Denial of claims: Medicare does it most

October 12th, 2009 | by Brian Schwartz |

Critics of non-government insurance complain that such companies deny claims, and imply that this would never happen with government-run insurance such as Medicare.  In a previous post I pointed out that in Massachusetts, Medicaid denies a higher percentage of claims than non-government insurers.

According to the American Medical Association’s 2008 Health Insurance Report Card , the health insurer that denies the most claims is Medicare.  This is compared to Aetna, Anthem, Cigna, Coventry, Health Net, Humana, and United Health care.  21% of Medicare’s claim denials had the following “reason code description”: “These are non-covered services because this is not deemed a ‘medical necessity’ by the payer.” It was the 2nd most common reason.

For details, see this post at HSA Benefits Consulting.

Not only does Medicare deny claims, it is notorious for accepting fraudulent claims and paying for wasteful procedures.  Medicare is both stingy and wasteful.

(via FIRM and StateHouseCall)

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  • "ForThePublicOption" writes: "Again, it is the INSURANCE COMPANIES who are denying claims, not the federal government!"

    Say you're right. So what? Are you trying to say government does a bad job of choosing an insurance company on behalf of Medicare recipients? Are you saying that Medicare recipients would be better off with a voucher with which they could buy a policy from the insurer or their choice? If you don't trust government to take your money & pick an insurance company for you or someone else, why would you trust government to *be* that insurance company?
  • ForThePublicOption
    A little-known fact about Medicare, the Federal health insurance program for millions of elderly and disabled people: Claims are reviewed and paid by private insurance companies serving as agents of the Federal Government, and their standards vary from place to place...Most people think of Medicare as a Federal program with uniform benefits nationwide. But we are learning that Medicare is really a crazy quilt of separate and dramatically different programs run by 34 private insurance carriers.

    And what's interesting is how denial rates vary from state to state and even within states. For example:

    An older woman whose doctor prescribed a diagnostic mammogram to detect breast cancer was 180 times more likely to have a claim denied in Southern California than in Northern California or in North Carolina, the auditors said.
    Likewise, for angioplasty, a technique for opening clogged blood vessels, Medicare denied 1,824 claims as unnecessary for every 10,000 approved in Southern California. Denial rates in North Carolina and Wisconsin were about 300 per 10,000. But in South Carolina and Illinois, Medicare did not reject any claims for this service in 1992.

    Again, it is the INSURANCE COMPANIES who are denying claims, not the federal government!
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