Tuesday, February 26, 2019

A public option to get claims paid

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The top line in a new Kaiser Family Foundation analysis of claims data collected by CMS from insurers selling plans on HealthCare.gov is startling:
We find that, across issuers with complete data, 19% of in-network claims were denied by issuers in 2017, with denial rates for specific issuers varying significantly around this average, from less than 1% to more than 40%.
Caveats abound. Of 180 insurers selling plans on HealthCare.gov, only 130 submitted complete data enabling analysis by Kaiser.  The data does not include standardized "reason codes" and lumps together all denials, "including denials due to ineligibility, denials due to incorrect submission or billing, duplicate claims, and denials based on medical necessity." Most important, perhaps, there is no comparative data for employer-sponsored plans, which insure 15 times as many people as the marketplace (nor for off-exchange ACA-compliant plans).

There is, however, one useful point of comparison. Medicare Advantage plans deny 8% of claims, according to a September 2018 report from the Office of the Inspector General for HHS. That seems high in itself, but it's less than half the ACA marketplace rate, at least in the 39 HealthCare.gov states.

There's another striking point of comparison between Medicare Advantage and ACA marketplace claims handling. According the OIG report, while just 1% of claims denials are appealed, insurer themselves overturn 75% of appealed denials. In the ACA data, fewer than .5% of denials are appealed -- but insurers upheld 86% of their own denials.

The ACA entitles enrollees to an outside appeal after an internal appeal denial, but the number of people availing themselves of this right is vanishingly small.

The OIG Medicare Advantage report asserts, "The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided." What, then, are we to make of the low rate of overturned denials from marketplace insurers? Somehow I doubt it points to more legitimate grounds for denial.

One key point of comparison for which there's no data is fee-for-service Medicare. How often are claims denied in the public program? (here too, claims are administered by private companies, the under-the-radar Medicare Administration Contractors).

Coincidentally, just this week I came across one anecdotal scrap of evidence on this front. Talking up his bill establishing a national public option in the ACA marketplace, dubbed Medicare-X, Bennet told Sarah Kliff of Vox:
My office gets a lot of complaints from people fighting with their insurance. Seldom do we get a complaint about problems with Medicare.
Along with price control, that may be the strongest argument for letting more people opt into government-run insurance programs.

Update, 3/4/19: Here, in a doctor's case for single payer, is further anecdotal evidence that denials are far less of a problem in fee-for-service Medicare":
I spend approximately 10 percent of my clinical time filling out forms or making phone calls to insurance companies to justify tests or medications. This number would be much higher if I did not work in a clinic with an outstanding and large support staff, which not all physicians have access to. And yet, as nearly all doctors can attest, virtually none of this time is spent on patients who have Medicare—the best and most reliable payer in nearly all practices. 
OTOH, what a doctor considers an "impenetrable layer of bullshit," healthcare economists consider vital means to weed out unnecessary care. But mountains of testimony from cancer patients who spend agonizing hours fighting opaque and Kafkaesque bills and coverage denials belies the notion that a very high percentage of insurance co. oversight isn't counterproductive and torturous.

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