- Affordable Care Act marketplace insurers denied on average roughly 18% of in-network claims in 2020, according to a new report from the Kaiser Family Foundation.
- Of the more than 230 million in-network claims reported, 42 million claims were denied for reasons including lacking prior authorization, excluded services and medical necessity. One in five medical necessity denials were for behavioral health services.
- However, five years into ACA-mandated transparency for coverage data, reporting for 2020 remained spotty, showing limited insight into coverage denials and potentially limiting insurer transparency and consumer protection enforcement, KFF said.
The ACA requires participating plans to provide data for claims, enrollment, cost-sharing and out of network payments.
However, more than a decade after implementation of the the law, data reported by insurers for in-coverage services is still not fully implemented, potentially hampering oversight enforcement and raising more questions than it answers, according to the KFF report released Tuesday.
In addition to a reporting lag, the CMS does not collect data on all fields spelled out in the ACA, including out-of-network claims submitted or cost sharing and payments for out-of-network claims, according to the report.
Of the 18% of in-network claim denials, 10% were denied for lacking prior authorization or referrals, 16% were denied for an excluded service and 2% were denied for medical necessity. More than 70% of denials were classified as “all other reasons.”
And, while marketplace insurers denied about 18% of in-coverage claims, one in five insurers reported denying more than 30% of in-network claims, a much larger denial rate than seen in a previous private study of commercial insurers, according to the report. By contrast, a 2018 report of Medicare Advantage programs found that those plans denied an average of 8% of claims.
Issuers that denied more than 30% of in-network claims included Celtic, Molina, QualChoice, Ambetter, Oscar and Meridian, each in various states. Celtic, Qualchoice, Ambetter and Meridian are state-specific marketplace products owned by Centene.
Of the 2% claim denials classified as medical necessity, some insurers denied a much higher percentage than others.
Insurers varied in their denials for medical necessity
Behavioral health services made up around 20% of medical necessity denials in 2020. The CMS requires marketplace plans to break out reporting for behavioral health service claim denials but doesn’t require breaking out other data for behavioral health claims, stymieing analysis.
Denials also varied by state and within states. Mississippi and Indiana had the highest average denial rate for in-network marketplace plans in 2020 at around 29%.
Of the plan-specific data collected by CMS, bronze qualified health plans denied on average 15.9% of in-network claims, 18.9% for silver, 11.8% for platinum and 18.3% for catastrophic plans, according to the report.
Appeals for in-claim denials remained generally ineffective, with issuers upholding 63% of appealed denials. The vast majority of denied claims were also not appealed — consumers appealed denied claims at a rate of about one-tenth of 1%.
And, while consumers on Healthcare.gov can submit external appeals, KFF estimated that only around 2,100 external appeals were applied in 2020.