The murder of UnitedHealthcare CEO Brian Thompson on December 3 focused national attention on the denial of coverage claims by health insurers, purportedly a motive for the killing.
After Thompson’s death, patients and doctors aired their personal stories on social media, while others posted vitriolic comments about insurers, and Thompson’s alleged assassin became a media sensation.
In a viral post on X, New York emergency medicine physician Zachary Levy, M.D., said UnitedHealthcare denied coverage for one of his patients who was in a coma, on a ventilator, and suffering from heart failure, “Because I haven’t proven to them that caring for her in the hospital was ‘medically necessary,’” Newsweek reported on January 1.
Denial Rates Vary Widely
Health insurers increasingly deny patients’ claims, wrote Elisabeth Rosenthal, an editor at KFF Health News, in an opinion piece published in The Washington Post in 2023.
“It’s a handy way for insurers to keep revenue high—and just the sort of thing that provisions of the Affordable Care Act [ACA] were meant to prevent,” wrote Rosenthal (see related article, page 17).
There is a wide variation in claim denial rates among health insurers offering policies on the ACA exchanges, according to a 2023 analysis of data from the Centers for Medicare and Medicaid Services (CMS) by the KFF research organization.
In Obamacare marketplace policies, “nearly 17 percent of in-network claims were denied in 2021,” stated KFF. “Insurer denial rates varied widely around this average, ranging from 2 percent to 49 percent.”
Few Appeals Filed
Most patient-claim denials are for unstated reasons, KFF reports.
“Of in-network claims, about 14 percent were denied because the claim was for an excluded service, 8 percent due to lack of preauthorization or referral, and only about 2 percent based on medical necessity. Most plan-reported denials (77 percent) were classified as ‘all other reasons,’” the study states.
Few of the denied claims were appealed to the insurer, and even fewer claim denials were reversed, KFF said.
“In 2021, HealthCare.gov consumers appealed less than two-tenths of 1 percent of denied in-network claims, and insurers upheld most (59 percent) denials on appeal,” KFF reported.
Preauthorization Harm Cited
Most doctors say prior authorization requirements imperil treatment outcomes and employee productivity, according to a nationwide survey of 1,000 physicians by the American Medical Association (AMA), released on June 20, 2024.
“Nearly a quarter of physicians (24 percent) reported that prior authorization led to an adverse event for a patient, and more than nine in 10 reported prior authorization has a negative impact on patient outcomes (93 percent) and delays access to care (94 percent),” the AMA reported.
“More than a quarter of physicians (27 percent) reported prior authorization requests are often or always denied, and more than four in five (87 percent) reported prior authorization requirements lead to higher overall use of resources that result in unnecessary waste,” the AMA stated.
‘Insurance Companies Interfere’
Doctors often cite prior authorization as a reason for turning away from traditional insurance payment models, says Mark Blocher, M.D., CEO of Christian Healthcare Centers and author of Missionary Medicine: Restoring the Soul of Healthcare.
“One of the frustrations expressed by physicians who have left the fee-for-service system is how insurance companies interfere with treatment decisions,” Blocher told Health Care News. “Although prior authorizations have declined with regard to some treatment decisions—for example, imaging services—they have increased for brand-name medications.”
Insurers are directing doctors’ medical decisions, says Blocher.
“Frequently, insurance companies require doctors to try treatments the doctor knows will not work for the patient, in order to finally authorize prescribing a medication that would work best for the patient,” said Blocher. “This frustrates both patients and providers, delays effective treatment, and can lead to worse outcomes.”
‘Willing to Bankrupt Patients’
Health insurers are very coy about disclosing coverage details to patients, says Chad Savage, M.D., founder of the Your Choice Direct Care medical practice and a policy advisor to The Heartland Institute, which co-publishes Health Care News.
“Absolutely, insurers are intentionally obtuse,” said Savage. “This results in surprise bills where patients learn unexpectedly that a service is not covered, sometimes many months after the service is received.”
This lack of transparency is unique to health care, says Blocher.
“Health care is the only U.S. industry that conceals the true cost of its services and does not disclose to its ‘customers’ what its services cost until after they’ve been delivered. What other industry is allowed to operate that way?” (See related article, opposite page.)
“Not only is there a lack of transparency, but there is also a lack of accountability,” said Blocher. “This is an industry that forces people to sign blank checks for the services it provides, and is willing to bankrupt patients when they are unable to pay its grossly inflated charges.”
‘Patients Know Very Little’
Federal law requires hospitals to disclose prices to patients, but CMS is not enforcing it, says Blocher.
“Although transparency rules were enacted in 2021, requiring hospitals to publish prices for their services, according to the Office of Inspector General, 46 percent of the 5,879 hospitals that were required to comply did not make information on their standard charges available to the public,” said Blocher. “CMS only fined three hospitals for noncompliance out of the thousands of U.S. hospitals covered by the rule. The few who do comply find ways to work around the rule, publishing only a small number of prices.
“Most insured patients know very little about what their plan covers until they use it and discover what it doesn’t cover,” said Blocher. “Hospitals and insurance companies spend a lot of money to keep it that way.”
Joe Barnett ([email protected]) writes from Arlington, Texas.