Millions of Americans in the past few years have run into this experience: filing a health care insurance claim that once might have been paid immediately but instead is just as quickly denied. If the experience and the insurer\u2019s explanation often seem arbitrary and absurd, that might be because companies appear increasingly likely to employ computer algorithms or people with little relevant experience to issue rapid-fire denials of claims \u2014 sometimes bundles at a time \u2014 without reviewing the patient\u2019s medical chart. A job title at one company was \u201cdenial nurse<\/a>.\u201d<\/p>\n

It\u2019s a handy way for insurers to keep revenue high \u2014 and just the sort of thing that provisions of the Affordable Care Act were meant to prevent. Because the law prohibited insurers from deploying previously profit-protecting measures such as refusing to cover patients with preexisting conditions, the authors worried that insurers would compensate by increasing the number of denials.<\/p>\n

And so, the law tasked the Department of Health and Human Services with monitoring denials<\/a> both by health plans on the Obamacare marketplace and those offered through employers and insurers. It hasn\u2019t fulfilled that assignment. Thus, denials have become another predictable, miserable part of the patient experience, with countless Americans unjustly being forced to pay out-of-pocket or, faced with that prospect, forgoing needed medical help.<\/p>\n

A recent KFF study<\/a> of ACA plans found that even when patients received care from in-network physicians \u2014 doctors and hospitals approved by these same insurers \u2014 the companies in 2021 nonetheless denied, on average, 17% of claims. One insurer denied 49% of claims in 2021; another\u2019s turndowns hit an astonishing 80% in 2020. Despite the potentially dire impact that denials have on patients\u2019 health or finances, data shows that people appeal only once in every 500 cases.<\/p>\n

Sometimes, the insurers\u2019 denials defy not just medical standards of care but also plain old human logic. Here is a sampling collected for the KFF Health News-NPR \u201c Bill of the Month<\/a>\u201d joint project.<\/p>\n

Dean Peterson of Los Angeles said he was \u201cshocked\u201d when payment was denied for a heart procedure to treat an arrhythmia, which had caused him to faint with a heart rate of 300 beats per minute. After all, he had the insurer\u2019s preapproval for the expensive ($143,206) intervention. More confusing still, the denial letter said the claim had been rejected because he had \u201casked for coverage for injections into nerves in your spine\u201d (he hadn\u2019t) that were \u201cnot medically needed.\u201d Months later, after dozens of calls and a patient advocate\u2019s assistance, the situation is still not resolved.<\/li>\n

An insurer\u2019s letter was sent directly to a newborn child denying coverage for his fourth day in a neonatal intensive care unit. \u201cYou are drinking from a bottle,\u201d the denial notification said, and \u201cyou are breathing on your own.\u201d If only the baby could read.<\/li>\n

Deirdre O\u2019Reilly\u2019s college-age son, suffering a life-threatening anaphylactic allergic reaction, was saved by epinephrine shots and steroids administered intravenously in a hospital emergency room. His mother, utterly relieved by that news, was less pleased to be informed by the family\u2019s insurer that the treatment was \u201cnot medically necessary.\u201d<\/li>\n<\/ul>\n
As it happens, O\u2019Reilly is an intensive-care physician at the University of Vermont. \u201cThe worst part was not the money we owed,\u201d she said of the $4,792 bill. \u201cThe worst part was that the denial letters made no sense \u2014 mostly pages of gobbledygook.\u201d She has filed two appeals, so far without success.<\/p>\n
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Some denials are, of course, well considered, and some insurers deny only 2% of claims, the KFF study found. But the increase in denials, and the often strange rationales offered, might be explained, in part, by a ProPublica investigation<\/a> of Cigna \u2014 an insurance giant<\/a>, with 170 million customers<\/a> worldwide.<\/p>\n
ProPublica\u2019s investigation, published in March, found that an automated system, called PXDX, allowed Cigna medical reviewers to sign off on 50 charts in 10 seconds, presumably without examining the patients\u2019 records.<\/p>\n
Decades ago, insurers\u2019 reviews were reserved for a tiny fraction of expensive treatments to make sure providers were not ordering with an eye on profit instead of patient needs.<\/p>\n
These reviews \u2014 and the denials \u2014 have now trickled down to the most mundane medical interventions and needs, including things such as asthma inhalers or the heart medicine that a patient has been on for months or years. What\u2019s approved or denied can be based on an insurer\u2019s shifting contracts with drug and device manufacturers rather than optimal patient treatment.<\/p>\n
Automation makes reviews cheap and easy. A 2020 study estimated<\/a> that the automated processing of claims saves U.S. insurers more than $11 billion annually.<\/p>\n
But challenging a denial can take hours of patients\u2019 and doctors\u2019 time. Many people don\u2019t have the knowledge or stamina to take on the task, unless the bill is especially large or the treatment obviously lifesaving. And the process for larger claims is often fabulously complicated.<\/p>\n
The Affordable Care Act clearly stated that HHS \u201cshall\u201d collect the data on denials from private health insurers and group health plans and is supposed to make that information publicly available. (Who would choose a plan that denied half of patients\u2019 claims?) The data is also supposed to be available to state insurance commissioners, who share with HHS the duties of oversight and trying to curb abuse.<\/p>\n
To date, such information-gathering has been haphazard and limited to a small subset of plans, and the data isn\u2019t audited to ensure it is complete, according to Karen Pollitz, a senior fellow at KFF and one of the authors of the KFF study. Federal oversight and enforcement based on the data are, therefore, more or less nonexistent.<\/p>\n
HHS did not respond to requests for comment for this article.<\/p>\n
The government has the power and duty to end the fire hose of reckless denials harming patients financially and medically. Thirteen years after the passage of the ACA, perhaps it is time for the mandated investigation and enforcement to begin.<\/p>\n
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