Wednesday, September 9, 2009

Semantic Interoperability, EHR, etc. are of little use to someone whose claim is denied by his or her insurance company

Founded in 1945, Kaiser Permanente is this nation’s largest not-for-profit health plan, serving more than 8.6 million members, with headquarters in Oakland, California.

This blog has carried a prominently-placed electronic health records (EHR) video outlining some of the excellent information technology work that's being introduced by Kaiser Permanente.

So, given the placement of this video, I feel a responsibility to add here the reality that Kaiser Permanente's technology is only one facet of a system that daily makes decisions about who can and who cannot get health care.

The California Nurses Association/National Nurses Organizing Committee has just released new data that reveals more than one of every five requests for medical claims for insured patients, even when recommended by a patient’s physician, are rejected by California’s largest private insurers. (The Kaiser Permanente Health Plan membership in California is greater than 6 million.)

This is data that the health insurance companies have wanted to hide, and it’s just now becoming available. It documents that these insurance companies have denied, in California alone, 45 million claims since 2002. Some of these rates ranged as high as 40 percent (for UnitedHealthcare’s PacifiCare). And other large, giant insurers like Blue Cross, Health Net, CIGNA, and Kaiser were all in the range of 30 percent (Kaiser Permanente's denial rates is 28 percent). This report shows a clear pattern of very high denials by the very insurance companies that people depend upon to assure that they get the care they need when they need it.

There are a variety of reasons insurance companies claim why they make these denials: in the end though, it’s a war that goes on between the insurance companies and the doctors and the hospitals. (Note: Attorney General of California Jerry Brown has announced he’s going to conduct an investigation into the business practices of these companies and why these denial rates are so high.)

A recent piece in the Los Angeles Times quotes a spokeswoman for the California Association of Health Plans, responding to the data that the California Nurses Association/National Nurses Organizing Committee has just released, saying, “It appears [that] a good deal of the so-called denials are merely paperwork issues.”

It seems to me that even if you put the best face on the California Association of Health Plans' response, what it demonstrates is how much waste (aka administrative overhead) there is in the health insurance industry. It's been suspected for some time now that one-third of every healthcare dollar goes to waste and to enforcing claims denials in the United States..