Kaiser Family Foundation Health News (“KFF”) has published a news perspective entitled “Denials of Health Insurance Claims are Rising – and Getting Weirder” that shows a sharp increase in denials of health insurance claims. A recent KFF study of Affordable Care Act (“ACA”) plans found that health insurance companies denied an average of 17% of ACA claims in 2021, with one insurer denying 49% of claims and another denying “an astonishing 80%” of claims in 2020. This is at a time when only one in 500 claims denials are appealed because of the time and effort appeals take, both for patients and for their medical providers.
The news perspective, by veteran health journalist Elizabeth Rosenthal, stated that the increased denials are likely due to health insurers’ use of computer algorithms and individuals with little relevant experience to deny claims quickly. As explained in the news perspective, these “rapid-fire denial” are “a handy way for insurers to keep revenue high….” As evidence, the perspective pointed to a ProPublica investigation finding that Cigna’s automated PXDX system allowed its medical reviewers to sign off on 50 charts in ten seconds, which ProPublica reported allowed Cigna to deny claims without reviewing patients’ medical records. The perspective also pointed to a 2020 study estimating that automated claims processing saved health insurers more than $11 billion annually.
The perspective gave some specific examples of weird denials, including denial of payment for a preapproved procedure to treat a heart arrhythmia, stating that nerve injections – which the patient did not have – were not medically necessary. Another example was a letter sent directly to a newborn denying coverage for neonatal intensive care stating “you are drinking from a bottle.” As the perspective remarked: “If only the baby could read.”
The ACA required that the Department of Health and Human Services collect data on denials from health insurers and to make that information publicly available, but the KFF study showed that these efforts have been haphazard and incomplete. Ms. Rosenthal concluded the perspective, by opining:
The government has the power and duty to end the fire hose of reckless denials harming patients financially and medically. Thirteen years after the passage of the ACA, perhaps it is time for the mandated investigation and enforcement to begin.
The KFF news perspective had been previously published in The Washington Post.