The Algorithm Will See You Now

In January 2024, 22-year-old Cole Schmidtknecht walked into a Walgreens in western Wisconsin to refill the inhaler he’d been using for years to prevent asthma attacks. But this time, his insurance—managed by the PBM OptumRx—had quietly dropped it from coverage. The cash price? Over $500.

He didn’t pick it up. He couldn’t afford it.

He tried rationing his rescue inhaler. Five days later, Cole died of an asthma attack.

His family is now suing both Walgreens and OptumRx, arguing they failed to notify him, provide alternatives, or uphold basic responsibilities.

OptumRx claims they offered multiple alternatives for a $5 copay. But what the average person reading that might not understand is that it isn’t so simple. Cole couldn’t just decide to go home with an alternative $5 medication on the spot… even if he was OK with a surprise change to the medication that had kept him alive for years.

That insurance rejection kicked into motion a process that could take days to resolve.

For those of you who don’t work in a pharmacy, here’s what has to happen…

Is that an antiquated, ridiculous process? Absolutely. But that’s how it works. And that’s what is happening all day, every day, to thousands of patients across the country.

Whether Cole’s family wins this lawsuit or not, the message is clear: behind every prescription denial is a real person. A real person with a disease they need meds to control. And in some cases, a morbid outcome.

According to new data published last week in The New York Times, private health insurers in the U.S. denied 22.9% of all prescription drug claims in 2023, up from 18.3% in 2016—a 25% increase over seven years.

That’s one in every four claims. And that’s just what we know.

Most private insurers don’t make this data public. Komodo Health, the analytics firm behind the Times investigation, sourced its numbers from a proprietary dataset of over 4.5 billion claims.

Insurers say that many of these denials are later reversed. But that’s missing the point. Every delay, every obstacle, every vague denial code increases the chance a patient will give up, go without, or be harmed.

Just ask Cole’s family.

You’d think your doctor decides what drug you get.

But more often, it’s not your doctor, or your pharmacist, or even your insurance plan directly. It’s a PBM hired to oversee drug access.
(If you don’t know what a PBM is, click here.)

And increasingly, it’s AI.

That’s not a metaphor. Artificial intelligence is now reviewing drug claims in real time, flagging “problems” and issuing automated denials before a human ever gets involved.

It’s for efficiency, they say.

And if the system gets it wrong? Well, you can always appeal. Or switch to a cheaper drug. Or try again later.
As long as you have a week (and plenty of hours of aggravation) to spare.

The most common reason cited for drug denials in the Komodo data?

“Refill too soon.”

Next most common?

“Prior Authorization required.”

These aren’t necessarily dangerous drugs or unapproved uses. Most of the time they are just drugs the PBM has decided not to include on formulary because their cut of the rebate isn’t good enough. They’re often medications the patient has already been taking safely for years.

But the system—governed by spreadsheets and incentive structures—defaults to “no” until you prove yourself worthy of a “yes.”

Let’s take a moment to define a PBM’s favorite term.

Prior authorization (PA) is when your insurance company makes your doctor ask for permission before they’ll pay for your medication. The original idea was to curb unnecessary care. But in practice, it’s become a bureaucracy of suspicion.

At my pharmacy, I tell people that a PA basically means you’re being put on trial. Your insurance company is the judge AND the jury deciding whether your medication is necessary. Your doctor is your lawyer, and it’s up to them to plead your case. At the end of the trial, the judge decides if they’ll pay for it or not.

Of course, because this is healthcare, the process is extremely inefficient and handled completely via phone or fax.

Doctors now spend hours filling out forms and making phone calls to justify the choices they’ve already made. One survey found physicians average 43 PA requests per week, with practices spending two full business days a week dealing with them.

That’s time spent not seeing patients, not diagnosing conditions, and not following up on treatment.
Instead, it’s time spent faxing PDFs to a black hole.

The cherry on top? After the doctor finally submits all the information, the PBM still gets up to 72 hours to make a decision.

Delay. Delay. Delay.

The American Medical Association reports that:

This is clinical sabotage in the name of cost-cutting and profit.

Lawmakers are starting to take notice.

A bipartisan bill in Congress—H.R. 2630, the Safe Step Act—would require that insurers provide clear clinical criteria for denials and that prior authorizations be reviewed by a physician in the same specialty as the prescribing doctor.

Imagine that: an actual oncologist weighing in on a cancer drug instead of a generic “utilization manager.”

The Centers for Medicare & Medicaid Services (CMS) is also pushing toward faster, more transparent decisions, mandating that PA be handled electronically and reported publicly by 2026.

Some states are going further:

Even the insurers are feeling the pressure. In 2023, several large health plans pledged to “streamline” prior authorization. But skeptics (rightly) point out: they’ve made similar promises before and didn’t deliver.

None of these stories make it into the insurer’s spreadsheet.

There’s no column for “harm caused by friction.”

But it’s there. Every day.

This is what happens when healthcare is reduced to an algorithm.

A system designed for cost control has become one of silent denial. The longer the delay, the less likely you are to follow through. And in the world of health insurance, every unfilled prescription is a savings opportunity.

PBMs and insurers will say it’s all about safety.

But the truth is more cynical: obstruction is the business model.

We created a system deliberately engineered to stall, confuse, and deny.

So ask yourself:

If your doctor says it’s necessary, your pharmacist says it’s safe, and the algorithm still says “no”...

…then who’s really in charge of your care?

This isn’t virtual reality. This is the truth.

Keep those boots on. We’ve got more ground to cover soon.

Alec Wade Ginsberg, PharmD, RPh
4th-Gen Pharmacist | Owner & COO, C.O. Bigelow
Founder, Drugstore Cowboy