215 were pharmacy requests (about 1,352 approved and 1,863 denied). Sanford told the committee that a high share of pharmacy denials reflects missing supporting documentation—roughly 20–25% of pharmacy prior‑auths come without clinic notes or required paperwork—and a large volume of requests for GLP‑1 drugs (brands such as Ozempic and Wegovy) for weight‑loss indications; Sanford covers GLP‑1s for diabetes, not for weight loss.

Committee members pressed Sanford on prediabetes and other emerging clinical uses. Smith said the plan and its actuaries have examined broader coverage but that current independent analyses indicate the drug prices do not yet generate net savings when downstream costs are factored in. “I anticipate that there’s changes coming in the industry in terms of GLP‑1 pricing,” she said.

Sanford described the appeals pathway: internal review first, then an external independent review organization (IRO) if the denial stands. Of approximately 2,386 total denials in 2024, Sanford said 552 were appealed; 364 of those were overturned internally after supplemental documentation was supplied and 24 were overturned by external IROs. Sanford emphasized that many internal overturns resulted from additional documentation submitted with the appeal.

The plan provided a breakdown of common denial reasons: “policy criteria not met” (for example, a specialty medication where lower‑cost treatments must have been tried first), “administrative benefit denial” (exclusions such as GLP‑1s for weight loss), and medical necessity criteria for imaging and other services (for example, conservative treatment required before MRI for low‑back pain unless “red flag” symptoms exist).

Sanford also reported cases where the plan has denied out‑of‑state residential substance‑use facility placements because of fraud and compliance concerns; in those instances Sanford’s care management team worked to place members in compliant local facilities and noted denials were not always a judgment about medical necessity but sometimes about facility compliance.

The Insurance and Securities Department deferred presentation of raw data to Sanford during the committee meeting but was present to answer procedural questions. A provider representative, Nathan Swahovick of Accenture/Essentia Health, offered public comment supporting prior authorization reform and described a personal case in which an MRI was initially denied until additional steps were taken; he said reforms supported quicker access to the right care.

Committee members asked Sanford to follow up on several items, including counts of denials tied to specific clinical categories, IRO vendors used, and whether data can be segmented by member groups; staff also discussed federal interoperability rules that will push plans toward more electronic prior‑authorization processes.

Sanford said prior‑authorization transparency materials are available on its provider portal and member website and that the plan will continue quarterly executive summaries to the PERS board showing utilization and savings.