Health insurance providers have guidelines that need to be followed by doctors for almost every intervention (procedure, medication, etc.). Typically those guidelines are evidence based, that is, there must have been a study that shows the intervention was helpful for a given diagnosis. Even then, the guidelines may not reflect the studies that your doctor is using as the basis for their treatment plan. If you have a rare disease, this is problematic since there is often little evidence applicable to your treatment. Quite often patients will get a denial first, and then the doctors have a "peer to peer" where they must justify the intervention to the insurance company; often these peer to peer requests are also rejected. Finally, there is an appeal process with more extensive documentation requirements, which may take 10 days (and this is the expedited timeline). During those ten long days, the medical condition of the patient may be rapidly changing.

There is suggested legislation regarding peer-to-peer problems, namely cases where the doctor assigned by the insurance company isn't even qualified to understand the medical condition or its treatment. See https://twitter.com/OffWhiteCoat/status/1559609045027266566

I don't know the prevalence of insurance denial cases. However, from discussions with my care team, the initial treatment denial by insurance companies is "standard operating procedure". If an application for treatment doesn't check every single box in the procedure guideline, it is denied pending peer to peer, and then quite often to appeal. By the time an appeal succeeds, the treatment may no longer be relevant.