[Insurers’ denial rates — a critical measure of how reliably
they pay for customers’ care — remain mostly secret to the public.
Federal and state regulators have done little to change that.]
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HOW OFTEN DO HEALTH INSURERS SAY NO TO PATIENTS? NO ONE KNOWS.  
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Robin Fields
June 28, 2023
ProPublica
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_ Insurers’ denial rates — a critical measure of how reliably
they pay for customers’ care — remain mostly secret to the public.
Federal and state regulators have done little to change that. _

health insurance claim form, by franchiseopportunitiesphotos (CC
BY-SA 2.0)

 

It’s one of the most crucial questions people have when deciding
which health plan to choose: If my doctor orders a test or treatment,
will my insurer refuse to pay for it?

After all, an insurance company that routinely rejects recommended
care could damage both your health and your finances. The question
becomes ever more pressing as many working Americans see their
premiums rise as their benefits shrink.

Yet, how often insurance companies say no is a closely held secret.
There’s nowhere that a consumer or an employer can go to look up all
insurers’ denial rates — let alone whether a particular company is
likely to decline to pay for procedures or drugs that its plans appear
to cover.

The lack of transparency is especially galling because state and
federal regulators have the power to fix it, but haven’t.

ProPublica, in collaboration with The Capitol Forum, has been
examining the hidden world of insurance denials. A previous story
detailed how one of the nation’s largest insurers flagged expensive
claims for special scrutiny
[[link removed]];
a second story showed how a different top insurer used a computer
program to bulk-deny claims
[[link removed]] for
some common procedures with little or no review.

The findings revealed how little consumers know about the way their
claims are reviewed — and denied — by the insurers they pay to
cover their medical costs.

When ProPublica set out to find information on insurers’ denial
rates, we hit a confounding series of roadblocks.

In 2010, federal regulators were granted expansive authority through
the Affordable Care Act to require that insurers provide information
on their denials. This data could have meant a sea change in
transparency for consumers. But more than a decade later, the federal
government has collected only a fraction of what it’s entitled to.
And what information it has released, experts say, is so crude,
inconsistent and confusing that it’s essentially meaningless.

The national group for state insurance commissioners gathers a more
detailed, reliable trove of information. Yet, even though
commissioners’ primary duty is to protect consumers, they withhold
nearly all of these details from the public. ProPublica requested the
data from every state’s insurance department, but none provided it.

Two states collect their own information on denials and make it
public, but their data covers only a tiny subset of health plans
serving a small number of people.

The minuscule amount of details available about denials robs consumers
of a vital tool for comparing health plans.

“This is life and death for people: If your insurance won’t cover
the care you need, you could die,” said Karen Pollitz, a senior
fellow at KFF (formerly known as the Kaiser Family Foundation) who has
written repeatedly about the issue. “It’s all knowable. It’s
known to the insurers, but it is not known to us.”

The main trade groups for health insurance companies, AHIP (formerly
known as America’s Health Insurance Plans) and the Blue Cross Blue
Shield Association, say the industry supports transparency and
complies with government disclosure requirements. Yet the groups have
often argued against expanding this reporting, saying the burdens it
would impose on insurance companies would outweigh the benefits for
consumers.

“Denial rates are not directly comparable from one health plan to
another and could lead consumers to make inaccurate conclusions on the
robustness of the health plan,” Kelly Parsons, director of media
relations for the Blue Cross Blue Shield Association, said in an
email.

The trade groups stress that a substantial majority of patient claims
are approved and that there can be good reasons — including errors
and incomplete information from doctors — for some to be denied.

“More abstract data about percentages of claims that are approved or
denied have no context and are not a reliable indicator of quality —
it doesn’t address why a claim was or was not approved, what
happened after the claim was not approved the first time, or how a
patient or their doctor can help ensure a claim will be approved,”
AHIP spokesperson Kristine Grow said in a written response to
questions from ProPublica. “Americans deserve information and data
that has relevance to their own personal health and circumstances.”

The limited government data available suggests that, overall, insurers
deny between 10% and 20% of the claims they receive. Aggregate
numbers, however, shed no light on how denial rates may vary from plan
to plan or across types of medical services.

Some advocates say insurers have a good reason to dodge transparency.
Refusing payment for medical care and drugs has become a staple of
their business model, in part because they know customers appeal less
than 1% of denials, said Wendell Potter, who oversaw Cigna’s
communications team for more than a decade before leaving the industry
in 2008 to become a consumer advocate.

