New York Data Suggests Coverage Denials Put Most Vulnerable Patients At Risk

Introduction

Today we are announcing the release of a new report from People's Action Institute on the harms of prior authorization and claims denials. The publication was prepared in collaboration with Persius. The unprecedented analysis details the extent of historical health insurance coverage denials and appeals among state regulated plans in New York, using data which is rarely discussed in popular media. The findings suggest staggering inequities, which are troubling and demand action.

Synopsis

We encourage interested readers to read through the entire report. For introductory context, we repeat here its abstract.

"Health insurance coverage denials are a critical barrier to health care access in the United States, with far-reaching consequences for patients, providers, and the health care system as a whole. Wrongful denials cause forgone and delayed care for patients, burden patients with debilitating medical debt, and place undue financial burdens on providers.

In this report we analyze data from New York’s state-regulated health insurance markets to quantify the scope and financial impact of these denials. We are particularly interested in understanding the extent to which financial incentives cause harm to patients, and in measuring the occurrence of wrongful coverage denials.

Our findings reveal that post-service claim denials in New York amounted to tens of billions of dollars in billed charges annually. Moreover, they suggest that high cost claims may be inappropriately denied at disproportionately high rates, with overturned denials taking higher average values than the broader pool of appealed claims across all market segments. The data shows that denials overturned through internal appeal processes amounted to over $3 billion in billed charges in New York in 2023 – a figure that excludes the administrative costs borne by patients, providers, and insurers alike, and fails to capture inappropriate denials that go unappealed or remain upheld on appeal despite appeal merit. The data suggests financial incentives may influence inappropriate denial patterns, contributing to delayed or foregone care, exacerbating medical debt, and straining provider operations.

This analysis provides limited but crucial evidence for policymakers, regulators, and health care advocates working to address systemic issues in health insurance administration and ensure equitable access to covered medical services. Our findings suggest the need for numerous policy changes to improve understanding, accountability, and patient protection."

This work builds on years of prior Persius research (including this and this). Research directions were motivated by our experiences providing free appeal support to those facing wrongful coverage denials.

Contact

Please direct correspondence with questions or other feedback to People's Action Institute, or reach out to us at info@persius.org and we can put you in touch.