The More You Need Preventive Care Coverage, the More Likely Your Claim Will Be Denied, Study Finds

This September, the Journal of the American Medical Association (JAMA) published its findings based on a large cohort study of more than a million and a half patients seeking preventive care. The results, published in JAMA Network Open on September 18, reveal that at-risk patients experience claim denials at higher rates than other groups. At-risk populations were defined in the study to include patients with low incomes, those without a high school degree or education beyond high school, and racial and ethnic minority groups. Ironically, preventive care is often free to more affluent groups with better health plans, while at-risk populations experience barriers in the form of cost-sharing requirements, administrative obstacles, and the denial of claims.

About the Study

The JAMA investigation reported in JAMA Network Open is titled, Social Determinants of Health and Insurance Claim Denials for Preventive Care. This broad cohort study looked at 1,535,181 patients seeking preventive care who were covered either through employer-based insurance or the Affordable Care Act (ACA) Marketplace. Cost-sharing (co-pays, deductibles) was largely eliminated for preventive care services under the Patient Protection and Affordable Care Act, also known as the ACA (or Obamacare back in the day), but barriers still exist. The objective of this study was to determine whether and to what extent social demographics of patients were associated with insurance claim denials for preventive care.

Findings

As noted, the study found a higher incidence of claim denials for patients in at-risk groups, defined as low-income, low levels of education attainment, and racial and ethnic minorities. Denials were most often based on billing errors and “noncovered service–diagnosis code pairs.” A noncovered service-diagnosis code pair is a combination of a procedure code and a diagnosis code used to establish a clinical picture and determine how the payer, whether a governmental payer like Medicare or Medicaid or a private insurer, will reimburse the provider for procedures and services.

JAMA found this higher level of claim denials for preventive services occurring in five categories:

• Specific denials of benefits
• Errors in billing
• Lapses in coverage
• Inadequate coverage
• Other

The 1,535,181 patients studied received 4,218,512 preventive services over 2,507,943 unique visits. Almost 72% of the visits were for female patients. The average age of all patients was slightly above 54 years old, with about 76% of patients earning an annual household income under $100,000, and around 67% possessing no college education.

A total of 20,571 (1.34%) of preventive claims studied were denied, with the majority of denials coming in the form of specific benefit denials and billing errors. When looking at demographic factors, some of the most striking differences were income and education; the lowest-income patients studied were 43% more likely to experience an insurance claim denial compared to the patients with the highest incomes. When looking at education disparities, enrollees with the least amount of education were denied at a rate of 1.79% compared to 1.14% of college-educated policyholders.

The role of race and ethnicity in claim denials was dramatic as well. While non-Hispanic white patients encountered denials of their insurance claims about 1.13% of the time, minority populations suffered denials at much higher rates:

• Asian 2.72%
• Hispanic 2.44
• Non-Hispanic Black 2.04%

Conclusion

This study will likely help inform ongoing policy discussions surrounding the question of equitable access to primary health care, including preventive care, which was one of the goals of the ACA when it was passed by Congress and signed into law in 2010. Meanwhile, patients whose insurance claims and requests for coverage get denied should consider contacting an insurance law attorney to look into whether the denial was based on a correctable error or if it involved a bad faith insurance practice to unreasonably delay or deny coverage. Victims of insurance bad faith can often recover additional compensation for the harm they suffered from the denial, including assessing a large punitive damages award against the insurer for its bad faith conduct.