“That’s money left on the table that the insurers keep,” he
said.

At least one insurer disputes this. Potter’s former employer, Cigna,
said in an email that his “unsubstantiated opinions” don’t
reflect the company’s business model. In a separate written
statement, Cigna said it passes on the money it saves “by lowering
the cost of health care services and reducing wasteful spending” to
the employers who hire it to administer their plans or insure their
workers.

The few morsels insurers have served up on denials stand in stark
contrast to the avalanche of information they’ve divulged in recent
years on other fronts, often in response to government mandates.
Starting last year, for example, insurers began disclosing the prices
they’ve negotiated to pay medical providers for most services.

Experts say it’ll take similar mandates to make insurers cough up
information on denials, in part because they fear plans with low
denial rates would be a magnet for people who are already ailing.

“Health plans would never do that voluntarily, would give you what
their claim denial rates are, because they don’t want to attract
sicker people,” said Mila Kofman, who leads the District of
Columbia’s Affordable Care Act exchange and previously served as
Maine’s superintendent of insurance.

About 85% of people with insurance who responded to a recent
KFF survey said they want regulators to compel insurers to disclose
[[link removed]] how
often they deny claims. Pollitz, who co-authored a report on the
survey, is a cancer survivor who vividly recalls her own experiences
with insurance denials.

“Sometimes it would just make me cry when insurance would deny a
claim,” she said. “It was like, ‘I can’t deal with this now,
I’m throwing up, I just can’t deal with this.’”

She should have been able to learn how her plan handled claims for
cancer treatment compared with other insurers, she said.

“There could be much more accountability.”In September 2009, amid
a roiling national debate over health care, the California Nurses
Association made a startling announcement: Three of the state’s six
largest health insurers had each denied 30% or more of the claims
submitted to them in the first half of the year.

California insurers instantly said the figures were misleading,
inflated by claims submitted in error or for patients ineligible for
coverage.

But beyond the unexpectedly high numbers, the real surprise was that
the nurses association was able to figure out the plans’ denial
rates at all, by using information researchers found on the California
Department of Managed Health Care’s website.

At the time, no other state or federal regulatory agency was
collecting or publishing details about how often private insurers
denied claims, a 2009 report
[[link removed]] by
the Center for American Progress found.

The Affordable Care Act, passed the following year, was a game changer
when it came to policing insurers and pushing them to be more
transparent.

The law took aim at insurers’ practice of excluding people with
preexisting conditions, the most flagrant type of denial, and required
companies offering plans on the marketplaces created under the law to
disclose their prices and detail their benefits.

A less-noticed section of the law demanded transparency from a much
broader group of insurers about how many claims they turned down, and
it put the Department of Health and Human Services in charge of making
this information public. The disclosure requirements applied not only
to health plans sold on the new marketplaces but also to the employer
plans that cover most Americans.

The law’s proponents in the Obama administration said they
envisioned a flow of accurate, timely information that would empower
consumers and help regulators spot problematic insurers or practices.

That’s not what happened.

The federal government didn’t start publishing data until 2017 and
thus far has only demanded numbers for plans on the federal
marketplace known as Healthcare.gov. About 12 million people get
coverage from such plans — less than 10% of those with private
insurance. Federal regulators say they eventually intend to compel
health plans outside the Obamacare exchanges to release details about
denials, but so far have made no move to do so.

Within the limited universe of Healthcare.gov, KFF’s analyses show
that insurers, on average, deny almost 1 in 5 claims
[[link removed]] and
that each year some reject more than 1 in 3.

But there are red flags that suggest insurers may not be reporting
their figures consistently. Companies’ denial rates vary more than
would be expected, ranging from as low as 2% to as high as almost 50%.
Plans’ denial rates often fluctuate dramatically from year to year.
A gold-level plan from Oscar Insurance Company of Florida rejected 66%
of payment requests in 2020, then turned down just 7% in 2021. That
insurer’s parent company, Oscar Health, was co-founded by Joshua
Kushner, the younger brother of former President Donald Trump’s
son-in-law Jared Kushner.

