Hey friends, Remember Biscuit the Corgi? he twisted his right ankle on a Tuesday, headlined Medical Billing 101 while we figured out what a hospital bill actually was. He's back, the ankle's worse, and before a single bill arrived this time, three companies had already overruled his doctor. He didn't hire them. He can't name them. His insurer is suspiciously friendly with all three. Today you meet them, and you learn the moves that make them back down. - Shivang
tldr; Your insurer doesn't always say no to your face. It pays other companies to do it. One handles your drugs, one your scans and surgeries, and one your lab tests. They're called benefit managers, and they get paid more when you get less. We'll meet all three through one corgi's very bad ankle, then cover how to actually play the game better.
So, Biscuit's ankle didn't fully heal. He stepped off a curb wrong, it ballooned, and Dr. Singh called for a scan, probably surgery, and a test to nail the dosing. Each one ran into a different company whose whole job is thinking hard about saying no.
So what even is a benefit manager?
A benefit manager is a company your insurer hires to run one corner of your care and keep spending down. It sits between you and the thing you need, checks your doctor's request against a rulebook it wrote, and decides whether your plan pays. It's a bouncer for a club you didn't know you were trying to get into.
It started as a halfway decent idea, which is the irritating part. In the early 1990s, employers tired of paying sticker price for drugs carved the drug coverage out of the plan and handed it to specialists who could haggle in bulk. Those became the pharmacy benefit managers, and the model spread to scans and lab tests. The mess underneath is real: drug prices are unhinged, scans get ordered like nachos, and a doctor can pick from more than 20,000 lab tests. A sane referee in the middle would help.
Hold onto one thing, because it's what separates the three. Two are bouncers. They don't touch the price of anything, they just stand at the door and decide if your scan or test gets in. The third, the drug one, is a bouncer and a cashier: it decides what's covered, rings you up, and keeps some of the change.
Who actually feels this
For patients, it's the wait and the runaround. Biscuit's scan took a three-day detour and a phone call before a machine could photograph a swollen ankle. He had the time and the stubbornness to chase it down, which is the only reason we get to follow him through all three doors. Plenty of people don't, and the system is quietly counting on that.
The AMA's 2025 survey found 93% of doctors say these delays hold up care, and 82% say patients sometimes abandon treatment they actually need. Every patient who gives up is money the plan keeps, and that's the part nobody at the benefit manager says out loud.
For the back-office crew that fights to get doctors paid (revenue cycle management, RCM if you collect acronyms), it barely existed thirty years ago and now eats the day. Asking permission got so heavy that 40% of practices now pay someone full-time just to wrestle approvals (AMA). And drugmakers' market access teams, whose job is getting a drug covered, can't win on a better drug alone; they pay for the shelf.
The part that should make you put your coffee down
The company deciding whether your care gets paid for is hired, and usually owned, by the company that has to pay for it.
Five of the six biggest pharmacy benefit managers are owned by companies that also own a health insurer. The same arrangement runs through the other two doors.
eviCore, the largest company gatekeeping your scans, belongs to Cigna. Carelon, second place, belongs to Elevance, the insurer still wearing its old Anthem name tag.
The same company writes the rulebook, enforces the rulebook, and pockets the savings when the answer is no. How is that fair and accepted?
So the referee deciding whether your treatment is "necessary" cashes checks from the team that saves money when the call goes against you. It’s like having a referee but ironically you can own the referee and create incentives that make it always give you a favorable ruling.
