Even as an overwhelming majority of Americans are concerned about their access to affordable, high-quality healthcare, some corporate insurers continue to use tactics to drive up costs and delay and deny patient care. A new report adds to the growing body of evidence that exposes the great lengths some corporate insurers are going to put their own profits ahead of Americans’ medical needs.
Saddling Frontline Providers with Costly Red Tape
While the costs of delivering care continue to rise, hospitals are also facing mounting burdens from corporate insurers. Excessive prior authorization, fail-first policies, and other bureaucratic hurdles can prevent patients from receiving care—while driving up healthcare costs.
- Administrative costs now account for more than 40% of hospitals’ total expenses to deliver care to patients.
- In March 2024 alone, U.S. hospitals spent $19.7 billion fighting insurer denials. More than half of the denied claims were overturned, underscoring the arbitrary nature of these inappropriate mass denials — but at considerable time and expense to providers.
- Half of all hospitals have more than $100 million in accounts receivables for claims older than six months, and over a third of hospitals reported $50 million or more in foregone payments because of denied claims.
- As one healthcare system explains: “The growing number of prior authorization requirements, claim audits, denials, level of care downgrades and payer policies is staggering. These expansive tactics are affecting our health system’s ability to reinvest in its infrastructure, service lines, and physician retention and recruitment.”
Insurers’ “Profits-First” Policies Put Patients at Risk
Corporate insurers’ slew of excessive and costly bureaucratic requirements is not about protecting patients; it’s about maximizing their own revenues.
- More than nine in 10 doctors (94%) say prior authorization causes delays to patient treatments. Nearly a quarter (24%) say authorization delays have led to adverse outcomes for patients.
- Three-quarters of doctors say that delays in securing approval have caused patients to give up on recommended treatment plans.
- “[Insurers] erect roadblocks allegedly designed to save money for the health system and protect their resources, but when patients and their doctors face care delays—or when they give up and abandon necessary care—the result can increase overall costs when worsening health conditions force patients to seek urgent or emergency treatment,” says Dr. Bruce Scott, president of the American Medical Association (AMA).
- “Recently I saw a patient with a tumor growing in the sinus next to her eye. She understood she needed surgery to remove the tumor, but her insurance company denied authorization for the surgery because she had not tried an antibiotic and a nasal spray—neither of which was going to cure the tumor. After a phone call to the medical director, the surgery was approved, but imagine the stress for her, when she received a letter from her insurer saying that the surgery was ‘not medically necessary.’ That’s just wrong, and our patients deserve better.”
A Presumption of Denial:
Some corporate insurers are employing every tool at their disposal, including artificial intelligence and entire departments of personnel, to excessively delay and deny medical care for patients—often, even when it is necessary.
- Last year, care denials from commercial insurers increased more than 20% over the prior year. The rejection rate for Medicare Advantage plans grew even more: Medicare Advantage denials rose 55.7% year-over-year.
- During the same period, the time that commercial insurers took to process and pay hospital claims increased 19.7%. Additionally, insurers use post-payment claims audits to cut reimbursements to hospitals and recoup payments after-the-fact. “These unfair business practices create cash flow challenges for hospitals that threaten the viability of many community providers.”
- Insurers denied 3.4 million prior authorization approvals for Medicare Advantage plans in 2022, according to KFF. A “vast majority” (83.2%) were overturned upon appeal. But less that one in 10 denials were contested.
- The world’s largest corporate insurers are employing cutting-edge technology to blanket deny medical claims as rapidly as possible. These tactics are coming under scrutiny — and inviting legal action — for making “rigid and unrealistic” determinations about patients’ health needs. In 2022, Cigna denied over 300,000 claims within two months, spending an average of 1.2 seconds on each case.
Deflect and Divert Blame
As the curtain is pulled back on corporate insurers’ tactics, these giants are working hard to duck accountability and deflect blame. With the support of special interest groups, some insurance giants are attempting to push Congress to drastically slash hospital reimbursements for care. Their proposed multi-billion-dollar Medicare cuts could reduce or eliminate Americans’ access to 24/7 hospital care.
- Politico Pro: “Insurers, unable to push through a top legislative priority in the latest spending bill, are already working on plan B—a lobbying blitz targeting lawmakers at home and in Washington.”
- Eight in 10 voters are concerned about their access to affordable healthcare. Their top priority is addressing insurance costs, including out-of-pocket expenses and premium costs.
Enough is enough. Congress should put aside misguided cuts to patient care and focus instead on solutions that will make high-quality care more affordable and more accessible for all Americans.