An Oscar Health spokesperson said in an email that the 2020 results
weren’t a fair reflection of the company’s business “for a
variety of reasons,” but wouldn’t say why. “We closely monitor
our overall denial rates and they have remained comfortably below 20%
over the last few years, including the 2020-2021 time period,” the
spokesperson wrote.

Experts say they can’t tell if insurers with higher denial rates are
counting differently or are genuinely more likely to leave customers
without care or stuck with big bills.

“It’s not standardized, it’s not audited, it’s not really
meaningful,” Peter Lee, the founding executive director of
California’s state marketplace, said of the federal government’s
information. Data, he added, “should be actionable. This is not by
any means right now.”

Officials at the Centers for Medicare & Medicaid Services, which
collects the denial numbers for the federal government, say they’re
doing more to validate them and improve their quality. It’s notable,
though, that the agency doesn’t use this data to scrutinize or take
action against outliers.

“They’re not using it for anything,” Pollitz said.

Pollitz has co-authored four reports that call out the data’s
shortcomings. An upshot of all of them: Much of what consumers would
most want to know is missing.

The federal government provides numbers on insurers’ denials of
claims for services from what the industry calls “in-network”
medical providers, those who have contracts with the insurer. But it
doesn’t include claims for care outside those networks. Patients
often shoulder more costs for out-of-network services, ramping up the
import of these denials.

In recent years, doctors and patients have complained bitterly that
insurers are requiring them to get approval in advance for an
increasing array of services, causing delays and, in some instances,
harm. The government, however, hasn’t compelled insurers to reveal
how many requests for prior authorization they get or what percent
they deny.

These and other specifics — particularly about which procedures and
treatments insurers reject most — would be necessary to turn the
government’s data into a viable tool to help consumers choose health
plans, said Eric Ellsworth, the director of health data strategy at
Consumers' Checkbook, which designs such tools.

A spokesperson for CMS said that, starting in plan year 2024, the
agency will require insurers offering federal marketplace plans to
submit a few more numbers, including on out-of-network claims, but
there’s no timeline yet for much of what advocates say is necessary.

Another effort, launched by a different set of federal regulators,
illustrates the resistance that government officials encounter when
they consider demanding more.

The U.S. Department of Labor regulates upwards of 2 million health
plans, including many in which employers pay directly for workers’
health care coverage rather than buying it from insurance companies.
Roughly two-thirds of American workers with insurance depend on such
plans, according to KFF.

In July 2016, an arm of the Labor Department proposed rules requiring
these plans to reveal a laundry list of never-before-disclosed
information, including how many claims they turned down.

In addition, the agency said it was considering whether to demand the
dollar amount of what the denied care cost, as well as a breakdown of
the reasons why plans turned down claims or denied behavioral health
services.

The disclosures were necessary to “remedy the current failure to
collect data about a large sector of the health plan market,” as
well as to satisfy mandates in the Affordable Care Act and provide
critical information for agency oversight, a Labor Department
factsheet said.

Trade groups for employers, including retailers and the construction
industry, immediately pushed back.

The U.S. Chamber of Commerce said complying with the proposal would
take an amount of work not justified by “the limited gains in
transparency and enforcement ability.” The powerful business group
made it sound like having to make the disclosures could spark
insurance Armageddon: Employers might cut back benefits or
“eliminate health and welfare benefits altogether.”

Trade groups for health insurance companies, which often act as
administrators for employers that pay directly for workers’ health
care, joined with business groups to blast the proposal. The Blue
Cross Blue Shield Association called the mandated disclosures
“burdensome and expensive.” AHIP questioned whether the Labor
Department had the legal authority to collect the data and urged the
agency to withdraw the idea “in its entirety.”

The proposal also drew opposition from another, less expected quarter:
unions. Under some collective bargaining agreements, unions co-sponsor
members’ health plans and would have been on the hook for the new
reporting requirements, too. The AFL-CIO argued the requirements
created a higher standard of disclosure for plans overseen by the
Labor Department. To be fair and avoid confusion, the group said, the
Labor Department should put its rules on ice until federal health
regulators adopted equivalent ones for plans this proposal didn’t
cover.

That left the transparency push without political champions on the
left or the right, former Assistant Secretary of Labor Phyllis Borzi,
who ran the part of the agency that tried to compel more disclosure,
said in a recent interview.

“When you’re up against a united front from the industry, the
business community and labor, it’s really hard to make a
difference,” she said.