The three doors Biscuit walked through
Door 1: The radiology benefit manager: the bouncer for scans
A radiology benefit manager is the company your insurer pays to approve or reject the expensive pictures of your insides: MRIs, CT scans, PET scans, sometimes the heart and joint stuff too. Your doctor orders the scan, but the order doesn't go to a radiologist, it goes here first, and the answer comes back yes, no, or "try the cheaper thing and come back if it doesn't work." It sets no prices. The decision is the whole product. When Dr. Singh ordered Biscuit's MRI, this is the door it hit, and Biscuit's reward for a freshly fractured ankle was a three-day wait and a phone tree.
eviCore is the giant here, ruling on care for about one in three insured Americans (ProPublica). It doesn't get paid to be right, it gets paid to be cheap. ProPublica reported eviCore has promised insurers around three dollars saved for every dollar they spend on it, and that it runs a denial algorithm some insiders nicknamed "the dial," which can be turned toward more no's. After eviCore arrived in Vermont, imaging requests fell 16% and cardiology requests fell 38%, not because doctors got wiser but because they got tired of fighting and stopped asking. An exec called that the "sentinel effect," like a sheriff who keeps a town quiet just by parking out front. Carelon, the runner-up, has been sued for wrongly denying care, which it denies.
What usually trips a scan denial:
Advanced imaging (MRI, CT, PET) ordered before "conservative" treatment like rest or physical therapy has been tried
A repeat scan too soon after the last one
A pricey scan the rulebook thinks should have been a cheaper one first
Your new lever: If your plan is Medicare Advantage or Medicaid, a federal rule (CMS-57) that kicked in this year forces a prior-auth decision within 7 days, 72 hours if it's urgent, and a specific written reason for any no. Vague "not medically necessary" brush-offs are now against the rules. Hold them to it.
Door 2: The pharmacy benefit manager: the bouncer also working the register
The pharmacy benefit manager, or PBM, runs your drug coverage end to end. It builds the formulary (your plan's list of covered drugs), drops each drug into a payment tier (which sets your share at the counter), flags which drugs need pre-approval, and pays the pharmacy. It's the only one of the three handling real money directly, which is exactly where the fun starts. When Dr. Singh put Biscuit on a blood thinner after surgery, the PBM, not the vet, decided which version he got and what it cost him.
Three of them run about 80% of all U.S. prescriptions (Drug Channels Institute), and the ownership reads like a card trick where the same hand keeps turning up:
CVS Caremark, owned by CVS Health, which also owns the insurer Aetna
Express Scripts, owned by Cigna
OptumRx, owned by UnitedHealth, which also owns UnitedHealthcare
How does it make money off a bottle of pills? Three ways, and they're worth knowing by name:
Spread pricing: it charges your plan more for the drug than it pays the pharmacy, and quietly pockets the difference. Just like if a waiter added a markup to your bill and kept it.
Rebates: the drugmaker pays the PBM to get its drug a good spot on the payer’s covered list. So the pill in Biscuit's bag is often the one that paid the most for the shelf space, not the one that works best or costs least.
Steering: the PBM owns pharmacies too, so it nudges Biscuit to fill his prescription at its own, sending the money right back to itself.
The FTC found the big three marked up specialty drugs (the brutally expensive ones for things like cancer and autoimmune disease) at their own pharmacies by hundreds to thousands of percent, pocketing over $7.3 billion above cost between 2017 and 2022 (FTC, 2025). Congress finally swung at this in February 2026: a new law makes PBMs pass the full rebate through and, starting in 2028, stops letting their pay climb just because they steered you to a pricier drug (Consolidated Appropriations Act, 2026). Real teeth, mostly landing in 2028. For right now, the prior-auth rule forcing fast decisions and a written reason covers the pre-approvals on your scans and tests but still skips drugs (CMS), so today the pharmacy counter is the spot with the thinnest protection.
Door 3: The lab benefit manager - the bouncer for tests
You'd assume a blood test is a simple thing between you and your doctor. Doctor orders it, a lab runs it, you get a number back. A third company is standing in that hallway too, and most people have never heard its name.
A lab benefit manager is the company your insurer hires to police lab tests. It has two powers. It decides whether your plan will pay for a test your doctor ordered. And it decides which lab is allowed to run it, because your plan only pays labs on an approved list (that list is called the "network," and a lab that isn't on it bills you directly). Same bouncer move as the scan door, pointed at your bloodwork.
