ACA Marketplace Plans Denied Nearly 17% of In-Network Claims in 2021

Non-group qualified health plans (QHPs) on the Affordable Care Act (ACA) marketplace denied, on average, almost 17 percent of in-network claims in 2021, according to an issue brief from the Kaiser Family Foundation (KFF).

Issuers of QHPs offered on HealthCare.gov are required by CMS to submit transparency data, including the number of in-network claims submitted and denied, the number of denials that are appealed, and the outcome of appeals. Issuers must also report the reasons for claims denials at the plan level.

The brief includes data reported by insurers for the 2021 plan year that was posted in a public use file in October 2022.

The sample included 162 QHP issuers that reported receiving at least 1,000 in-network claims and submitted data on claims received and denied. There was a total of 296.1 million claims received in 2021. Just over 48 million of these claims were denied, leading to an average in-network claims denial rate of 16.6 percent.

However, denial rates ranged from 2 percent to 49 percent. Forty-one issuers had a denial rate of less than 10 percent, 65 issuers reported a denial rate between 10 percent and 19 percent, 39 issuers denied between 20 percent and 29 percent of claims, and 17 issuers rejected 30 percent or more of claims.

Issuers that denied more than a third of their in-network claims included Meridian Health Plan of Michigan, Absolute Total Care in South Carolina, Optimum Choice in Virginia, Buckeye Community Health Plan in Ohio, Health Net of Arizona, UnitedHealthcare of Arizona, Celtic Insurance in seven states, and Ambetter Insurance in three states.

Among issuers that received more than 5 million claims in 2021, denial rates ranged from 5.7 percent (Bright Health Insurance Company of Florida) to 41.9 percent (Celtic Insurance).

In-network claim denial rates varied by plan metal levels, the brief found. For example, issuers denied an average of 15.9 percent of claims in their bronze plans, 17.3 percent in silver plans, 17.1 percent in gold plans, 11.4 percent in platinum plans, and 19.7 percent in catastrophic plans.

At the plan level, insurers reported 41.7 million denied in-network claims. Eight percent of these claim denials (3.6 million) were for services that lacked prior authorization approvals or referrals. Six million denials (13.5 percent) were for excluded services, 770,000 denials (1.7 percent) were for medical necessity reasons, and 34.2 million (76.5 percent) were for other reasons.

Although only about 2 percent of all denials were based on medical necessity, plans with large volumes of denials reported up to 37 percent of denials that were for medical necessity reasons, the brief noted. Similarly, some plans reported up to 24 percent of denials due to a lack of prior authorization or referral.

When a claim is denied, enrollees can appeal to their health plan to reverse the decision. However, enrollees only appealed 90,599 claim denials out of the 48.3 million total claims denied in 2021, or 0.2 percent. Issuers upheld 59 percent of the denials that were appealed.

The transparency data collected from QHPs are not audited to ensure issuers report data consistently. The data is also not used for oversight nor to develop tools to help consumers compare health plans.

Additionally, CMS does not collect data on out-of-network claims submitted and out-of-network enrollee cost-sharing and payments on the ACA marketplace.

“The federal government has not expanded or revised transparency data reporting requirements in years and does not appear to conduct any oversight using data that are reported by marketplace plans,” the brief stated.

“As a result, consumers are not provided any information about how reliably marketplace plan options pay claims and plans reporting high claims denial rates do not appear to face any consequences.”