If you’ve ever stared at a denial letter and thought, “Seriously?” you’re not alone. A Kaiser Family Foundation (KFF) poll found that roughly one in three insured adults reported having a health plan deny coverage for a health care service within the past two years.

More denial statistics

KFF also did an in-depth study of the denial statistics of plans that sell insurance on Healthcare.gov. They found that an average of 19% of in-network claims submitted in 2024 were denied. That’s almost 1 in every 5, a statistic that has remained pretty stable over the years.

Perhaps more of a surprise (at least to me) was that a significantly higher percentage (37%) of out-of-network claims were denied.

Reported denial rates varied widely by state, with Hawaii having the highest average denial rate in 2024 (Alabama won that sad trophy in 2023). South Dakota once again took the ribbon for lowest denial rate. And even within a state, there was significant variation in denial rates between health plans that operated there, with in-network denial rates ranging from as low as 3% at one health plan to as much as 36% at another in the same state.

So, who are the “bad actors?”

Does the health plan you work with have high denial rates? Some of the plans with higher denial rates as reflected in the KFF study of 2024 claims are listed below. [Blue Cross/Blue Shield Plans were separated by region/state as they operate independently]. Some plans with higher denial rates included:

• Oscar Health (25%)
• “Molina Healthcare (22%)
• Guidewell, parent company to Florida Blue (22%)
• CIGNA (21%)
• Blue Cross Blue Shield of Tennessee (21%)
• United HealthCare (19%)
• Health Care Service Corporation (18%)
• CareSource (18%)
• Centene (18%)

It is noteworthy that the denial rates of United Healthcare, the nation’s largest insurer, dropped 15 points, from 34.2% in 2023 to 19.1% in 2024 across 6.4 million claims.

See the full KFF chart with more details here

Why are claims being denied?

Ah yes, it would be nice if health plans gave some clarity about their reasons for denials. But they usually don’t. When faced with a checklist of possible denial reasons, for 36% of claims (over 28 MILLION claims) the health plans listed the vague denial excuse of “other reason not listed.” Other responses that gave a bit more information were “administrative reason” (25%), “billed service was an excluded service” (13%), “lack of prior authorization or referral” (9%), “member not covered” (7%), and “client had reached benefit limit” (5%).

Notably, in 2024 Healthcare.gov health plans reported ZERO behavioral health claims were denied due to lack of medical necessity. But it is important to remember that these denial rates and reasons apply only to plans sponsored by HealthCare.gov plans. According to Kaiser’s 2023 consumer survey, clients with employer-sponsored insurance reported slightly higher denial rates, while Medicare and Medicaid plans reported lower rates.

Sicker people get more denials

And it’s probably no surprise that people who use more health services are more likely to experience denied claims. Out of patients who had more than 10 provider visits in the past year, 27% experienced a denied claim, while only 21% of those who had 3-10 visits in a year experienced a denial. Clients with less than 3 visits in a year experienced a denied claim only 14% of the time.

Are people appealing the denials?

The short answer is “no.” KFF found that while clients or therapists may call the health plan to inquire about denials, fewer than 1% of denied claims are formally appealed. This is despite the fact that various studies show that a high number of denials are successfully overturned on appeal (40-75%).

Perhaps one reason for the low appeal rate is explained by the KFF survey, which found that 69% of clients who experienced denied claims didn’t know they could appeal, and 86% didn’t know what government agency to call for help.

What you can do to bring about change

Despite these statistics, there are still things we can do to change the system and reduce denials:

1. Appeal denials. We have to push back. If we don’t, health plans have no incentive to stop denying so many claims.
• In my last newsletter article, I introduced you to ProPublica’s Claim File Helper, a tool that can create a letter for you to request the health plan’s claim file, to give you information to help with an appeal
• But get this: Other tools such as Counterforce Health and FightHealthInsurance.com can even analyze denial documents and actually draft the appeal letter for you.* [Note: a similar website, Claimable, does not appear to assist with mental health appeals].
• Encourage clients to appeal, and be willing to help them. The KFF report implies that we have not done a good job in educating clients about their right to appeal denials.
2. Slow down at the start of treatment: While clients are often anxious to start therapy right away, be sure you check coverage and get any needed authorizations. Also, many claims are denied for simple typos or data entry errors at intake, so double check all your entries.
3. Read my article about avoiding denials — click here