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California nursing association says insurers reject 22% of claims

California Attorney General Jerry Brown has launched an investigation into insurance companies' claims-processing practices, on the heels of a report that found health plans in the state reject about a fourth of all claims. Based on information from the state's Dept. of Managed Health Care, the California Nurses Assn. in September reported that claims denial rates for the largest plans averaged 22% between 2002 and 2009. The denial rates include any time a claim was not paid -- whether the claim was a duplicate, was sent to the wrong insurer, was made for an ineligible patient or had incomplete information. For the first half of 2009, the group reported that denial rates for the six biggest plans ranged from a high of 39.6% for UnitedHealth Group's PacifiCare to 6.4% for Aetna (www.calnurses.org/media-center/press-releases/2009/september/california-s-real-death-panels-insurers-deny-21-of-claims.html). In a Sept. 3 statement announcing his office's inquiry, Brown said, "These high denial rates suggest a system that is dysfunctional, and the public is entitled to know whether wrongful business practices are involved." The CNA supports an expansion of Medicare to replace private insurers and said the rejection rates were evidence that private health plans put profits ahead of health. California Medical Assn. spokesman Andrew LaMar said the group hadn't yet reviewed the figures to confirm their accuracy. "We're very familiar with the territory of disputes with insurance companies over whether something should be covered or not," he said. Health plans accused the CNA of misrepresenting the figures it reported. They said the bulk of the "denials" reported were cases in which a physician working under a capitated arrangement sent a claim both to his or her independent physician association or group and to the insurer. The insurer already would be paying that group or IPA for care on a per-member, per-month basis, so the claim would be rejected or forwarded to the physician group. Even in cases where the plan determines that a service is not covered, that doesn't necessarily mean the patient wasn't treated, Cigna spokesman Chris Curran said in a statement. The full and original article can be found here: http://www.ama-assn.org/amednews/2009/09/21/bisb0922.htm
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