Health insurer claim denial rates have been a significant concern in recent years. In 2024, Experian Health reported that 38% of healthcare providers experienced claim denials for at least one in ten claims, with some organizations seeing denial rates of more than 15%. The denial rates for insurers of qualified health plans (QHPs) sold on HealthCare.govwere also notable, with 19% of in-network claims and 37% of out-of-network claims being denied, resulting in an average denial rate of 20% for all claims.

The variation in denial rates among insurers is substantial. For instance, UnitedHealthcare denied nearly one-third of claims, making it the company with the highest denial rate among those offering plans on Affordable Care Act exchanges. Common reasons for claim denials include missing or inaccurate data, lack of prior authorization, and excluded services.

Despite the high denial rates, consumers rarely appeal denied claims. In fact, fewer than 1% of denied claims were appealed, and insurers upheld 56% of those appeals. These statistics highlight the ongoing challenges faced by healthcare providers and patients in dealing with claim denials.

The government has taken several steps to address the issue of health insurer claim denial rates. Here are some key actions:

– – Transparency Requirements: The Affordable Care Act (ACA) mandates that insurers report transparency data for all non-grandfathered health plans sold on and off the Marketplace, including fully-insured and self-insured employer group health plans. This data is available to federal and state insurance regulators and the public.
– – Data Analysis and Reporting: The Centers for Medicare and Medicaid Services (CMS) analyze and release data on claims denials and appeals for non-group qualified health plans (QHPs) offered on HealthCare.gov.This data helps identify patterns and areas for improvement.
– – Policy Recommendations: The ERISA Advisory Council (EAC), a body appointed by the Secretary of Labor, has made 12 policy recommendations to improve the claims denial and appeals process. These recommendations aim to address dubious denial processes and make the appeals process less difficult for consumers.
– – Consumer Protection: The government continues to monitor and enforce regulations to protect consumers from unfair claim denials. This includes ensuring that insurers comply with transparency requirements and addressing any violations.

And now in California Assembly Bill 682, proposed new legislation authored and introduced by Assemblymember Liz Ortega of Hayward, would mandate public reporting on the denials of insurance claims for California’s patients.

The new bill seeks to mandate collection and public reporting of health insurance claims denial information for each health plan regulated by the California Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI).

The information collected and reported would include the number of claims denied, the costs of denied claims, whether or not artificial intelligence was used in the decision, and — significantly — reasoning for denying claims, such as a lack of prior authorization or an out-of-network provider.

California Nurses Association (CNA) and its more than 100,000 members across California today shared their support for Assembly Bill 682 in its press release.