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Is it just us, or are claim denials on the rise?

New data shows that insurer denials are growing exponentially.

Over the past year, hospitals across the nation have experienced a rise in denied medical claims from insurance companies.

According to a recent article in Modern Healthcare, approximately 67% of healthcare leaders have seen an increase in claim denials. (For comparison, in 2021, only 33% of hospital executives reported an increase. That’s double!) One shocking example: UnityPoint Health, based in West Des Moines, Iowa, has seen between a 50% to 200% increase in request-for-information denials.

This isn’t just frustrating for patients — it’s a hassle on health systems. When insurers deny claims, it puts a greater administrative burden on hospitals when staff is already scarce, and further limits cash flow during a time when health systems are already skating on razor-thin margins.

Why is this happening?

Remember, during the pandemic, fewer patients sought elective care, which meant insurers had to process fewer claims. While these same patients still paid their monthly premiums, their insurers had less care to pay for, leading to unprecedented profits.

But now, with social distancing mandates over and COVID-19 no longer the public health emergency it once was, more patients are going back to the doctor — which means insurers are now having to pay for more care than before.

“[Insurers] are tightening the screws everywhere to try and keep costs down,” says Dr. Brian Stein, the Chief Quality Officer at Rush University Medical Center in Chicago. “We’re at their mercy with what they decide.”

Insurers use tactics like outright denying claims or delaying payment on claims, with some companies delaying claim decisions up to a week. Not only do these patients have to play the waiting game on medical services until they know if they’ll be covered, but many doctors just aren’t getting paid on time.

This is problematic for a variety of reasons – hospitals and healthcare facilities need prompt payment for their services to pay staff, order supplies and manage all the other expenses associated with providing care to patients.

The longer a claim goes unpaid, the more it affects hospital operations. Health systems are surviving by moving around funds and dipping into reserves, neither of which are sustainable strategies for the long term.

The reality is that claim denials grind the healthcare system to a halt. And until the government puts more mandates in place to track and regulate unfair and illegal denials, insurers will continue to snarl the process of providing and accessing care.

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