1) How often do insurance companies "arbitrarily" deny claims?
This figure doesn't seem to be popular, even amongst groups or lawyers who help you appeal insurance denial claims. For example, "healthclaimappeals.org" only quotes a percentage for Medicare (10%, non-sourced) but declines to give one for private insurers.[1] Office of Health and Human Services sampled Medicaid in 8 states in 2000, finding "On average, about 15 percent of claims submitted for payment contain fatal
errors."[2] Maryland passed "clean claims" legislation in an effort to reduce the various clerical errors that result in denied claims. They now track claim denial rates to guage the success of the legislation. Using a Base Group of both private insurers and HMOs they find that in 2007 15.7% of all claims were denied.[3] Assuming Maryland is average, then both public and private insurance have effectively the same denial rate.
Answer: Both public and private insurers deny claims roughly 15% of the time.
2) What are the "arbitrary" reasons to deny claims?
"healthclaimappeals.org" suggests three:
healthclaimappeals.org said:
" * It is a duplicate or inauthentic claim. This happens more than you might think. Sometimes individuals or their health insurance provider will accidentally submit the same claim more than one once for payment. Insurance plans are also on the lookout for health insurance fraud, which is a major problem confronting the system.
* The policy that was purchased by you or your employer or established by the public program doesn’t cover the service or product in the claim. As an example, some plans don’t cover dental services or elective procedures.
* The claim is for a service or product that the medical community considers to be experimental because it has not been proven to be safe and effective. Most plans purchased by employers and individuals do not cover experimental treatment."
[1]
Office of Health and Human Servies suggests:
OHHS said:
"The most common fatal errors include missing or erroneous:
* provider and patient identification numbers,
* birth dates,
* diagnostic information, and
* prior authorization information."
[2]
Maryland Insurance Administration reports the most common reasons are:
MIA said:
"* Duplicate claim submission (31.7 percent)
* A pre-treatment authorization or referral for services was not obtained or unauthorized services performed were not covered by plan (19.8 percent)
* The patient was not covered or eligible for benefits at the time services occurred (9 percent)
* The patient had met the maximum benefit at the time services occurred (9 percent)"
[3]
Answer: The most common reasons are either insufficient information (for Medicare), or the claim is a duplicate (for private insurers). Procedure not covered or procedure considered unsafe or ineffective are secondary.
3) Of the reasons given for denying claims, what impact do doctors employed by insurance companies have?
If we assume that Maryland's "clean claims" represent those claims that are free of clerical errors, and that the only remaining reason for denial was the influence of an "in house" doctor (this is a generous assumption); then the percentage of clean claims denied can work as a proxy for "claim denied due to insurance doctor influence". For 2007 5.3% of "clean claims" were denied. For 2004 - 2006 the average was 1.5%.[3] Possible reasons for the increase in 2007 are provided in the report, "The most significant change in 2007 from the previous three years is the nearly four-fold increase in the number of claims denied because a pre-treatment authorization or referral for services was not obtained or unauthorized services performed." [3]
Answer: Insurance company doctors are responsible for between 1.5% and 5.3% of claims being denied (probably closer to former given both the lax assumptions and the anomaly of 2007 data).
Conclusion: Roughly 15% of claims are denied, and almost a third of those are denied
because they are duplicates. Medical doctors employed by insurance companies have very little impact on the rate of claim denials, accounting for 5% or less of denials. Further, this assumes that all "in house" doctors act contrary to overall medical "best practices"; which has yet to be demonstrated. Banning doctors from being employed by insurance agencies will have little impact on reducing claim denials.
J
[1]
Frequently Asked Questions - HealthClaimAppeals.org
[2]
http://www.oig.hhs.gov/oei/reports/oei-05-99-00071.pdf
[3]
http://www.mdinsurance.state.md.us/sa/documents/Cleanclaimsreport05-07-final01-09.pdf
