Elisabeth Rosenthal writes for The Washington Post on the rising rate of health insurance denials. High denial rates are not surprising given that health insurers generate greater revenues on each claim they deny. Consequently, they often use proprietary computer algorithms to deny claims in a systematic fashion, with no regard for people’s medical needs.
Since the Affordable Care Act, health insurers can no longer refuse to cover people with pre-existing conditions in many instances. Instead, to maximize profits, they find ways to deny care. Rosenthal highlights how one insurance company literally has as a job title “denial nurse.”
Although the US Department of Health and Human Services is charged with overseeing insurance company denials, it has not undertaken its oversight responsibilities in a meaningful way. Rather, too often, patients are faced with care denials and the obligation to pay for their care themselves or skip getting care altogether.
The Kaiser Family Foundation (KFF) recently reported that, in 2021, one in six claims for in-network care in the state health insurance exchanges were denied, 17 percent. In one case, the insurer denied half of all claims, 49 percent! Worse still, another insurer denied four in five claims, 80 percent. And, while insurers reverse the majority of denials when people appeal, patient appeal rates are extremely low–one in 500.
At times, denials are not only medically incomprehensible but nonsensical. For example, one patient with arrhythmia had his insurer’s approval for a heart procedure, but he was denied coverage “for injections into nerves in your spine,” which he had not received. The insurer had not paid the claim many months later, notwithstanding endless attempts to fix the error.
In another instance, the insurer wrote a newborn to let the baby know that his neonatal care was denied because the baby could drink from a bottle and breathe on his own. Of course, the baby could not read the denial! And, an insurer denied coverage for epinephrine and steroids received in the emergency room to treat a young man with a deadly anaphylactic allergic reaction, which the insurers claimed was medically unnecessary. Though the patient’s mother has appealed, she still has not gotten the insurance to cover the services.
Increases in insurer denial rates are likely a product of a computer system, PXDX, which I wrote about here, that allows insurers’ medical claims-review staff to deny 50 claims in ten seconds. This system saves insurers billions of dollars a year, at the expense of the health and well-being of their enrollees.
To add insult to injury, claims can be denied because an insurer does not have a contract with a particular drug or device manufacturer. It doesn’t matter that the patient needs the treatment.
Of course, these denials are also happening in Medicare Advantage plans. And, the Centers for Medicare and Medicaid Services (CMS) is not reporting plan denial rates to enable people to avoid plans with high denial rates. In fact, most likely, those plans are getting four and five-star ratings, because the rating system is such a farce! (You can read about why the Medicare Advantage star-ratings are a farce here.)
The Affordable Care Act gives health insurer oversight responsibilities to HHS and requires HHS to collect and publicly report denial rates among corporate health insurers in the state health exchanges. But, HHS has not undertaken this data collection and reporting, as required. So, after more than a decade of failed government oversight, the insurers continue to deny claims with impunity.
Here’s more from Just Care:
- Don’t judge a Medicare Advantage plan by its stars
- OIG finds widespread inappropriate care denials in Medicare Advantage
- The choice between traditional Medicare and Medicare Advantage: It’s a sham
- Four things to think about when choosing between traditional Medicare and Medicare Advantage plans
- Government overpayments to Medicare Advantage plans grow, while concerns remain about quality of care
Leave a Reply