ACA plans denied nearly 1 in 5 in-network claims in 2017
Affordable Care Act marketplace plans denied 19% of claims submitted for in-network service in 2017. Only 0.5% of those denied claims were appealed, according to a new Kaiser Family Foundation report.
KFF found huge denial rate variations between payers, ranging from 1% to 45%. There were vast differences within states, too.
Only about 200,000 of the almost 43 million denied claims were appealed. Appeals reversed denied claims in about 14% of cases, though there were wide variations among payers (1% to 88%), according to the analysis.
A byproduct of claim denials is that members wind up with surprise medical bills, which lead to large out-of-pocket costs for patients. Surprise bills can also force providers and hospitals to track down payments from those patients, or face uncompensated care costs themselves.
Denied claims and surprise billing go well beyond the ACA marketplace. Kaiser Family Foundation recently reported that about 40% of Americans said they have received a surprise medical bill. A 2017 report by Change Healthcare found about 9% of claims were initially denied in the previous year. That totaled $262 billion in initially rejected claims.
Payer cost-controlling policies, such as Anthem's emergency room policy, may exacerbate the issue. Those policies, which are ostensibly put in place to contain costs, can also mean a bigger chance of claim denials.
In its latest research, KFF reviewed almost 230 million claims submitted by 130 payers in the ACA exchanges in 2017. The findings show wide denial variations for payers, though some of the difference might be reporting discrepancies, KFF said.
At this point, researchers can't pinpoint exactly why a payer denied claims. There's a big difference between a denial for a redundant claim or one for services being deemed medically unnecessary. That barrier makes it difficult to figure out denial trends.
"Clearer reporting instructions, additional training, and greater use of data verification and validation measures could improve accuracy and consistency of reporting," KFF said.
Earlier this month, CMS said it will require ACA plans to report denial reasons, including out-of-network, referral or prior authorization needed and services not covered. That will also allow researchers to get a better handle on why payers deny claims.
CMS will also require payers to provide claims data by the plan level and not the insurer level, which will allow for more specificity.
- Kaiser Family Foundation Claims Denials and Appeals in ACA Marketplace Plans