Report: Calif. Health Insurers Deny 26% of All Claims

February 10, 2011

California’s largest, private health insurers rejected 26 percent of all claims –13.1 million — submitted for the first three quarters of 2010, according to new findings by the Institute of Health and Socio-Economic Policy, the research arm of California Nurses Association/National Nurses United.

According to the report, claims denial rates by the state’s leading insurers included:

  • PacifiCare — 43.9 percent
  • Cigna – 39.6 percent
  • Anthem Blue Cross – 27.3 percent
  • HealthNet – 24.1 percent
  • Blue Shield – 21.9 percent
  • Kaiser Permanente – 20.2 percent
  • Aetna – 5.9 percent

Since 2002, these seven firms, which account for more than three-fourths of all insurance enrollees in California, have rejected 67.5 million claims, the report said. Claims denials generally refer to insurance payment rejections.

Cigna, which denied 40 percent of claims, showed the biggest increase from 2009, increasing its rejection rate by 5.3 percent. Kaiser Permanente accounted for the biggest drop, a one year decline of 7.4 percent in denials. Blue Shield, which has attracted recent notoriety for its individual premium rate hikes of up to 59 percent, slightly increased its denial rate by 0.3 percent from 2009.

“These rejection rates demonstrate one reason medical bills are a prime source of personal bankruptcies as doctors and hospitals will push patients and their families to make up what the insurer denies,” said CNA/NNU Co-President DeAnn McEwen. The national reform law signed by President Obama last spring has, to date, had no impact on the high pace of insurance denials, she noted.

“The denials also illustrate the appalling degree of bureaucracy in a wasteful system; for all the handwringing about ‘government,’ health care, a real public program like Medicare is far less wasteful than the bloated private system that so casually rejects such a high number of medical claims,” McEwen said.

CNA/NNU research director Don DeMoro notes the insurers fail to distinguish between “eligible” and “ineligible” claims denied in data they provide the state. And, insurers can choose from a broad list of “ineligibility” criteria offered by the state including disputes over contracts, interest or late payments, benefits “not covered,” and court disputes.

DeMoro called on the state to require more transparency in reporting. If further national reform is not forthcoming, he said, individuals and employers alike should “have access to such data to aid them in determining the best value for their money and the best care for all concerned.”

“The grave and potentially irreparable nature of the risk to patients subject to unfair claims denials cannot be overstated and certainly justifies the minimal cost to managed care organizations to provide accurate and meaningful claims denial reports,” DeMoro said.

Source: CNA/UUN

Topics Carriers California Claims

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