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California insurers deny a quarter of all claims, says new report
By Insure.com staff

Seven of California's largest health insurance companies rejected 26 percent of all claims submitted during the first three quarters of 2010, only slightly below the 26.8 percent rate of 2009, according to a new report by the Institute of Health and Socio-Economic Policy, the research arm of the California Nurses Association/National Nurses United (CNA/NNU).

The findings are based on information from the California Department of Managed Care, which regulates health maintenance organizations in the state.

The claim denial rates varied widely, from Aetna's 5.9 percent to Pacificare's 43.9 percent. Claim denial rates of other insurers were:

  • Cigna, 39.6 percent
  • Anthem Blue Cross, 27.3 percent
  • HealthNet, 24.1 percent
  • Blue Shield, 21.9 percent
  • Kaiser Permanente, 20.2 percent

Cigna increased its rejection rate by 5.3 percent, while Kaiser Permanent's rejection rate dropped by 7.4 percent. Blue Shield's denial rate slightly increased by 0.3 percent from 2009.

Claim denials generally refer to insurance payment rejections, the association said. CNA/NNU Research Director Don DeMoro said in a media statement that insurers do not distinguish between "eligible" and "ineligible" claims in data they provide the state. Ineligibility criteria offered by the state including disputes over contracts, interest or late payments, benefits "not covered," and court disputes.

DeMoro called on the state to require more transparency in reporting requirements to help consumers and employers determine the best value for their health insurance dollars.

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