ONTD Political

Medicare has a higher Claim Rejection Rate then private insurance.

3:28 pm - 10/07/2009
Beverly Gossage, Research Fellow for Show-Me Institute and founder of HSA Benefits Consulting wondered which insurance companies rejected the most claims. She found her answer in the AMA’s own 2008 National Health Insurer Report Card.

http://www.ama-assn.org/ama1/pub/upload/mm/368/reportcard.pdf (big pdf file!)

The chart below appears on page 5 of the 16-page report.

Of the eight insurers listed, Medicare is most likely to reject a claim, sending away 6.85% of requests. This is more than any private insurer and double that of the private insurers’ average.

jesidres 7th-Oct-2009 08:19 pm (UTC)
Nevermind that Medicare does not deny people coverage for pre-existing conditions, and 6 times as many covered as the next leading insurer.

Also, lol @ the source. So I'm taking this with a grain of salt. Several, in fact.
bludstone 7th-Oct-2009 08:22 pm (UTC)
lol @ the source.

The American Medical Association journal? seriously?
dwer 7th-Oct-2009 08:26 pm (UTC)
I'll bet you dollars to doughnuts that a big part of that is because Medicare tends to cover people who are more sick and more elderly.

If the covered populations were the same, the numbers would be different.
stopthetrack 7th-Oct-2009 08:55 pm (UTC)
IA. There are many hidden variables this basic data doesn't show, and it should probably be noted that Medicare's percentage of cases being denied isn't ridiculously higher than the insurance corporations.

I feel like with this information Biggovernment.com is trying to prove Medicare and any state run health program is a failure, but I don't really see this information proves that.

snowe 7th-Oct-2009 08:26 pm (UTC)
Gah, Medicare just can't win! One day, conservatives accuse it of massive fraud, and now they're aren't paying for enough procedures...You can't have it both ways.
peacenlove2332 9th-Oct-2009 01:44 am (UTC)
well there is plenty of fraud... that just goes without saying for pretty much anything nowadays

but yes lol @ the not paying enough for procedures...
gmth 7th-Oct-2009 08:29 pm (UTC)
This is probably because people don't realize Medicare, just like every other insurance plan, doesn't cover absolutely everything. There are certain categories of products and procedures that aren't covered because they may not be medically necessary (e.g., plastic surgery or certain drugs belonging to classes where both generics and incredibly expensive brand names are available; they will always cover the generics but not necessarily the brands). This is true of ALL insurance plans, but people seem to think Medicare covers every drug/device/procedure under the sun and so file for it even if it's not covered. Those claims all have to be denied. The fact that Medicare covers so many people means there are many, many more such claims filed. Seniors covered by Medicare most likely are NOT being denied if the claim is legitimate.

There is also the matter of the "doughnut hole" that our wonderful Congress voted in a few years ago, where seniors get screwed until they meet a certain (very high) level of prescription drug costs in a 12-month period. Those claims are probably all showing up in the "denied" column as well. Talk to your Congressperson about that if you don't like it, don't blame Medicare.
bludstone 7th-Oct-2009 08:31 pm (UTC)
Now this is the type of comment that i was hoping for. Good stuff here.
syndicalist 7th-Oct-2009 08:40 pm (UTC)
Biggovernment.com is generously supplying this info, huh?

Welp, nothing to do now but join the Libertarian Party I guess. :/

bludstone 7th-Oct-2009 08:41 pm (UTC)
no, the AMA is.
papilio_luna 7th-Oct-2009 08:50 pm (UTC)
I'd need to see this study controlled for... like a lot of stuff. Medicare does not cover the same population as private insurance. It's like comparing an inner-city elementary school to a suburban private high school and saying the elementary school is failing because the kids can't read Jane Austen.
mylaptopisevil 7th-Oct-2009 08:56 pm (UTC)
gmth pretty much made the point I was going to ask (my initial reply was about what was being rejected... through some really dumb stuff on my part I tried to use my insurance to pay for a basic dental checkup — the rejection was totally because I forgot if my plan covered dental and my dentist figured it couldn't hurt to check. But that would probably show up on this chart as much as when the same insurance said I didn't need anesthesia for surgery).

THAT said, I'll laugh if the Republican party tries to use this as a new talking point, right after Michael Steele said the AMA has no credibility.
ubiquitous_a 7th-Oct-2009 09:07 pm (UTC)
For God's sake! Don't confuse the GOP with FACTS, of all things! Egads!
mylaptopisevil 7th-Oct-2009 08:58 pm (UTC)
One quick afterthought too...

I notice the chart says that a denial means anytime they're not charged $0. I wish that partial coverage and outright denial was separate.
mr_spivens Quick note from a statistician7th-Oct-2009 09:22 pm (UTC)
When you read a summary of another report, it's really in your best interest to look at the original report instead of accepting what the summary says. For example, if you look at the AMA report's breakdown of the reasons for each insurers denials, you'll see that Medicare's distribution is quite different from the others'. Medicare's top reason for a denial was information is missing. This is not a real denial, it is a denial with a request for more information. There was no follow-up done to see if the claim was actually denied at the end of the process.

This table above is the metric 12 table. The metric 13 table is where the real information is. Look at the distributions starting on page 6* and the following table to get a real idea of what's going on.

* These are some badly done histograms but you can at least get the basic idea of the differences in denial reasons for the various insurers.
ubiquitous_a Re: Quick note from a statistician7th-Oct-2009 09:58 pm (UTC)
Yay numbers geeks! :D

These are all great points of differentiation between how private insurance does business vs. Medicare, and how some may be apt to lump them in together.

I think you also hit the nail on the head in that a study or survey could be done by a non-partisan organization, but if the summary of that data is written by other different organizations, any number of very differing conclusions could be drawn to support one's own theories.

So, going back to your first point......reading the original report is always best.

It reminds me of when the initial CIA memos came out citing a UK study that the use of sleep deprivation for subjects being interrogated was perfectly safe up to prescribed periods of time. But the UK doctor who actually did that study came out and said that those results were under very controlled circumstances, and were not valid when combined with all of the other forms of stress the Gitmo detainees were being placed under. In fact, he said that sleep deprivation combined with all of those other forms of interrogation being used, would actually exponentially exacerbate the stress on the subject.

Anyway, this just reminded me a bit that context is everything.
zestylime 7th-Oct-2009 09:54 pm (UTC)
meanwhile 100% of uninsured people remain uninsured and cannot claim jack shit.

yeah i know, gmth did it better.
___closetome 7th-Oct-2009 10:35 pm (UTC)
jennem and mr_spivens made really good points too.
haruhiko 8th-Oct-2009 03:15 am (UTC)
Once the claims are approved, does Medicare put people through the same stalling/nickel-and-diming/gotcha-on-a-technicality bullshit that private insurance companies do?
bushy_brow 8th-Oct-2009 04:14 am (UTC)
Oh, HALE no! Which is why the recipients have such a high overall opinion of Medicare.
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