Healthcare.gov plans denied 20% of claims in 2023


Photo courtesy of healthcare.gov
Insurers of qualified health plans (QHPs) sold on Healthcare.gov denied an average of 20% of all claims in 2023 – 19% of in-network claims and and 37% of out-of-network claims, finds a new KFF survey.
The in-network denial rate ranged widely, with significant variation by insurer and by state from 1 to 54%.
Even though information on the reasons for in-network claims denials was scant, the most common reason cited by insurers was “Other” at 34% followed by administrative reasons (18%), excluded service (16%), lack of prior authorization or referral (9%), and only 6% based on lack of medical necessity.
Consumers rarely appeal denied claims, according to KFF. In all, fewer than 1% of denied claims were appealed in 2023. When patients appeal, insurers typically uphold their original decision, with 56% of appeals being upheld.
Marketplace enrollees filed 5,000 external appeals in 2023, or 3% of all upheld internal appeals. The rate at which external appeals were upheld couldn’t be calculated due to limitations in the data.
WHAT’S THE IMPACT
Insurers reported receiving 425 million claims in 2023, with 92% (392 million claims) filed for in-network services. Of these in-network claims, 73 million were ultimately denied. Out-of-network claims totaled 33 million.
The differences in geographies were stark. The state with the highest average in-network denial rate for HealthCare.gov insurers was 34%, in Alabama, and the lowest was 6%, in South Dakota. But because there were large variations among insurers, the geographical differences didn’t necessarily correspond to the differences among insurers.
For example, while the average denial rate for insurers in Florida (16%) was slightly below the national average (19%), denial rates for insurers in Florida had more variability than any other state, ranging from 8% to 54% – the highest single insurer-level denial rate in the country.
Denial rates varied only slightly between most plan metal levels. On average, in 2023, HealthCare.gov insurers denied 19% of in-network claims in their bronze plans, 18% in silver plans, 18% in gold plans, 15% in platinum plans, and 27% in catastrophic plans.
Enrollees have felt the impact of the denied claims. The 2023 KFF Survey of Consumer Experiences with Health Insurance found that 58% of insured adults said they have experienced a problem using their health insurance, including denied claims. Four in 10 (39%) of those who reported having trouble paying medical bills said that denied claims contributed to their problem.
THE LARGER TREND
Fewer than half of working-age U.S. adults in a 2024 Commonwealth Fund Survey challenged denied claims, mostly because they weren’t aware they had the right to do so.
Yet half of all adults who challenged coverage denials reported success in getting some or all denied services approved. Similarly, more than one-third (38%) of those who disputed medical bills saw their balances reduced or eliminated.
Nearly 15% of all claims submitted to private payers for reimbursement are initially denied, including many that were pre-approved to move forward through the prior authorization process, according to a national survey of hospitals, health systems and post-acute care providers conducted in March by Premier.
An average of 3.2% of all claims denied included those that were pre-approved via the prior authorization process.
Despite the initial denial, more than 54% of claims rejected by private payers were ultimately paid. Many others may have been ultimately paid but were not fully pursued for payment due to issues such as resource constraints.
Denials tended to be more prevalent for higher-cost treatments, with the average denial pegged to charges of $14,000 and up.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.