Health insurance coverage is critical for the payment of healthcare services and directly related to healthcare outcomes. We rely on health insurance to cover medically necessary services in our time of need. Unfortunately, insurance reimbursement denials for what is ultimately determined to be medically necessary care can have devastating consequences for all affected Pennsylvanians.

More individuals now know that they can appeal denied health care claims to their insurer and, subsequently, the Insurance Department. But the process for such appeals can be time-consuming and burdensome, with many individuals foregoing such appeals simply due to their administrative requirements. Shockingly, nearly 50% of denials are overturned on appeal, either internally or externally, meaning insurers shouldn’t have denied payment for the care in the first place. It is highly likely that when over 50% of appeals result in overturning a claim denial, there is a pattern of systematically wrongly denying reimbursement for medically necessary care.

This is why we are introducing legislation to impose penalties on insurers who repeatedly and wrongly deny reimbursement for medically necessary health care claims. Specifically, our legislation will require health insurers to report to the public their rates of denials overturned on appeal and pay escalating monetary penalties if more than 50% of their claim denials are overturned on appeal (attached).

It is time we hold these repeat offenders responsible. The risk of escalating monetary penalties for an established pattern of claims denials being overturned ensures that insurers will be more cautious in their claims evaluation process and that they respect the rights of their policyholders. This legislation would help restore trust in the health insurance industry, which has been eroded by practices perceived as prioritizing profits over patients.

Please join us in co-sponsoring this bill to protect consumers from these unjust denials of reimbursement for medically necessary care and to encourage health insurers to uphold their ethical and contractual obligations.
 

Statutes/Laws affected:
Printer's No. 1043: P.L.682, No.284