Thursday, September 3, 2009

California HMOs Deny 1 in 5 Claims

Thank you California Nurses Association for doing the first analysis of how many claims California insurers reject and don't pay. The result is shocking. One insurer (PacifiCare) denies 39.6% of claims. Anthem Blue Cross, the state's largest for-profit health plan rejected 28% of all claims. These denials, after premiums have been paid for months and years, reflect what is wrong with our insurance industry. Sure, the majority of Americans have health insurance, but is this how it is supposed to operate?

The spokesman for the California Assn. of Health Plans says the claims are denied for legitimate reasons. It is hard for me to see how almost 40% of health claims could be not legitimate. Was the paperwork not filled out correctly? Did the patient not really have a broken arm that needed treatment? Did the person go to an emergency department that was not contracted with the insurer? The treatment was experimental? I am racking my brain to come up with the possible excuses for denial. Keep in mind these denials for payment are all after care was given.

The Department of Managed Care, which is supposed to oversee the HMO insurance industry in California was criticized for not publishing this information themselves, since the data came from their own records. I was amused by their reply;

"It is important to point out that a denied claim means that the patient received the medically necessary services, but the doctor or hospital was not paid for that care," said spokeswoman Lynne Randolph.

Now that makes me feel a lot better.


Jonathan said...

Who are these people at these town hall meetings who don't want to change the healthcare system?

sunnydalai said...

I'm actually for rationing of health care, but I want it done by doctors. It is worth discussing whether a person of a certain age should be given a specific treatment that will only marginally prolong life . In any "group system", the rest of the participants subsidize the cost of these procedures. Soon we might be at the point where doctors can keep our bodies alive indefinitely, and then the real discussions begin.

ERP said...

I know that many claims are refused by software that automatically denies things if there is the slightest error or if it is even remotely unclear what the physician did for the patient. Many are then appealed and then paid by the plan when the MD who works for the company reviews them personally - often after a convo with the billing MD.

Toni Brayer MD said...

ERP: You are correct but these numbers came from the health plans, who are required to report denials and claims to Dept of Managed Care, and they are true denials.....hmmmm

ERP said...

Hmmm indeed. I know someone who is a medical director for a large urban based health plan (unfortunately not one with the best reputation) and they have a 4-5% refusal rate!!!!