Biscuit met this one because of his blood thinner. After surgery, Dr. Singh wanted the dose exactly right, so she ordered a test that reads a small piece of Biscuit's DNA. That test matters more than it sounds. The same pill hits every body differently: some break the drug down fast and need more, some break it down slowly, so a normal dose builds up and makes them bleed. The DNA test tells the doctor which kind of body she's dosing. Guess wrong in either direction and Biscuit throws a clot or springs a leak. So before anyone could safely hand him a single pill, that test had to clear the lab bouncer.
So why does this job exist? Genetic testing exploded. New tests hit the market every year, some lifesaving, some expensive guesswork a lab is pushing hard, and most doctors can't track which is which. Insurers watched the testing bill climb and got nervous, so they hired companies to stand at the lab door and sort the worth-it from the not. Real problem, and a fair gatekeeper would help. In practice the gatekeeper is paid by the insurer to keep testing down, which quietly bends every close call toward "denied."
The first two doors were simple, since the drug and scan bouncers are mostly owned outright by insurers. The lab door is messier, and the mess is worth seeing.
Who owns the lab bouncers:
Optum runs one, and Optum is owned by UnitedHealth, the insurer. The company deciding on your test is part of the company paying for it.
Avalon isn't owned by an insurer. It's owned by private-equity firms (investors who buy a company to grow it and sell it later at a profit). It also writes the rulebook that Optum's program runs on, so "independent" only stretches so far.
BeaconLBS is owned by LabCorp, one of the giant labs. A lab company deciding which lab tests get approved is its own special kind of awkward.
Insurer-owned, investor-owned, or lab-owned, the one thing they share is that the insurer signs their check, and that check grows when fewer tests get approved.
This already played out once, loudly. Around 2014, UnitedHealthcare told doctors in Florida they had to get clearance from BeaconLBS before ordering dozens of common tests. The pathologists, the doctors who actually run and read those tests, said it would delay care and wall patients off from basic bloodwork. UnitedHealthcare ran the program anyway.
Genetic tests take the worst of it, because they're new, pricey, and easy to stamp "experimental" and wave away. When patients push back on a denied genetic test, though, a lot of those denials don't hold, and in a minute I'll show you exactly how often.
So what do you actually do about it?
Here's the part the benefit managers would rather you skip. The strongest move against a denial is the one almost nobody uses.
If you're the patient:
Take it to an outside referee: When your insurer denies care and upholds that denial on the first appeal, you usually have the right to an independent external review: a doctor with no stake in your plan makes the call instead. Almost half of denials that reach that stage get overturned (Health Affairs, 2019–2023), and for genetic tests like Biscuit's, roughly a third get reversed. ProPublica calls external review one of the industry's best-kept secrets, because only a sliver of eligible people ever file. The whole denial is built on a bet that you'll quit before you get here. Don't. For more on claim denials, see here.
Three things that make that no easier to beat before you even get there:
Get the real reason in writing. On Medicare Advantage, Medicaid, and ACA plans, payers now have to hand you a specific denial reason and the criterion you supposedly missed. A denial you can read is a denial you can fight.
Demand a peer-to-peer. Ask that your own doctor talk directly to the benefit manager's reviewing doctor. The first no often came from software or a nurse, not a physician in the right specialty, and it crumbles fast when a real doctor pushes.
For drugs, skip the maze. Ask the pharmacist for the cash price (sometimes lower than your copay), ask the drugmaker about copay assistance, and have your doctor file a "formulary exception" with a medical reason.
If you're the doctor's office or the RCM team behind it
Quote their own rulebook back at them: Every request gets graded against a specific written criterion. Find it, cite the exact line you meet, and attach the chart note that proves it, all in the first submission.
Run the clock as leverage: As of January 2026, Medicare Advantage and Medicaid plans owe a prior-auth decision in 7 days, 72 hours if it's urgent. Date-stamp everything. A blown deadline is your argument.
Chase gold-card status: Some payers drop the prior-auth requirement entirely for doctors with high approval rates. Track yours and ask for it.
Appeal anyway because the odds are a lie: About two-thirds of doctors who skip appeals say it's because they expect to lose. They're wrong. When prior-auth denials in Medicare Advantage actually get appealed, roughly 80% are overturned, and only about one in ten denials is ever challenged. The denial is built on the bet that you won't bother.
