QUARTERLY NEWSLETTER | SUMMER 2023 – #45
An Ounce of Front-End Prevention By Wyatt Kozinski, Esq. A little over a year ago, SAC’s founder and managing partner, Joy Stephenson-Laws, authored an insightful piece entitled “Supporting Patients in Appealing Claim Denials Is Worth the Effort.” This article, highlighting the importance of appealing claim denials and aiding patients with these types of appeals, can be found on our website, sacfirm. com, for a full read. Supporting this trend is a recent report from the Kaiser Family Foundation (KFF) analyzing the 2021 transparency data released by the Centers for Medicare and Medicaid Services (CMS) on claims denials and appeals for non-group quali-
fied health plans QHPs. KFF found that in 2021, 291.6 million in-network claims were submitted to insurers, of which 48.3 million were denied, for an average in-network claims denial rate of 16.6 percent. Of these denied claims, about 14 percent were denied because the claim was for an excluded service, 8 percent due to lack of preauthorization or referral, and only about 2 percent based on medical necessity. Most plan-reported denials (77 percent) were classified as “all other reasons.” Another study, the Change Healthcare 2022 Revenue Cycle Denials Index, reported that the denial rate for both in-network and out-of-net-
work submitted claims has steadily increased over the past five years, from 9 percent in 2016 to 12 percent in 2022. According to the index’s authors, approximately 41 percent of claims denied in Q3 2021 to Q2 2022 fall into three front-end categories: R egistration/Eligibility at 22 percent Authorization/Pre-certification at 13 percent M edical Necessity at 6 percent Other common reasons for denial, i.e., Missing or Invalid Claim Data (16 percent) and Medical Coding (five percent), can often be remedied at the front-end phase of claim submission process.