By Cathleen Calhoun, J.D.
Claim denial rates for specific issuers offering coverage on healthcare.gov varied significantly in 2017, and consumers rarely appealed.
In examining CMS transparency data on claims denials and appeals among issuers offering individual market coverage on healthcare.gov from 2015-2017, it was found that, with complete data,19 percent of in-network claims were denied by issuers in 2017. However, the denial rates for specific issuers varied greatly around the 19 percent average, from less than 1 percent to more than 40 percent. Appeals of the denials were also found to be extremely rare—less than one-half of one percent of denied claims, a brief by the Kaiser Family Foundation (KFF) notes.
Transparency data. The Affordable Care Act (ACA) (P.L. 111-148) requires data reporting by health group plans. The data was examined with a focus on major medical plans. An analysis of the data found that in 2017, 40 of the 130 reporting healthcare.gov major medical issuers had a denial rate for in-network claims of 10 percent or lower. In addition, 43 other reporting issuers denied between 11 and 20 percent of in-network claims that year, and 47 issuers denied more than 20 percent of in-network claims. Certain factors were found to possibly explain the variation in denial rates, such as a determination of medical necessity, limits on covered services, routine denial by automated systems, provider knowledge about claims, and issuer reporting methods.
Appeals. The study found that consumers rarely appealed denials. For 2017, 121 major medical issuers showed data on submitted, denied, and appealed in-network claims. As a group, the issuers denied more than 42 million claims. Fewer than 200,000 were appealed (less than one-half of one percent). For 2015 and 2016 the transparency data showed even lower appeal rates—0.1 percent (2015) and 0.2 percent (2016).
Context. According to the authors of the KFF brief, the federal government does not yet require ACA transparency data by other insurance issuers or group health plans, so full comparisons are not possible. Other sources of data to provide context include, among others, California’s state-based marketplace, CoveredCA. For 2017, 10 issuers reported 33 million in-network claims, and 8 million of them, or 24 percent, were denied. The denial rate for individual issuers ranged from 7 percent to 41 percent in 2017.
Findings. The denial rate variation among issuers is significant. Experts who were consulted suggested that some variation may be due to inconsistent understanding of reporting instructions and possible inaccurate reporting. Reporting additional metrics, such as out-of-network claims, may be helpful to inform the transparency data. The transparency data could be informed through the reporting on the reasons for claim denials and other detail about the nature of claims as well.
Companies: Kaiser Family Foundation
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