Years ago, when I was a graduate student, I had dental work done at Baylor Dental College. One procedure had to do with an impacted wisdom tooth that had to be cut out. I forgot the details, but my dental insurer Humana denied the claim saying it would not pay for more than one procedure a day. The dental business office said that made no sense since there was only one procedure. Being busy with school I never got around to appealing the denial and ended up eating the $850 cost. It was a claim I probably would have won had I taken the time, and acquired the knowledge, on how to appeal.
The Wall Street Journal reports that health insurers deny 850 million claims a year. The small number of people who appeal often win.
Health insurers process more than five billion payment claims annually, federal figures show. About 850 million are denied, according to health-policy nonprofit KFF. Less than 1% of patients appeal.
Few people realize how worthwhile those labors can be: Up to three-quarters of claim appeals are granted, studies show.
The WSJ article discussed an anecdote about a mother trying to get her young daughter a treatment she thought might work when previous treatments had failed. This raises an interesting question: how many denials are for aggressive therapies and how many are paperwork exercises (like mine above) where a treatment mistakenly denied (on purpose) on a technicality?
My claim would likely have been easy to appeal, only requiring a few hours on the phone while one customer service representative after another stalled me. But I do not know that for sure. It may have been like working for minimum wage at a time when I had little extra time. It is a different story for when patients are trying to get a denied prior authorization for a treatment approved:
Patients who fight denied claims must marshal evidence from medical studies, navigate dense paperwork and spend hours on the phone during what is often one of the most difficult times of their lives. They debate insurers over whether a patient might ever recover from a stroke, or whether an expensive new treatment holds real promise.
The sense of helplessness that many people feel when a claim is denied and the frustration at having to make calls to appeal is behind the current backlash against health insurers. When the CEO of UnitedHealthcare was gunned down on a New York City street he received little sympathy. Some people even called it karma, as though an actual murderer had been brought to justice. The last I looked more than $300,000 had been donated to the perpetrator’s legal defense.
The WSJ reports that rare medical cases are especially prone to denials, saying:
Rare cases often put patients and insurers in protracted conflict. Some people want experimental treatments that insurers reject because they aren’t thoroughly proven to work. But for patients with rare conditions, the number of cases are so small it’s difficult to widely document a drug’s effects.
Americans have a love/hate relationship with health insurers. As an aside, if they love to hate them so much, why don’t they boycott them? The answer is because Americans want their employer, their government or if no other option, themselves, to pay a premium and get unlimited benefits with no scrutiny. For their part, medical providers also have a love/hate relationship with health insurers. Providers continually complain about stingy, obstructive insurers but are loath to drop insurance and go all-cash, probably because patients are even harder to collect from than health insurers.
Earlier I wrote that I’m slightly sympathetic with insurers because they have a tough job. Insurers get heaps of score despite the fact they are only one of the guilty parties in our dysfunctional health care system. Patients want it all and they want it now. Providers want an unlimited pool of cash they can draw from with little pushbacks, or limits on what they can charge. As you can see, these three stakeholders create an impossible dilemma, making it impossible to satisfy everyone involved. As a result, nobody is very happy, but nobody wants to change the status quo.
WSJ: Health Insurers Deny 850 Million Claims a Year. The Few Who Appeal Often Win.
Single payer advocates portray a world where all claims are approved immediately.
Maybe at first, but soon there would be a ton of denials to protect the budget. Anyone who says “no” becomes unpopular.
Another possibility is it becomes an even greater economic largesse program, where Members of Congress work to protect their hospital constituents, provider constituents, drug company constituents, rare disease constituents, raising taxes and fees to keep the gravy train afloat. Every time Medicare tries an experiment that forces competition the stakeholders cry foul and the experiment is quickly watered down.