Marketplace insurers deny many claims—and enrollees seldom push back

Health insurers selling their services through denied nearly one-fifth of claims in 2017. And only a tiny fraction of the affected consumers—less than one-half of one percent—appealed the decisions.

So found Kaiser Family Foundation researchers when they analyzed Affordable Care Act (ACA) transparency data released by CMS. The team released its findings Feb. 25.

The authors further found that, in those rare instances when consumers attempted to have the negative ruling reversed, payers only changed their mind 14 percent of the time.

They reported that 42.9 million of 229.8 million in-network claims submitted to 130 insurers were denied for an average in-network claims denial rate of 19 percent.

“Denials can occur due to improperly submitted or duplicate claims as well as services that the insurer says are not medically necessary,” the authors wrote.

Additionally, they found, denial rates varied from state to state.

“However, in states where multiple issuers participate in the marketplace, the average denial rate can obscure variation among issuers,” the authors wrote. In Florida, they noted six marketplace issuers together denied 11 percent of more than 40 million in-network claims. Yet the denial rates varied among the six from as low as 2 percent to as high as 32 percent.

“[I]t remains to be seen how regulators will use transparency data reported by issuers,” the authors wrote, adding that the stated purpose of the Market Conduct Annual Statement (MCAS) system, administered by the National Association of Insurance Commissioners, is to inform oversight and market conduct activities of state regulators.

“The Inspector General’s report on Medicare Advantage plans finds claims denial rates concerning,” they wrote, "'particularly because beneficiaries and providers rarely use the appeals process designed to ensure access to care and payment,’ and recommends enhanced oversight by CMS."

CMS does not use transparency data in oversight or marketplace plan certification, the authors noted, adding that the agency’s recent data collection notice states this will continue to be the case for another three years.

“However, in its 2020 proposed rule for marketplace plans, CMS said it will explore opportunities to expand the collection of transparency data in an effort to assist consumers in selecting a qualified health plan offered through the marketplace.”