Insurer claim denials and appeals in A.C.A. marketplace plans in 2020: K.F.F.

map of claim denials

“In this report, we analyze transparency data released by the Centers for Medicare and Medicaid Services (C.M.S.) on claims denials and appeals for non-group qualified health plans (Q.H.P.s) offered on HealthCare.gov,” Karen Pollitz, Matthew Rae and Salem Mengistu write over at the Kaiser Family Foundation. “Data were reported by insurers for the 2020 plan year, posted in a public use file in 2021, and updated in 2022. We find that, across HealthCare.gov insurers with complete data, about 18% of in-network claims were denied in 2020. Insurer denial rates varied widely around this average, ranging from less than 1% to more than 80%. C.M.S. requires insurers to report the reasons for claims denials at the plan level. Of denials with a reason other than being out-of-network, about 16% were denied because the claim was for an excluded service, 10% due to lack of preauthorization or referral, and only about 2% based on medical necessity. Among 2% of claims identified as medical necessity denials, 1 in 5 were for behavioral health services. Most plan-reported denials (72%) were classified as ‘all other reasons,’ without a specific reason. As in our previous analysis of claims denials, we find that consumers rarely appeal denied claims and when they do, insurers usually uphold their original decision. In 2020, HealthCare.gov consumers appealed just over one-tenth of 1% of denied in-network claims, and insurers upheld most (63%) of denials on appeal. The Affordable Care Act (A.C.A.) requires transparency data reporting by all non-grandfathered employer-sponsored health plans and by non-group plans sold on and off the marketplace. … For example, transparency data could be helpful in oversight of compliance with the Mental Health Parity and Addiction Equity Act (M.H.P.A.E.A.), revealing how or whether claims denial rates differ for behavioral health vs other services. It could also make more transparent trends in the incidence and handling of claims for surprise medical bills, now protected under the No Surprises Act. Yet, the federal government’s broad authority to require transparency data reporting has not been fully implemented. Data that are collected are not audited, for example, to ensure issuers report data consistently. And data that are collected are not used in oversight nor to develop other tools or indicators to help consumers see and compare differences across plans. … Of the 213 major medical issuers in HealthCare.gov states that reported for the 2020 plan year, 144 show complete data on in-network claims received and denied. Together these issuers reported 230.9 million in-network claims received, of which 42.3 million were denied, for an average in-network claims denial rate of 18.3% Issuer denial rates ranged from 1% to 80% of in-network claims. In 2020, 28 of the 144 reporting issuers had a denial rate of less than 10%, 52 issuers denied between 10% and 19% of in-network claims, 36 issuers denied 20-30%, and 28 issuers denied more than 30% of in-network claims. Issuers denying over one-third of all in-network claims in 2020 included Celtic in 5 states (AR, IN, MO, TN, TX), Molina in 6 states (MI, MS, OH, SC, UT, WI), QualChoice in Arkansas, Ambetter in North Carolina, Oscar in 7 states (AZ, FL, MI, MO, Tn, TX, VA), and Meridian in Michigan.” Karen Pollitz, Matthew Rae and Salem Mengistu, “Claims Denials and Appeals in ACA Marketplace Plans in 2020,” Kaiser Family Foundation.