Sunday, March 17, 2019

Would a public option mean fewer claims denials?

Here I'm going to pose a question for which I don't yet have good answers.

One strong appeal of the public option in various Medicare expansion bills -- e.g.,  Medicare X, Choose Medicare, Medicare at 50, Medicare for America -- is access to an all-but-unlimited provider network (effectively eliminating balance billing as well as limited choice of provider). My question To what extent does a national public option also promise to strongly reduce the agony inflicted on patients by coverage denials? And secondarily, to what extent would minimizing denials weaken legitimate cost control?

Pieces of the puzzle are provided by studies of denial rates in various markets and public programs. These studies are based on partial or not-so-partial data sets and may be measuring different things. One question that's often unclear to me when reading them is how many or what kinds of denials directly affect patients, and which are eaten by providers or represent (or trigger) a de facto negotiation between provider and payer. Not to mention how many are justified...

With that caveat, a few data points:

1. According to a recent Kaiser Family Foundation analysis of claims data provided to CMS by insurers selling plans on, insurers in that market denied 19% of claims.  39 states use the platform, accounting for about three quarters of on-exchange enrollments nationally. The data analyzed represents a bit shy of three quarters of insurers on the platform. The data did not specify reasons for denial, which can include" denials due to ineligibility, denials due to incorrect submission or billing, duplicate claims, and denials based on medical necessity."

2. According to a September 2018 report from the Office of the Inspector General for HHS, Medicare Advantage plans deny 8% of claims. Only 1% of denials are challenged, but 75% of those challenged are overturned in the first round of appeal (administered by the insurer). In dramatic contrast, insurers overturned only 14% of denials.

3. According to a study published last April in Health Affairs, based on a new data set* and focused only on physician outpatient visits, fee-for-service (FFS) Medicaid has by far the highest share of bills denied, and both commercial and Medicare Advantage insurers denied claims at rates only slightly higher than FFS Medicare.  Denial rates were found to be 22% for FFS Medicaid, 10% for managed Medicaid, 4% for both Medicare Advantage and private non-Medicare insurers, and 3% for Medicare. Commercial insurers actually challenged (as opposed to paid) a lower percentage of bills than FFS Medicare.

4. A 2016 GAO report on the appeals process for claims denied in FFS Medicare reported that 10.5% of claims were denied. Almost three quarters of some 4.2 million appeals filed in 2014 (out of 128 million denials) were in Part B, physician services. Most denials are prepayment**, and most, the text below seems to me to imply, are not denied for medical reasons:
To conduct a prepayment claim review, CMS contractors conduct several checks to determine whether a claim received from a provider should be paid. These checks include verifying that the provider is enrolled in Medicare, the beneficiary is eligible to receive Medicare benefits, and the service is covered by Medicare. In limited cases, before paying a claim, contractors review the supporting medical documentation or a claim to ensure the service was medically necessary. As a result of these checks or reviews, CMS’s contractors may deny Medicare payment for the claim.
These various studies don't obviously jibe, but they don't obviously contradict one another either. Most of the horror stories reported in the media about patients struggling with denied claims are in the realm of commercial insurance. I plan to talk to doctors about their experiences with the various payer types in coming weeks.  Readers, if you have insight into how denials compare among payer types -- for patients or providers, I'd appreciate hearing about it. There's an email link if you click through the profile on the right.

* The HA study, by Joshua D. Gottleib, Adam Hale Shapiro, and Abe Dunne, used the IQVIA Real-World Data Adjudicate Claims data set, covering 2013-2015. It includes claims in 5 broad specialty categories from about 27% of the nation's physicians, with about 40% in Medicare and private insurance each, 15% in Medicare Advantage, and smaller samplings from FFS and managed Medicaid.

** Most payment denials, i.e. most at the prepayment level, are issued by the Medicare Administrative Contractors (MACs) that administer fee-for-service Medicare.

1 comment:

  1. With Medicare, the patient is generally not liable if a claim is denied.
    So that even though Medicare denies a lot of claims by volume, patients are not harmed much.