07 October 2023- Under Governor Josh Shapiro’s leadership and commitment to consumer protection, the Pennsylvania Insurance Department (PID) today released Pennsylvania’s first Transparency in Coverage Report for 2023, which includes data on claims, claim denials and appeals information for health insurance companies doing business in the Commonwealth.
“Pennsylvanians deserve clarity about how their health insurance companies operate, and PID is committed to helping consumers understand the benefits and rights provided under their health insurance policies,” said Pennsylvania Insurance Commissioner Michael Humphreys. “This report provides unprecedented insight into companies’ claim denials and appeals processes that consumers can consider as they prepare for upcoming health care services, and underscores the importance of Pennsylvanians knowing that the appeals process is available to them. If a consumer has questions about their health plan or a denied claim, they should contact PID if they’re not sure where to start. Our consumer services team is here to help and direct them to the right place for help.
This data reporting is required under the federal Affordable Care Act (ACA) for health insurance companies seeking Qualified Health Plan (QHP) certification. A QHP is an insurance plan certified by Pennie®, Pennsylvania’s health insurance marketplace, that provides essential health benefits, adheres to established limits on cost-sharing (such as deductibles, copayments, and out-of-pocket maximums), and meets other requirements under the ACA. QHPs are required to report certain claims and financial information to Pennie® and the Insurance Commissioner and to make this information available to the public. The Transparency in Coverage Report therefore helps insurers meet this requirement to make information available to the public. This Transparency in Coverage Report provides claims and appeals data from 2020 to 2022.
The report found:
- The total number of claims received and the total number of claims denied have increased over the past two years, but the statewide denial rate has remained stable at between 12.6 and 14.5 percent of all claims received.
- In 2020, individual market QHPs in Pennsylvania will receive about 10.25 million claims and deny 1.29 million claims.
- In 2022, Pennsylvania individual market QHPs will receive about 14.9 million claims and deny 2.02 million claims.
- Based on the latest information reported by insurers for 2022, individual market QHPs in Pennsylvania had an aggregate claim denial rate of 13.6 percent.
PID also reminds consumers of the appeals process for denied claims, as consumers who are denied a claim are often unaware of their right to appeal, and appealing a denied claim can be a valuable resource to ensure that Pennsylvanians receive all the benefits they are entitled to. Any member of a QHP has the option of filing an appeal if a plan denies a service based on circumstances including, but not limited to, lack of medical necessity or because the service is considered investigational, experimental or cosmetic.
Denied claims can be appealed through an internal appeals process, where the plan that denied the claim reviews its decision internally, and a member can appeal through an external independent review process, where the case is sent to an external review organisation to independently review the claim and determine whether it should be paid under the terms of the plan.
Members can use both appeal processes and are not restricted to one. Through the appeals process, it is possible that the insurer’s initial decision to deny the claim may be overturned, meaning that the claim has been reconsidered, the services have been deemed medically necessary or appropriate for the member, and the claim should therefore be paid.
However, not all consumers choose to appeal, although a significant number of internal and external appeals result in overturned decisions for those who do appeal. In 2022 alone, for individual market QHPs in Pennsylvania, 2,165 internal appeals were filed and 1,149 were overturned – a 53 percent reversal rate. But from 2020 to 2022, for individual market insurers in Pennsylvania, less than 1 percent of denied claims were appealed by members each year.
