DOI Analysis: 43% of Medical Coverage Denial Appeals Are Successful

Patients who appeal the denial of health coverage for certain medical services are successful about 43% of the time, according to an analysis of independent medical reviews by the California Department of Insurance, Capitol Public Radio's "KXJZ News" reports ("KXJZ News" [1], Capital Public Radio, 4/1).

Background

The Affordable Care Act allows policyholders to appeal a denial of health care services directly to the health plan and to a third party. Before the ACA, there was no consistent national process for appealing a denial of coverage for medical services (Bartolone, "KXJZ News" [2], Capitol Public Radio, 4/1).

In 2001, California launched its Independent Medical Review program, an appeals process that allows California residents to challenge denials or delays of coverage by private health care insurers (Gorn, "Capitol Desk," California Healthline, 2/3/12).

IMR can overturn an insurer's decision, in which case the insurer is required to immediately approve the patient's health care service request. IMR also can approve an insurer's denial of services.

Details of Findings

From 2001 to 2013, the DOI analysis found that after the state appeals process:

• 2% of insurers' decisions were withdrawn;
• 43% of insurers' decisions were overturned; and
• 55% of insurers' decisions were upheld ("KXJZ News" [1], Capital Public Radio, 4/1).

Specifically, the analysis found that service denials were overturned in:

• About 51% of Health Net cases;
• About 52% of Blue Shield of California cases;
• About 53% of Anthem Blue Cross cases; and
• About 57% of Kaiser Permanent cases.

Reaction

Robert Zirkelbach, with America's Health Insurance Plans, said about 3% of health care claims are denied by insurers.

Peter Kongstvedt -- a senior health policy faculty member at George Mason University and a former health plan manager -- said such denials are most often due to:

• Administrative errors; or
• Mechanical issues.

As a result, he said patients often are just as successful challenging denials directly to insurers as they are when they appeal to a third party.

However, Kongstvedt noted that some services are denied because insurers or physicians do not perceive the service to be medically necessary for the patient ("KXJZ News" [2], Capital Public Radio, 4/1).