By the time the Labor Department stopped accepting feedback, Donald
Trump had been elected president.

One trade association for large employers pointed out that the
Affordable Care Act, which partly drove the new rules, was “a law
that the incoming Administration and the incoming leadership of the
115th Congress have vowed to repeal, delay, dismantle, and otherwise
not enforce.”

The law managed to survive the Trump administration, but the Labor
Department’s transparency push didn’t. The agency withdrew its
proposal in September 2019.

A Labor Department spokesperson said the Biden administration has no
immediate plan to revive it.

Ultimately, it’s the National Association of Insurance
Commissioners, a group for the top elected or appointed state
insurance regulators, that has assembled the most robust details about
insurance denials.

The association’s data encompasses more plans than the federal
information, is more consistent and captures more specifics, including
numbers of out-of-network denials, information about prior
authorizations and denial rates for pharmacy claims. All states except
New York and North Dakota participate.

Yet, consumers get almost no access. The commissioners’ association
only publishes national aggregate statistics, keeping the rest of its
cache secret.

When ProPublica requested the detailed data from each state’s
insurance department, none would hand it over. More than 30 states
said insurers had submitted the information under the authority
commissioners are granted to examine insurers’ conduct. And under
their states’ codes, they said, examination materials must be kept
confidential.

The commissioners association said state insurance regulators use the
information to compare companies, flag outliers and track trends.

Birny Birnbaum, a longtime insurance watchdog who serves on the
group’s panel of consumer representatives, said the association’s
approach reflects how state insurance regulators have been captured by
the insurance industry’s demands for secrecy.

“Many seem to view their roles as protectors of industry
information, as opposed to enforcers of public information laws,”
Birnbaum said in an email.

Connecticut and Vermont compile their own figures and make them
publicly accessible. Connecticut began reporting information on
denials first, adding these numbers to its annual insurer report card
in 2011.

Vermont demands more details, requiring insurers that cover more than
2,000 Vermonters to publicly release prior authorization and
prescription drug information that is similar to what the state
insurance commissioners collect. Perhaps most usefully, insurers have
to separate claims denied because of administrative problems — many
of which will be resubmitted and paid — from denials that have
“member impact.” These involve services rejected on medical
grounds or because they are contractually excluded.

Mike Fisher, Vermont’s state health care advocate, said there’s
little indication consumers or employers are using the state’s
information, but he still thinks the prospect of public scrutiny may
have affected insurers’ practices. The most recent data shows
Vermont plans had denial rates between 7.7% and 10.26%, considerably
lower than the average for plans on Healthcare.gov.

“I suspect that’s not a coincidence,” Fisher said. “Shining a
light on things helps.”

Despite persistent complaints from insurers that Vermont’s
requirements are time-consuming and expensive, no insurers have left
the state over it. “Certainly not,” said Sebastian Arduengo, who
oversees the reporting for the Vermont Department of Financial
Regulation.

In California, once considered the most transparent state, the
Department of Managed Health Care in 2011 stopped requiring insurance
carriers to specify how many claims they rejected.

A department spokesperson said in an email that the agency follows the
requirements in state law, and the law doesn’t require health plans
to disclose denials.

CONGRESSIONAL COMMITTEE, REGULATORS QUESTION CIGNA SYSTEM THAT LETS
ITS DOCTORS DENY CLAIMS WITHOUT READING PATIENT FILES
[[link removed]]

The state posts reports that flag some plans for failing to pay
claims fairly and on time [[link removed]].
Consumers can use those to calculate bare-bones denial rates for some
insurers, but for others, you’d have to file a public records
request to get the details needed to do the math.

Despite the struggles of the last 15 years, Pollitz hasn’t given up
hope that one day there will be enough public information to rank
insurers by their denial rates and compare how reliably they provide
different services, from behavioral health to emergency care.

“There’s a name and shame function that is possible here,” she
said. “It holds some real potential for getting plans to clean up
their acts.”

Kirsten Berg
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research. David Armstrong
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Rucker [[link removed]] contributed
reporting.

_Robin Fields [[link removed]] is a
reporter with ProPublica. She joined ProPublica as a reporter in 2008,
became a senior editor in 2010 and served as managing editor from 2013
to 2022 prior to returning to the reporter role._

* _ [email protected]
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* _ @fieldsrobin [[link removed]]_

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