If cost reduction by an insurer is the reason for de facto denials as part of utilization management, it can lead to healthcare rationing through denials of care or coverage, delays in care, and unexpected financial risks to patients.
[2] In workers' compensation cases, de facto denial of coverage due to non-response can occur if an insurer fails to respond in writing within a certain time.
In some cases, this kind of de facto denial occurs because of a technical or claims processing problem.
Legal cases have been brought against public and private insurers when rates are set too low to provide sufficient access.
A de facto denial, rather than denying a prior authorization request (PAR) outright, may allow an insurer to delay responding or to indicate to a covered person they have been approved a treatment, procedure, or claim without having to offer an appeal process.