As many as 53 million insured Americans are denied payment for medical bills by their health insurance company. Recent medical data shows that 24 percent of insured individuals are denied payment for prescribed medical treatments.
Denied Payment for Medical Treatments
Over the last few years, many Americans have gained health insurance with the help of healthcare reforms through Obama Care (Affordable Care Act), however, many of those insured individuals with persistent conditions and chronic illnesses are facing medical billing denials for treatments. According to data from the Government Accounting Office (GAO), 24 percent, nearly one in four people, are denied coverage for prescribed medical treatments. Data shows that up to 40 percent of insurance providers deny payment for healthcare claims. In 70 percent of denial cases, the denied treatment is for a condition or illness described as serious, and in 43 percent of denial cases, individuals are described as being in poor health.
According to GAO data, most insured individuals reported that they waited for one month or more to get information on submitted healthcare claims, and 29 percent reported that their condition worsened while they waited for a decision. When claims were eventually approved, they were delayed for several additional months due to paperwork and required medical evidence. More than 34 percent of individuals reported that their insurance provider refused coverage for treatment, so they had to delay or forgo needed treatment entirely.
Medical Billing Errors
Medical claim denials fall into hard and soft categories. With hard denials, no corrections are allowed, so medical providers and hospitals have to write off the loss. Soft denials can be corrected and paid if the provider corrects the claim or sends additional information. According to the American Medical Association, there are five main reasons for medical billing denials:
- Missing information on claim forms
- Duplicate claims or services
- Adjudicated services included in other payments
- Treatments or services not covered by the insurance policy
- Expired time limit to file the medical claim
Many hospitals and medical practices lack the staff and technology to manage billing denials effectively, especially with constantly changing insurance regulations. Within the last quarter of 2015, hospital inpatient medical coding errors accounted for 81 percent of claim denials. For patients suffering from persistent conditions and chronic illnesses, purchasing health insurance means playing a game of chance, where one-in-four people will face denied payments for prescribed medical treatment of serious conditions.