News: Highest payer denial rate was 80% in 2020, according to report

Recently, the Kaiser Family Foundation analyzed transparency data released by CMS on claims denials and appeals data reported in 2020 and released a report on their findings. The data, specifically for non-group qualified health plans (QHP), came from examining 230.9 million in-network claims and showed a denial rate of about 18% in 2020. The average came from a wide array of insurer denial rates, however, with some showing as less than 1% while others were more than 80%, HealthLeaders reported.

“Partial implementation of ACA [Affordable Care Act] transparency data reporting began five years ago,” the report said, but as of today issuers are only required to report on QHPs. Other than being out-of-network, Kaiser found the reported reasons for claims denials break down as follows:

• 16% due to the claim being for an excluded service
• 10% due to a lack of pre-authorization or referral
• 2% due to a lack of medical necessity (of this, 1 in 5 were for behavioral health services)
• 72% due to ‘all other reasons’ or without a specific reason

Findings also showed that consumers rarely appeal denied claims in 2020, at just over one-tenth of 1% of the time, while insurers upheld denials on appeal 63% of the time. Of the 144 studied insurers, the analysis indicated 28 had a less than 10% denial rate, 52 had a 10%-19% rate, 36 had a 20%-30% rate, and 28 had a 30% rate or higher. Insurance companies who denied over 30% include Oscar in seven states, Molina in six states, Celtic in five states, and Qualchoice and Ambetter in one state each.

"More robust transparency data reporting, while potentially more burdensome to insurers, could provide data useful to both regulators and consumers," the report stated.

Editor’s note: This topic was also covered by HealthLeaders here. The full Kaiser Family Foundation report can be accessed here. To read a CDI Journal article about using denial volumes as a CDI key performance indicator, click here.