Gov’t Insurance Rules!

…rules as the greatest DENIER of insurance claims in the US in 2008.  hahahaha!  This is rich.  Too bad no one will now about this unless they listen to talk radio or visit libertarian and conservative blogs.  THANK GOD you kids have me!

Medicare’s Denial Rate Nearly Double That of Private Carriers. (healthcarehorserace.com)

Here is a little bit of news that the mainstream media is unlikely to pick up on, especially on the same day the White House welcomed “doctors from across the United States to the White House to share their unique perspective on the struggles that American families face every day when it comes to health care.” The fact that the one hundred and fifty invite-only attendees belonged to Doctors for America, formerly Doctors for Obama, is beside the point and best left unmentioned.

In any event, Beverly Gossage, a Research Fellow for the Show-Me Institute based out of Missouri and founder of HSA Benefits Consulting, did some independent research to determine which health care insurance provider had the largest denial rate. What she ultimately found was truly shocking.

Her answer came on the fifth page of the sixteen-page document called the 2008 National Health Insurer Report Card published by the American Medical Association (AMA). Found on the page was a chart (featured below) that contrasted the percentage of denied claims of Medicare with those of private insurers, such as Aetna, Anthem, CIGNA, Coventry, and Humana, among others.

Would you believe the denial rate for Medicare was nearly double that of the average percentage of denied claims for all the private insurance companies combined? Yep, out of the 6,938,431 claims Medicare received between March 1st, 2007 and March 10th, 2008, 475, 566 of them, or 6.85% of requests, were rejected. Compare this to UHC, which had the largest number of requests (1,127,691) out of the seven private health insurance companies, who had a denial rate of 2.68% within that same time frame.

What makes a little bit more unsettling is that AMA, who produced this report showing Medicare’s denial rate far above any private insurer, endorsed President Obama’s public-option monstrosity. With these facts in mind, do we really want our medical decisions, many of them likely to determine whether we live or die, in the hands of politicians and big government?

EDITED TO ADD MR. BOSS’ REPLY: Because many people don’t actually open the post to see the comments, I wanted to add Mr. Boss’ ANALysis here ’cause it’s that good.  Talk to me, Baby.

What’s even more interesting is when you dig into the “reason for denial” codes. Aetna had a similar denial rate to Medicare, but over 60% of their denials was that they already paid for the treatment. Essentially, their denials were because they actually had the audacity to review the bills to make sure they weren’t paying duplicates. Greedy bastards.

Cigna’s main reason for denials – the charge was covered under the patient’s deductible. GASP – actually charging a patient for the amount they are supposed to be charged. How dare they!?

Coventry’s main reason for denials was that expenses incurred prior to coverage. That could mean one of 2 things – you went for treatment on 1/1 and your policy was not in-force until 1/15. Of course they wouldn’t pay that. This could also be a code they use to deny pre-existing conditions, however, while perfectly justifiable under current rules, this is a political hot potato. I’ll withhold judgment on Coventry for now.

Humana & UHC – expenses incurred after coverage terminated. Like Coventry, this may be appropriate, but it may also mean they cancelled someone who got sick. I think that’s illegal, so Humana and UHC either have some ’splaining to do, or perhaps they just received bills for a period in which they were not the insurer.

Which brings us to Medicare:

Reason 1 – they need more information. Administrative burdens are overwhelming the system, and these guys are the biggest culprit. I can’t totally knock them if they truly do need more information to make a decision, but it smells of stall tactic.

Reason 2 – Medicare deemed the service unnecessry. Wh-wh-what!?!? So now either the doctor doesn’t get paid for services provided, or they burden the poor patient with the charge. Lovely.

Damn greedy insurance companies, paying all those unnecessary claims.

And while we are at it, these greedy insurance executives happen to run companies that historically pay out more in losses than they collect in premium. The only way they run an operating profit is to make up the difference in earning investment income on the float. That hasn’t exactly been a recipe for a windfall this past year.