If you're in reimbursement or market access
The denial data is about to be public. Starting in 2026, Medicare Advantage, Medicaid, and ACA payers have started to post their own prior-auth numbers: how much they approve, deny, and overturn on appeal. Pull them. You'll see exactly which payer denies which service and how often those denials reverse, which is a map of where to push.
Know each payer's policy cold, so the request clears on the first pass instead of the third. The avoidable denials are the ones where the paperwork missed a criterion you could have read in advance. This is where converus.ai can help you stay on top of what the latest payer policies require and help you apply them to each and every case.
None of this fixes the setup, and I won't pretend a well-aimed appeal dismantles a conflict of interest this big. The company deciding your care and the company paying for it keep turning out to be the same company in a different lanyard.
The real fix is structural, and it lives in Congress. Until it gets there, knowing these moves is the whole difference between a no that sticks and a no that folds.
We keep each payer's actual policies, the rulebooks your doctor is quietly graded against, at converus.ai. Full disclosure: that's the thing I'm building, mostly because I got sick of losing to rulebooks nobody would let me see.
That's it for this issue. Hit reply. I read everything.
— Shivang
Sources:
PBM market concentration (~80% of U.S. prescriptions; five of six largest PBMs owned by companies that also own an insurer; CVS Caremark–CVS Health–Aetna, Express Scripts–Cigna, OptumRx–UnitedHealth–UnitedHealthcare). Drug Channels Institute (Adam J. Fein), "The Top Pharmacy Benefit Managers of 2024," March 2025. https://www.drugchannels.net/2025/03/the-top-pharmacy-benefit-managers-of.html — most recent update (2025 data) at https://www.drugchannels.net/2026/03/the-top-pharmacy-benefit-managers-of.html
Vertical-integration context (four largest PBMs ~67% of the national market in 2023; ~79% of regional PBM markets highly concentrated; 77% of drug-plan enrollees covered by an insurer vertically integrated with a PBM, rising to 88% in Medicare Part D). American Medical Association (José R. Guardado), Competition in PBM Markets and Vertical Integration of Insurers with PBMs: 2025 Update, Policy Research Perspectives 2025-4, released July 2025. Summary: https://www.ama-assn.org/health-care-advocacy/access-care/these-4-big-names-are-largest-pbms-us — full PDF: https://www.ama-assn.org/system/files/prp-pbm-shares-hhi-2025.pdf
FTC: big-three PBMs marked up specialty generic drugs hundreds to thousands of percent; >$7.3B above estimated acquisition cost, 2017–2022; plus $1.4B in spread pricing. FTC, Second Interim Staff Report on Prescription Drug Middlemen, January 14, 2025. Press release: https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-releases-second-interim-staff-report-prescription-drug-middlemen — full report (PDF): https://www.ftc.gov/system/files/ftc_gov/pdf/PBM-6b-Second-Interim-Staff-Report.pdf
eviCore owned by Cigna; ~1 in 3 insured Americans; "the dial" denial algorithm; ~3-to-1 ROI pitch; Vermont imaging −16% / cardiology −38%; "sentinel effect." Also Carelon (Elevance/Anthem) $13M 2022 settlement over improper-denial tactics. ProPublica / The Capitol Forum (Patrick Rucker, Maya Miller, David Armstrong), "Health Insurers Have Secretly Used an Algorithm to Deny Care" (EviCore investigation), 2024. https://www.propublica.org/article/evicore-health-insurance-denials-cigna-unitedhealthcare-aetna-prior-authorizations
