Medicare Advantage Denies 17 Percent Of Initial Claims; Most Denials Are Reversed, But Provider Payouts Dip 7 Percent.

Abstract

This article quantifies the prevalence of claim denials in Medicare Advantage (MA), along with their direct impact on provider revenue. Employing medical claims data from multiple MA plans, covering 30 percent of the entire MA market in 2019, our study found claim denial rates of 17 percent as a share of initial claim submissions. We also found that 57 percent of all claim denials were ultimately overturned. We calculated that denials resulted in a 7 percent net reduction in provider MA revenue, based on the dollar-weighted share of claim denials that were not overturned. However, the indirect impact of denials could be even greater than this direct effect that we measured. This article points to the important role that claim denials play in reducing MA spending and in driving outcome differences between MA and traditional Medicare. However, our analysis did not weigh the cost-saving benefits of claim denials against potential downsides.