HealthCare.gov's 2023 in-network claim denial rate hit 1 in 5

One in five in-network claims submitted to an ACA marketplace insurer was denied in 2023, according to a new KFF analysis that also shows serious variation in claims denial rates across marketplace plans.

According to the report, which draws on federal transparency data on non-group qualified health plans (QHPs) published by CMS, some marketplace plans had in-network claim denial rates as low as 1%. However, others had rates as high as 54%, KFF said.

These findings come as claim denials continue to be a source of pain for enrollees.

Per a separate 2023 consumer survey from KFF, 58% of insured adults say they've had a problem using their health insurance, including having a claim denied. Of those who said they've had trouble paying a medical bill, 39% cited denied claims as at least part of the problem.

This latest report offers a deeper look into how often claims get denied.

KFF used information released by CMS about some of the QHPs offered on HealthCare.gov, but not those offered on state-based Marketplaces or group health plans. The data is publicly available due to a condition of the annual QHP certification process dictating that insurers need to report information about claims denied for plans that were offered in the previous year and which they want to offer in the upcoming year.

According to KFF's analysis, some insurers had significantly higher in-network claim denial rates than others.

The high-volume insurers with higher in-network denial rates for HealthCare.gov states included Blue Cross Blue Shield of Alabama, with a 35% claim denial rate, UnitedHealth Group, with a 33% denial rate, Health Care Service Corporation, with a 29% denial rate, Molina Healthcare, with a 26% denial rate and Elevance Health, with a 23% denial rate.

Not every insurer had high denial rates. Most health plans had denial rates between 10 and 19%, while 22 insurers had denial rates below 10%. Overall, 29 insurers had denial rates at or above 30%.

All said, HealthCare.gov insurers paid 81%, or 319 million, of the claims they received; they denied 19%, or 73 million, of the claims they received.

KFF also accessed data about the reasons for a claim denial. The most common reason listed fell into the "other reason not listed" category, with 34% of denied claims being categorized as such. Another 18% of claims were denied for an administrative reason, 16% due to a service being included, 12% because an enrollee benefit limit had been reached, and 9% due to a lack of referral or prior authorization.

Only 5% of claims were denied due to a service not being medically necessary (excluding behavioral health) or a member not being covered.

Despite the high in-network claim denial rate, KFF found that appeals were uncommon. Enrollees appealed about 1% of denied in-network claims in 2023. When an enrollee did appeal a claim, insurers upheld their original decision a little more than half the time (56%). It was rare for an enrollee to initiate an external appeal in response.

Notably, this assessment focused on in-network claim denial rates. When including claims for out-of-network services in 2023, the claim denial rate rose to 37% across HealthCare.gov insurers, KFF concluded.

Sara Heath has covered news related to patient engagement and health equity since 2015.