Dive Brief:
- Providers’ struggles with claims denials have worsened compared with two years ago, according to Experian Health’s 2024 State of Claims survey released on Tuesday.
- Prior authorizations and missing or inaccurate data were the leading reasons for claims denials in 2024, according to the global data and technology firm. Respondents said frequent changes to payer policies also created reimbursement challenges.
- As denials tick up, 77% of providers report they are moderately to extremely concerned payers won’t ultimately foot the bill for healthcare as promised.
Dive Insight:
Providers have recently sounded the alarm over growing strife in their relations with payers.
The Experian Health report, which surveyed 210 healthcare staff between June and July of this year, confirms an escalation of tensions.
Nearly three in four respondents said claims denials have increased. Two years ago, less than half of respondents said claims denials were on the rise. Nearly 40% of those respondents say their claims are denied at least 10% of the time, while 11% of respondents said their claims were denied at least 15% of the time.
And, even when reimbursements come through, the wait to be reimbursed is increasing, according to 67% of respondents.
Reasons for claims denials vary, and can include incomplete or incorrect data collection, coding errors, staffing shortages or poor training of staff, late submissions and payer policies.
“We had hoped to see a decrease in claim denials from our previous survey, but it’s clear these significant challenges are continuing, adding immense pressure on providers to improve their revenue cycle management processes,” said Clarissa Riggins, chief product officer at Experian, in a release accompanying the report. “This growing crisis is a sign that traditional approaches are no longer enough, and providers should adopt more proactive strategies and the latest technology to navigate this volatility.”
Reducing denials is now a priority for 84% organizations surveyed, and 73% have evaluated their claims process within the past year, according to the survey.
However, healthcare providers have not been jumping to automate claims processing. Only 31% of providers surveyed are using automation or artificial intelligence in claims processing — down from 62% in 2022.
The data suggests a “retreat from the broader embrace of automation” that occurred during and after the pandemic, according to the study.
Paradoxically, as hype has grown around AI, researchers said the “comfort gap” has plummeted. Those that are very or extremely confident in understanding automation, machine learning and AI fell to 28% compared to 68% in 2022.
Providers’ reluctance to harness AI in claims processing stands in contrast to payers, who automate claims review and denials.
Cigna, UnitedHealth and Humana are among the nation’s largest payers that have all used algorithms to review claims en masse.
The payers tout the technology as a boon for efficiency, arguing that it cuts down on time to review claims and is standard across the industry.
But payers have been hit with lawsuits for claims algorithms. UnitedHealth and Humana were accused of ending Medicare Advantage members’ care prematurely via algorithmic denial, while Cigna was accused of violating a California insurance law that requires manual review of claims.
