As America has been abuzz with talk of healthcare reform, California insurance practice has been scrutinized amidst claims that 22 percent of all claims were denied by California insurance companies. The California Nurses Association (CNA) reported that the state's largest such insurers rejected 31.2 million to 45.7 million medical claims, about a fifth of all claims received over the past seven years.
According to the CNA's report, the rejection rates ranged from a high of 39.6 percent for PacifiCare to 6.5 percent for Aetna for the first half of 2009, with Cigna denying 33 percent, and Health Net 30 percent. Anthem Blue Cross, the state's largest for-profit health plan, and Kaiser, the state's largest nonprofit plan, each rejected 28 percent of claims. Blue Shield, a nonprofit with 3.4 million California members, is the only large health plan that does not report claims-denial figures in its annual report to the state Department of Managed Health Care.
"The reason they're denying them is because they don't want to pay for them," said CNA spokesman Chuck Idelson. "We need to take the profit motive out of health care, out of the decision of whether people get the medical care they need."
Insurers have responded with accusations that the CNA is twisting data to fit a political agenda. The California Association of Health Plans spokeswoman, Nicole Kasabian Evans, said, ?We question the credibility of this report.?
Evans further stated, "We believe that the attorney general's office will learn that the California Nurses Assn.'s mischaracterization of health plan claims data does not accurately reflect denials of care for consumers or widespread denials of insurance coverage. It appears that a good deal of the so-called denials are merely paperwork issues.?
Insurers answered that claims can be denied for being filed with the wrong insurer, being duplicate claims, seeking services from an out-of-network provider or seeking experimental procedures they do not cover.
The state Managed Health Care Department said that it will take a deeper look at the CNA's analysis before responding.
California Atty. Gen. Jerry Brown announced that he is looking into how HMOs review and pay insurance claims submitted by doctors, hospitals, and other medical providers. "These high denial rates suggest a system that is dysfunctional, and the public is entitled to know whether wrongful business practices are involved," Brown said.