By Chris Myers
"The Denial Game: How Insurers Keep Shifting the Goalposts"
In 2024, health insurers rejected a staggering 11.8% of hospital-based claim dollars up front—an increase from the already high 11.53% in 2023, according to Kodiak Solutions. Let that sink in: more than one out of every ten dollars billed by providers was initially denied.
And yet, by the end of the process, insurers paid nearly 97% of those same dollars.
So what changed? Certainly not the quality of care. Not the accuracy of billing. What changed—once again—was the justification for saying no.
The Denial Shell Game
The decline in denials based on prior authorization—from 1.6% in 2023 to 1.5% in 2024—is being touted as a sign of progress. But don’t be fooled. As Matt Szaflarski of Kodiak puts it:
“Claims that used to get denied for authorization... are now denied for different reasons.”
Translation? Insurers are simply playing a shell game with denial categories—swapping "prior auth denial" for "lack of medical necessity" or "missing documentation." The outcome is the same: delayed payment, wasted provider resources, and strained patient care.
Let’s be clear: this is not about ensuring quality or managing costs. This is about insurers protecting their margins at the expense of providers who are already burning out under the weight of administrative red tape.
Insurers: The New Masters of Rebranding
After the shocking murder of former UnitedHealthcare CEO Brian Thompson, public outrage prompted several major insurers—UnitedHealth Group, Cigna, Elevance Health—to promise to "cut back" on prior authorization requirements.
They made headlines. But behind the scenes? They simply changed tactics.
Instead of denying care before it's delivered, they’re now denying it after the fact. Instead of saying “you didn’t get permission,” they say “we don’t think this was necessary,” or “send us more records.” It’s the same gatekeeping, just wearing a new mask.
And while they may tout “investments in streamlining” prior auth, remember this: UnitedHealth Group shareholders are suing the company for pulling back on utilization controls—suggesting that even modest reforms threaten their bottom line.
The Real Cost
The Kodiak report also fails to disclose a critical variable: how many of these denials are due to provider error versus insurer gamesmanship? AHIP, the insurer lobby, eagerly points fingers at providers, but offers no data of its own. Convenient.
Meanwhile, hospitals and clinicians waste millions of hours chasing down denials that often get reversed anyway. That’s time stolen from patient care. That’s money lost to administrative overhead. That’s burnout fuel.
The Bottom Line
If insurers truly wanted to reduce waste and improve care, they would work with providers—not against them. They wouldn’t boast about denial rates like it's a metric of success. They wouldn’t shift the burden of proof to the very people delivering care. And they certainly wouldn’t hide behind language games to maintain the status quo.
Let’s call this what it is: an intentional strategy to delay payments, increase leverage, and preserve profit under the guise of "utilization management."
Until regulators force real transparency and accountability, this denial game will keep evolving—but the losers will remain the same: doctors, hospitals, and the patients they serve.
