Texas AG opens prior auth probe into Blue Cross Blue Shield of Texas

Texas Attorney General Ken Paxton has opened an investigation into Blue Cross Blue Shield of Texas related to the payer's prior authorization and care denials processes, according to an office press release.

The Office of the Attorney General said the probe is prompted by numerous reports it has received detailing denied or delayed coverage for services that are medically necessary or urgent.

One case emphasized by the AG centers on a newborn infant who did not receive urgent medical treatment that was allegedly covered under the applicable health plan. Paxton's office argues that administrative denials and potentially improper utilization review procedures delayed approval of a transfer to a facility where the procedure could be completed.

The probe comes as prior authorization and care denials become more common burdens for patients. According to May 2026 Commonwealth Fund numbers, about a fifth of U.S. adults have had a private insurer deny recommended healthcare services for themselves or a family member. That includes 13% who said their prior authorization was denied.

Payer organizations such as BCBSTX say that utilization management processes, such as prior authorizations, are important for cost containment. They contend that these processes enable the payer to determine whether patients are getting the best-value treatment for their medical needs.

But utilization management and care denials can have adverse consequences, Paxton's office noted. When payers deny medically necessary services, patients might see their condition deteriorate, face increased risk of complications or disease progression or experience disability or death. That is on top of the risk of increasing administrative consumer costs, Paxton's office added.

"Blue Cross Blue Shield has a responsibility to put patients before profits and ensure that Texans receive the care they need," Paxton said in a statement. "When a newborn baby or any other Texan urgently needs medical treatment, an insurance company’s priority should be helping provide that care to the best of its ability -- not searching for ways to delay or deny it. I will wage a relentless legal battle against any insurance company that fails to protect health and safety of Texans."

Paxton's office has issued a Civil Investigative Demand to obtain information about BCBSTX, its parent company Health Care Service Corporation or their related businesses to determine if the companies have violated Texas law. This includes provisions related to the Texas Deceptive Trade Practices Act.

The AG said it will focus its investigation on BCBSTX's representation of its claim approval process, whether claims are denied before adequate review and whether BCBSTX engages in any other unlawful practices.

Sara Heath is an executive editor at Xtelligent Healthcare Media, where she covers patient engagement, healthcare policy and health IT.