Regular readers know I have strong reservations about surveys, especially related to healthcare. This one is no exception, but worth reading. These are excerpts only and the links are to charts.
This topic interests me because I spent many decades managing health plans, listening to employee problems and complaints about their coverage also also listening to the other side of the story from claim administrators.
When evaluating things liked denied claims there are several things to keep in mind;
- Insurance companies do not have policies to deny claims to increase profits. Large employers are self insured so there is no incentive for the insurance company acting as a claim administrator to deny a claim
- There are screw ups that inaccurately deny a claim and can be corrected
- Problems can start with coding errors by the providers office
- Providers may provide inaccurate information leading to unrealistic expectations of coverage
- Many coverages have specific and utilization based limits that are not understood
- Patients tend to overstate the issue or simply provide inaccurate information
A KFF survey of adults with health insurance found that roughly 6 in 10 insured adults experience problems when they use their insurance. Problems studied include denied claims, network adequacy issues, preauthorization delays and denials, and others.
People with private insurance are more likely to have denied claims than people with public coverage
The KFF Survey of Consumer Experiences with Health Insurance found that 18% of insured adults say they experienced denied claims in the past year. This problem was somewhat more common among people with employer-sponsored insurance (21%) and marketplace insurance (20%), less so among people with Medicare (10%) or Medicaid (12%).
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People who use more health services are also more likely to experience denied claims. Among high utilizers – patients who had more than 10 provider visits in the past year – 27% experienced a denied claim, while similar shares of moderate utilizers – who had 3-10 visits in a year – experienced a denied claim (21%). By contrast, smaller shares of patients who had fewer than 3 provider visits in a year experienced a denied claim (14%).
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About one in five insured adults who used emergency room services (22%) or mental health services (22%) say they had a denied claim, though there is no way to tell from the survey if the denials were for claims related to these specific services. Finally, people who identify as LGBT are nearly twice as likely to experience denied claims compared to other consumers (30% vs. 17%).
People with denied claims report more difficulty understanding coverage
Difficulty understanding aspects of their health coverage was reported more often among consumers who experienced denied claims compared to others. A majority of consumers who experienced denied claims report difficulty understanding what their health insurance covers (65%), what they’ll owe out of pocket (57%), and their EOBs (52%). It is not clear whether these challenges understanding coverage contribute to claims being denied, or whether denied claims compound the confusion consumers otherwise experience understanding their coverage.
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Consumers often cannot resolve problems satisfactorily
Among insured adults who report insurance problems in the past year, half (50%) say the biggest problem they had with their insurance was solved to their satisfaction. The survey did not ask consumers to specify which of their insurance problems was the “biggest.” However, consumers whose problems included a denied claim were half as likely to say their biggest problem was resolved satisfactorily compared to those whose problems did not include a denied claim (29% vs 59%), suggesting that denied claims may be especially challenging for consumers to solve on their own, though it may not be for lack of trying.
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Discussion
Nearly 1 in 5 insured adults (18%) said they experienced a denied claim in the past year. Among people who use the most health care, 27% experienced a denied claim. Claims denials appear to be connected to the complexity of insurance for consumers; while half of all insured adults find some aspect of insurance difficult to understand, among those who experience claims denials it is nearly 8 in 10. In addition, consumers whose problems include a denied claim are far less likely to have resolved their biggest insurance problem satisfactorily compared to those whose problems do not include denied claims. Serious health and financial consequences arise as a direct result of insurance problems, and consumers whose problems include denied claims are far more likely to have needed care delayed or denied, to experience a decline in health status, and to face higher out-of-pocket costs.
The KFF survey cannot tell how often claims denials are incorrect, or the extent to which consumer difficulties understanding the complexity of health coverage may contribute to denials. Increased oversight could help supply this information. A federal law requiring private plans to disclose data on denied claims remains largely unimplemented. Such data could be an important tool to monitor trends and differences in denial rates, and to hold insurers accountable to meet legal standards, such as requirements to provide mental health parity and coverage for surprise medical bills.
This work was supported in part by a grant from the Robert Wood Johnson Foundation. The views and analysis contained here do not necessarily reflect the views of the Foundation. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.
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