Every day, clinicians order critical diagnostic tests and medical treatments for their patients. And every day, insurance companies deny coverage for some of those.
The percentage of claims denied by insurers is difficult to quantify, though studies suggest it might be as high as one in five for plans sold through federally facilitated marketplace. Collectively, insurers deny upwards of 850 million claims annually and just 6% of denials hinged on the medical necessity of the treatment.
Few Patients Appeal, But Most Succeed
While denials can be appealed, most providers and patients don’t because the process is too complex or time consuming to fight. Even when appeals are filed, efforts may fall short or insurers may take too long to respond, leading some patients to take steps like carbon-copying executives and regulators on their claim correspondence or turning to third-party services like Claimable for assistance.
Of the appeals submitted, about three quarters result in approval. This astounds many patients and providers, who rightly raise questions about why so many claims are rejected in the first place.
Even if a claim is ultimately approved, the delay allows time for disease progression – sometimes with irreversible impact. Treatable cancers become inoperable. Minor organ damage becomes severe. New symptoms emerge. Time spent waiting for an insurer to change its ruling is time some patients simply don’t have.
Rare Disease Treatments Face Higher Barriers
For patients with rare diseases, the stakes are especially high. These patients are more likely to rely on off-label treatments because with relatively few impacted patients, disease specific treatment options are very limited. As a result, there are few if any medications FDA-approved medicines indicated for many rare diseases. This gives insurers an open door to reject treatments as “unproven” or “experimental.”
Patients can appeal the denial, but the process is opaque and difficult to navigate with no assurance of success. Even for rare diseases with FDA-approved therapies, insurers frequently place red tape in front of patients trying to access them, leading to delays or denials.
Timely access to medication is critical; some therapies are less effective the longer one waits to start them. Rare disease families have been known to deplete their savings to pay for treatments insurers refuse to cover in part or fully.
Red Tape Fuels Physician Burnout
Coverage battles take a toll not just on those in need of care, but also on the clinicians who fight for their patients’ needs. Prior authorization hurdles contribute to burnout among health care providers.
Insurers defend their policies as necessary to control costs. However, with providers spending an average of 14 hours a week and a total of $26.7 billion annually to comply with authorization requests, costs aren’t being controlled as much as they are being shifted to the clinician office and the patient.
The Case for Reform
Health insurance should prioritize patient-centered care. Yet excessive claim denials and heavy-handed use of utilization management tactics do the opposite. Without adequate coverage, many patients forgo prescribed treatments. Others face financial hardship by paying for care out of pocket.
Policymakers and advocates have pushed back against the use of AI to deny claims without human review. And hospitals have raised the issue as they are forced to cover emergency treatments that insurers won’t.
As discussions about utilization management tool reform gain traction, policymakers should offer solutions that increase access, promote transparency and reduce barriers to clinician-prescribed care. Patients and their caretakers deserve better than waiting on hold.
