GAO: 'No' isn't always final word on claim denials
Payment claim denied? Try again. Nationwide data collected by the Department of Health and Human Services (HHS) from insurers shows that the aggregate application denial rate for the first quarter of 2010 was 19 percent, but that denial rates varied significantly across insurers, according to a March report from the U.S. Government Accountability Office (GAO).
“For example, just over a quarter of insurers had application denial rates from 0 to 15 percent while another quarter of insurers had rates of 40 percent or higher,” the report stated. “The available data indicated variation in application denial rates, and there are several issues to consider in interpreting those rates.”
The rates may not provide a clear estimate of the number of individuals that were ultimately able to secure coverage, as individuals can apply to multiple insurers, and the rates do not reflect applicants that have been offered coverage with a premium that is higher than the standard rate, according to the GAO report, titled “Private Health Insurance: Data on Application and Coverage Details.”
The report reviewed newly available nationwide data collected by HHS from 459 insurers operating in the individual market on application denials from January through March. The GAO also reviewed a year or more of the available data from six states (California, Connecticut, Florida, Maryland, New York and Ohio) on the rates of application and coverage denials and the rates and outcomes of appeals related to coverage denials.
Several factors may have contributed to the variation in rates across states and insurers, such as states varying in types of denials they require insurers to report, GAO wrote. “The data also indicated that coverage denials occurred for a variety of reasons, frequently for billing errors, such as duplicate claims or missing information on the claim and eligibility issues, such as services being provided before coverage was initiated, and less often for judgments about the appropriateness of a service.”
Coverage denials, if appealed, were frequently reversed in the consumer’s favor: Data from four of the six states on the outcomes of appeals filed with insurers indicated that 39 to 59 percent of appeals resulted in the insurer reversing its original coverage denial, the report stated.
“The large percentage of Americans that rely on private health insurance for healthcare coverage could expand with enactment of the Patient Protection & Affordable Care Act (PPACA) of 2010,” GAO concluded. “Until PPACA is fully implemented, some consumers seeking coverage can have their applications for enrollment denied, and those enrolled may face denials of coverage for specific medical services.”
“For example, just over a quarter of insurers had application denial rates from 0 to 15 percent while another quarter of insurers had rates of 40 percent or higher,” the report stated. “The available data indicated variation in application denial rates, and there are several issues to consider in interpreting those rates.”
The rates may not provide a clear estimate of the number of individuals that were ultimately able to secure coverage, as individuals can apply to multiple insurers, and the rates do not reflect applicants that have been offered coverage with a premium that is higher than the standard rate, according to the GAO report, titled “Private Health Insurance: Data on Application and Coverage Details.”
The report reviewed newly available nationwide data collected by HHS from 459 insurers operating in the individual market on application denials from January through March. The GAO also reviewed a year or more of the available data from six states (California, Connecticut, Florida, Maryland, New York and Ohio) on the rates of application and coverage denials and the rates and outcomes of appeals related to coverage denials.
Several factors may have contributed to the variation in rates across states and insurers, such as states varying in types of denials they require insurers to report, GAO wrote. “The data also indicated that coverage denials occurred for a variety of reasons, frequently for billing errors, such as duplicate claims or missing information on the claim and eligibility issues, such as services being provided before coverage was initiated, and less often for judgments about the appropriateness of a service.”
Coverage denials, if appealed, were frequently reversed in the consumer’s favor: Data from four of the six states on the outcomes of appeals filed with insurers indicated that 39 to 59 percent of appeals resulted in the insurer reversing its original coverage denial, the report stated.
“The large percentage of Americans that rely on private health insurance for healthcare coverage could expand with enactment of the Patient Protection & Affordable Care Act (PPACA) of 2010,” GAO concluded. “Until PPACA is fully implemented, some consumers seeking coverage can have their applications for enrollment denied, and those enrolled may face denials of coverage for specific medical services.”