Patients making under $50K are less likely to have claim denials reversed, study shows
Researchers from the University of Massachusetts and the University of Toronto, examining data on insurance claim denials, found that patients in the U.S. with lower incomes are less likely to have those denials reversed. The findings are published in Health Affairs. [1]
The team, led by Michal Horný, PhD, from the University of Massachusetts Amherst, analyzed data from plans sold on the Affordable Care Act marketplace, as well as private insurance plans from employee benefit groups. They found that households earning less than $50,000 per year were not only the least likely to contest denied claims but also the least likely to have those denials reversed.
According to their findings, while families earning over $100,000 were able to get insurance companies to reverse denied claims 52% of the time, that number dropped to 48% for those earning less than $50,000 per year.
Horný et al. do not believe this trend is related to changes in care delivery or diagnosis. Instead, they suggest it is tied to income levels and the ability to exert pressure on insurance companies.
Further, the denial rate disproportionately affects racial minorities, including Black and Hispanic Americans, who generally have lower incomes compared to white patient populations. According to the researchers, this disparity may be due as much to a lack of knowledge about how to submit a claim as it is to financial means.
However, since the burden of resubmitting a claim often falls equally on providers representing patients and on the patients themselves, the reasons minority groups may feel less empowered to push back are likely complex.
“It is possible that minority patients were more likely to experience barriers to initiating a claim resubmission or reprocessing, including having access only to under-resourced health care providers, explicit or implicit bias, or structural racism,” the authors wrote.
“It is also possible that some minority patients chose to contest only claim denials that were unequivocally wrong, and thus contesting them had a high chance of success,” they added.
Some interesting notes from the findings included that women were more likely to have claims reversed than men. Additionally, education level did not appear to influence denial rates, as no meaningful correlation was found in the data.
As for the reasons behind denials, the researchers found that most (roughly 33%) were due to billing errors, many of which could ideally be resolved by resubmitting a claim. Another 25% stemmed from health plans marking a procedure or diagnosis as uncovered.
Overturned denials resulted in an average savings of $136 per claim, presumably due to reimbursement negotiations—representing a 40% reduction in the amount paid.
Notably, minority patients were less likely to contest denied insurance claims compared to white patients. Moreover, Black and Hispanic patients were also less likely to see a reversal when they did appeal.
“Racial minority patients were more likely than non-Hispanic white patients to have cost-sharing obligations reduced but achieved lower mean savings per successfully contested denial,” the authors said.
Commenting on a solution, the team highlighted the complexity of medical claim procedures and argued that lawmakers should develop policies to simplify the processes of submission, denial, and appeal—ensuring that all patients and providers can more easily navigate the system.
The lower-than-average rate of appeals among minority patients may stem from practical barriers, such as provider offices operating only during standard business hours—when many people are working and already struggle to take time off for medical appointments.
“Policy makers working to promote equitable health care access should make available more resources for contesting and rectifying administrative errors and enact policies to prevent billing errors and consequent claim denials,” the researchers concluded.
The full study is available here.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.