Appealing an insurance claim decision has become so byzantine, complicated, and frustrating that fewer than two-tenths of 1% of Affordable Care Act patients even bothered to appeal denied claims in 2021.
That’s according to an in-depth investigation by ProPublica, a nonprofit news operation that probes abuses of power. ProPublica reporter Cheryl Clark says she spoke with more than 50 insurance experts, patients, lawyers, physicians, and consumer advocates building a tool to help people navigate insurance appeals and was almost unanimously told it would be impossible.
“The central problem: There are many kinds of insurance in the U.S., and they have different processes for appealing a denial,” the report said. “And no lawmakers or regulators in state and federal governments have forced all insurers to follow one simple standard.”
Understanding of coverage cited
Clark found a big problem lies in that many people don’t fully understand the insurance they have, whether they are covered by an employee or a private insurance company, and whether or not it is a “fully insured plan.”
The route one takes to file an appeal depends on the type of plan. But it gets more complicated with government insurance – Medicare, Medicaid, Part D, Advantage, etc. – because each segment might have a different method of appeal.
“The federal government sets minimum standards that each state Medicaid program has to follow, but states can make things more complicated by requiring different appeal pathways for different types of health care,” the ProPublica report said. “So the process can be different depending on the type of care that was denied, and that can vary state to state.”
Ways to simplify appeals process sought
A spokesperson for the Centers for Medicare & Medicaid Services, the federal agency that oversees Medicare, wrote to Clark in an email that the agency “has been actively engaged in identifying ways to simplify and streamline the appeals process and has worked with stakeholders and focus groups to identify ways to better communicate information related to the appeals process with the beneficiaries we serve.”
Clark said she created an Excel spreadsheet on what she had learned about the appeals process for Medi-Cal, California’s Medicaid program, that was edited and proofed by a representative of the state’s Health Consumer Alliance. The returned document was seven pages long, with five layers or routes, some of which ended in Superior Court.
“There were so many abbreviations and acronyms that I needed to create a glossary,” Clark wrote. “Who knew that DMC-ODS stands for Drug Medi-Cal Organized Delivery System? And this was for just one state!”
Dr. Barbara McAneny, former president of the American Medical Association who runs an oncology practice in New Mexico, told ProPublica she spends $350,000 a year on a designated team of denial fighters whose sole job is to request prior authorization for cancer care – an average 67 requests per day – and then appeal the denials.
“We know everything is going to get denied,” McAney said.
McAney said she believes insurance companies save money by delaying spending as long as possible, and benefit when patients give up on appeals or their condition becomes worse with the lack of treatment.
For insurance companies, she said “death is cheaper than chemotherapy.”
Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].