The three health insurance companies with which I am familiar all had software that auto-denied claims. The process was this: low-wage clerks entered claims into the system (this is largely done electronically today), all claims were denied. Case workers (usually R.N.'s) review all claims and approved line-by-line. If a diagnostic code didn't match the sequence of codes for medical orders, it stayed denied. This has been commonplace at least since the 1980's when the federal government introduced DRG's (Diagnostic Related Groups) and is in no small measure why it typically takes 90 days or more for a hospital claim to be paid once it is filed with an insurance company. All clinicians know if they don't get the right billing codes in the right order, their claim is going to be denied.

In the five years I worked in the health insurance industry (including a stint where I had to sit in on medical appeal rulings) I never saw a claim's denial stand against appeal.