In case you missed it, a new a report, “Private Payers Retain Profits by Refusing or Delaying Legitimate Medical Claims”, reveals that hospitals and health systems “spend $19.7 billion a year just to adjudicate with” corporate insurance companies who deny patient care.
- Becker’s reports that “[a]bout 15 percent of all claims submitted to private payers for reimbursement are initially denied, including many that were pre-approved to move forward through the prior authorization process,” according to the report by Premier.
- More than half (54.3 percent) of these denials of patient care by corporate insurers are ultimately overturned, the report finds, “but only after multiple, costly rounds of provider appeals.” This alone accounts for roughly $10 billion in costs just to contest corporate insurers’ denials of patient care.
- The report finds that “[t]he net result of these denials is longer than expected hospital stays, which adds expense and risk,” as well as threats to “care availability, as patients requiring a hospital admission may not have access to a bed until other patients are approved for discharge to the SNF setting of care.”
- At a time when many hospitals are already facing financial headwinds, the report warns that “unnecessary insurer denials add costs to the system and compromise hospital financials.”
- “This continued burden has a tremendous impact on hospitals’ financial viability. Over the past year, the average days of cash on hand for hospitals and health systems declined by 44 days over the previous year, on average – a 17 percent drop year over year. Lacking cash on hand, health systems are unable to re-invest in patient care and may also suffer from downgrades in bond ratings, making cash more expensive and harder to obtain. In contrast, days of cash on hand increased for insurers like United Health Group (up 25.5 percent on average from 2019) and Cigna (up 24.4 percent on average from 2019).”
As evidence mounts that some corporate insurers routinely delay and deny care through excessive and inappropriate use of prior authorization, including through the Medicare Advantage program, a recent report by the Medicare Payment Advisory Commission (MedPAC) uncovered that Medicare Advantage is projected to cost taxpayers $88 billion more in 2024 than the government would have spent through traditional Medicare.
Policymakers must take action to protect patients from corporate insurance companies who prioritize profits by delaying and denying necessary patient care. By working together, we can strengthen patients’ access to vital 24/7 care across the country.