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6 Comments

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6 responses to “Gov’t Insurance Rules!

  1. Mr. Boss

    What’s even more interesting is when you dig into the “reason for denial” codes. Aetna had a similar denial rate to Medicare, but over 60% of their denials was that they already paid for the treatment. Essentially, their denials were because they actually had the audacity to review the bills to make sure they weren’t paying duplicates. Greedy bastards.

    Cigna’s main reason for denials – the charge was covered under the patient’s deductible. GASP – actually charging a patient for the amount they are supposed to be charged. How dare they!?

    Coventry’s main reason for denials was that expenses incurred prior to coverage. That could mean one of 2 things – you went for treatment on 1/1 and your policy was not in-force until 1/15. Of course they wouldn’t pay that. This could also be a code they use to deny pre-existing conditions, however, while perfectly justifiable under current rules, this is a political hot potato. I’ll withhold judgment on Coventry for now.

    Humana & UHC – expenses incurred after coverage terminated. Like Coventry, this may be appropriate, but it may also mean they cancelled someone who got sick. I think that’s illegal, so Humana and UHC either have some ‘splaining to do, or perhaps they just received bills for a period in which they were not the insurer.

    Which brings us to Medicare:

    Reason 1 – they need more information. Administrative burdens are overwhelming the system, and these guys are the biggest culprit. I can’t totally knock them if they truly do need more information to make a decision, but it smells of stall tactic.

    Reason 2 – Medicare deemed the service unnecessry. Wh-wh-what!?!? So now either the doctor doesn’t get paid for services provided, or they burden the poor patient with the charge. Lovely.

    Damn greedy insurance companies, paying all those unnecessary claims.

    And while we are at it, these greedy insurance executives happen to run companies that historically pay out more in losses than they collect in premium. The only way they run an operating profit is to make up the difference in earning investment income on the float. That hasn’t exactly been a recipe for a windfall this past year.

  2. Gretchen

    Great post, Mrs. (and Mr.) Boss. We have coverage through Humana and are pretty pleased with it. In fact, more times than not, I see questionable coding and charges coming from the doctor’s office. Today, as a matter of fact, we received an EoB for Jack’s recent sleep clinic visit – a total waste of time, honestly, but I digress. We were (1) overcharged by the clinic for our copay, and (2) charged for an “office visit” with Dr. Xs office, when we actually saw a PA. I see this many places – you meet with a PA, or an NP, in lieu of a doctor, but you’re charged the same for an office visit. I guess that’s how they get around it, but if seeing PAs and NPs are supposed to be part of the solution to healthcare, why are we paying them as much as doctors? Shouldn’t there be a modest discount on non-MD visits? This isn’t to discredit PAs/NPs, as they are more than capable to provide valuable services to otherwise healthy people, but if I get bronchitis, I’d gladly see a PA/NP if it’d save me a couple bucks.

  3. Bridgette

    I’d be interested in seeing the differences between private run Part C claim denials and the parts run by the government. I think it would be more telling since the population served is the same. There are still differences because Part C has better coverage, so probably fewer denial possibilities, but it still seems like more of an apples to apples comparison.

  4. Mr. Boss

    That would be an interesting comparison, Bridgette. Start searching for the answer. Unfortunately, it may be the Government Accountability Office that has the results, so the spin control may be on.

  5. Bridgette

    There will be nothing to find I’m afraid. I can’t even seem to find stats on the breakdown of who gets Part C & who uses traditional. My Google-twin powers seem to be failing me.

  6. Bernie

    I don’t think you will find anything about Part C from the GAO. Part C is an opt-in program run by private insurers. The reimbursement rates are set byt the government, but Part C is essentially Medicare Managed Care. Enrollment is fairly poor, as premiums are considered “high”, but the benefits are solid. The insurance companies are then at-risk for the health of those members, so they pay more for wellness/preventative care to keep them out of the ER.

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