Less than half of patients challenge claim denials: report

By Alex Kacik / August 1, 2024

Insurers' claim denials are driving up patients’ healthcare costs and delaying care, but many patients don't know they can challenge denials, according to new research from the Commonwealth Fund.

Nearly half of patients under the age of 65 surveyed by the Commonwealth Fund reported receiving a medical bill or copayment in the past year for a service they thought should have been free or covered by their insurance. Less than half said they challenged their bills, while 38% of patients who did said insurers reduced or eliminated the charges, the survey revealed.

Among those who didn't contest a bill, close to half said they didn't know they could do so or who to contact.

As a result, 59% of patients who experienced a denial said their care was delayed, and 47% reported worse health outcomes.

The nonprofit healthcare policy research group polled more than 4,800 adults from mid-April through July of last year.

The Affordable Care Act authorizes patients to appeal insurers' coverage decisions and requires insurers to standardize the appeals process, said Sara Collins, coauthor of the study and a senior scholar at Commonwealth.

“These are pretty big red flags for policymakers," she said. "The law put rules in place as to how insurance companies should handle appeals — it is not clear if many people are aware of that."

Federal and state agencies should crack down on insurers that do not properly publicize the claims denial appeal process, as well as more closely monitor denial rates among commercial insurers, Collins said. Collins pointed to a Connecticut law implemented last year requiring insurers to prominently point to a statewide consumer assistance program on the front page of all denials. That has led to a increase in appeals, she said.

Insurers are denying claims more frequently and ramping up prior authorization requirements, providers say.

Federal agencies and states have tried to limit claim denials and streamline prior authorization through new laws and regulations.

The Centers for Medicare and Medicaid Services finalized a rule in January requiring Medicare Advantage, Medicaid, Children’s Health Insurance Program and Affordable Care Act exchange plans to respond to standard prior authorization requests within seven days and to urgent requests within three days.

Last year, Washington D.C. and nine states, including New Jersey, Tennessee and Texas, passed laws reforming the prior authorization process, according to the American Medical Association. Many other states, including California and North Carolina, are considering similar bills.