HJAR Nov/Dec 2023

claims were denied in 2021. CMS requires insurers to report the reasons for claims denials at the plan level. Of in-network claims, about 14% were denied because the claim was for an excluded service, 8% due to lack of preauthorization or referral, and only about 2% based on medical necessity. Most of the plan-reported denials (77%) were classified as “all other reasons.” The report also identified that USAble Mutual Insurance Company of Arkansas (Arkan- sas Blue Cross and Blue Shield) had a claim denial rate of 18.2% on in-network Afford- able Care Act Marketplace plans. This increase in claim denials may be attributed to the use of automation. A Pro- Publica investigation published in March found that one insurer’s automation allowed a medical reviewer to sign off on 50 charts in 10 seconds. In response to the ProPublica article, state and federal regulators, as well as congressional committees, have begun investigating insurance companies’ use of artificial intelligence to approve or deny claims. Table 1 reflects the inpatient prior autho- rization denial rate for different types of products. According to this survey from the American Hospital Association, Medicare Advantage plans have the highest denial rate at 19.1%. Couple that with the rate of overturning these denials (see Table 2) at 69% for MedicareAdvantage plans, you can easily see why the hospital must employ additional personnel and take time to pur- sue appeals. Jumping through these hoops requires significant time and money, and it delays justifiable patient care. As more and more of our state’s Medi- care population choose Medicare Advan- tage plans, hospitals are reimbursed below the rate of Medicare, which is already shown to be lower than the cost of care inArkansas. A recent survey by Morning Consult on behalf of theAmerican Hospital Association found that the great majority of patients, nurses, and physicians say that commercial insurer policies and practices are reducing access to medical care, driving up health- care costs, and increasing clinical burden Product Type Initial Denial Rates Medicaid Managed Care 15.5% FFS Medicaid 7.6% Medicare Advantage 19.1% Commercial 11.4% TABLE 1: INITIAL DENIAL RATES FOR INPATIENT PRIOR AUTHORIZATIONS Product Type Overturn Rate Medicaid Managed Care 61% FFS Medicaid 69% Medicare Advantage 69% Commercial 68% TABLE 2: OVERTURN RATE FOR INPATIENT PRIOR AUTHORIZATION DENIAL APPEALS Source: American Hospital Association. “Addressing Commercial Health Plan Challenges to Ensure Fair Coverage for Patients and Providers.” Accessed September 2023. https://www. aha.org/guidesreports/2022-11-01-addressing-commercial-health-plan-challenges-ensure- fair-coverage-patients-and-providers and burnout. The survey also indicated that 83% of patients say their healthcare provid- ers, not insurers, know the best treatment for them and should be the ones to make these all-important decisions. During a time of significant financial strain on hospitals, 50% say they have not been paid for claims totaling $100million or more for more than six months. Seven in 10 hospitals said they are still dealing with out- standing claims from 2016 or before. By raising premiums then denying claims and restricting care through prior authori- zations and claim denials, insurers are max- imizing their profits. Where is all the money going? Just a brief internet search of health insurance companies yields a multitude of articles with headlines boasting all-time high profits for the industry. Below is an accounting of profits for the top six for 2022. 1 1. UnitedHealth Group_ ____$20.6 billion 2. Cigna_ _______________________ $6.7 billion 3. Elevance Health_ ____________$6 billion 4. CVS Health_________________ $4.2 billion 5. Humana____________________ $2.8 billion 6. Centene_ ____________________$1.2 billion Though these mammoth corporations do have more business lines than just health insurance plans, they are undoubtedly the HEALTHCARE JOURNAL OF ARKANSAS I  NOV / DEC 2023 11 1 Source: Emerson, J. “Big Payers Ranked by 2022 Profit.” Becker’s Payer Issues, Feb. 9, 2023. https://www.beckerspayer.com/payer/big-payers-ranked-by-2022-profit.html