News: AHA report suggests MA denials increased by 55.7% between 2022-2023

A new report released by the American Hospital Association (AHA) catalogues “staggering” administrative costs imposed on hospital operating margins.

The report—“Skyrocketing hospital administrative costs, burdensome commercial insurer policies are impacting patient care”—suggests that “excessive regulatory and insurer requirements” account for “more than 40% of total expenses hospitals incur in delivering care to patients.”

The authors of the report highlighted the growing trend in denials over the past few years, observing that care denials occurring between 2022 and 2023 increased a whopping average of 20.2% for commercial claims and 55.7% for Medicare Advantage claims, respectively.

“In these situations,” the authors argued, “hospital staff must expend valuable time and resources to overturn inappropriate denials, adding unnecessary cost and burden to the health care system, and creating uncertainty for patients about whether their insurance will pay for their care.”

One of the key factors contributing to this massive uptick, the researchers argue, is the “increased use of machine learning algorithms and other artificial intelligence tools.”

Here are some other highlights of the report:

• Approximately 56% of denied claims are overturned upon appeal
• Hospitals and health systems are “conservatively” spending approximately $40 billion on costs associated with billing and collections
• In 2022, 50% of hospitals and health systems reported having more than $100 million in accounts receivable for claims older than six months

Editor’s note: To read the AHA report, click here.