Lab benefit managers: Avalon (independent), BeaconLBS (owned by LabCorp), Optum's LBM; UnitedHealthcare's Florida BeaconLBS pre-clearance program kept over pathologist (CAP) objections; carve-out history; >20,000 lab tests. The Dark Report / Dark Intelligence Group: https://www.darkintelligencegroup.com/tag/laboratory-benefit-management-program-2/ — Diaceutics, "Will Lab Benefit Managers Hinder or Improve Access to Precision Medicine Testing in the US?": https://www.diaceutics.com/articles/will-lab-benefit-managers-lbms-hinder-or-improve-access-to-precision-medicine-testing-in-the-us — Managed Healthcare Executive, "The Time Is Now for Laboratory Benefit Management": https://www.managedhealthcareexecutive.com/view/the-time-is-now-for-laboratory-benefit-management — BeaconLBS: https://www.beaconlbs.com/ — Avalon: https://www.avalonhcs.com/solutions/benefit-management/
American Medical Association, 2025 Prior Authorization Physician Survey (fielded December 2025, released May 13, 2026). https://www.ama-assn.org/press-center/ama-press-releases/ama-survey-prior-authorization-reform-pledge-falls-short-physicians — survey PDF: https://www.ama-assn.org/system/files/prior-authorization-survey.pdf
New federal prior-auth rules (7 days standard / 72 hours expedited; specific written denial reason; public PA metrics; effective 2026; drugs excluded). CMS, Interoperability and Prior Authorization Final Rule (CMS-0057-F), finalized January 17, 2024. https://www.cms.gov/newsroom/fact-sheets/cms-interoperability-prior-authorization-final-rule-cms-0057-f — Note: the 7-day/72-hour timeframe currently excludes ACA exchange QHPs; a 2026 CMS proposed rule would extend it to them (and to drugs) by October 1, 2027.
PBM reform law (100% rebate pass-through; Medicare Part D "delinking" of PBM pay from drug price/rebates; transparency reporting; effective dates generally 2028–2029). Consolidated Appropriations Act, 2026 (H.R.7148), signed February 3, 2026. KFF, "What to Know About Pharmacy Benefit Managers (PBMs) and Federal Efforts at Regulation," February 2026: https://www.kff.org/other-health/what-to-know-about-pharmacy-benefit-managers-pbms-and-federal-efforts-at-regulation/ — AJMC: https://www.ajmc.com/view/pbm-reforms-signed-into-law-reshaping-medicare-part-d-drug-pricing-transparency — Mintz: https://www.mintz.com/insights-center/viewpoints/2146/2026-02-06-congress-passes-landmark-pbm-reform-2026-spending-bill
External review overturns (almost half of denials reaching independent medical review overturned, 2019–2023, four states; ~one-third of cancer genetic-testing denials overturned). Grace A. Lin et al., "Use of Independent Medical Review: Almost One-Half of Coverage Denials Overturned," Health Affairs, 2025. https://www.healthaffairs.org/doi/10.1377/hlthaff.2025.00716 — PubMed: https://pubmed.ncbi.nlm.nih.gov/41370722/ — Corroborating: Pennsylvania Insurance Department external-review data (~48% overturned since 2024): https://www.pa.gov/agencies/insurance/newsroom/shapiro-admin-ind-ext-review-helps-hundreds-receive-benefits-originally-denied
External review rarely used ("one of the industry's best-kept secrets"). ProPublica, "This Little-Known Appeal Could Force Your Insurer to Pay for Lifesaving Care," 2025 (reprint, verified live): https://www.mmm-online.com/news/health-insurance-denial-external-review/
Internal-appeal context (fewer than 1% of denied ACA marketplace claims appealed; ~66% upheld on internal appeal in 2024; few escalate to external review). KFF, "Claims Denials and Appeals in ACA Marketplace Plans in 2024," 2026. https://www.kff.org/patient-consumer-protections/claims-denials-and-appeals-in-aca-marketplace-plans-in-2024/
Appeal-overturn rate (Medicare Advantage prior auth): ~83% of appealed denials overturned in 2022; only ~11% of denials appealed; ~62–67% of non-appealing physicians cite expected futility. AMA, "Over 80% of Prior Auth Appeals Succeed. Why Aren't There More?" (summarizing KFF analysis of CMS 2019–2022 data): https://www.ama-assn.org/practice-management/prior-authorization/over-80-prior-auth-appeals-succeed-why-aren-t-there-more
