Insurers, patients pay less of their bills

Healthcare providers faced growing challenges last year in getting paid for care among patients covered by insurance, according to new benchmark data from Kodiak Solutions.

And it was both insurers and patients who were lagging in payment or not paying at all.

Denials of coverage by health plans, already a problem in 2023, increased during 2024, Kodiak’s numbers show.  Overall initial denial of coverage rates climbed to 11.81% of claims in 2024 from 11.53% the previous year.

That increase in initial denials came despite a drop in authorization-related denials to 1.52% of claims in 2024 from 1.64% in 2023.

Matt Szaflarski, vice president, revenue cycle intelligence for Kodiak, said the decrease in authorization denials is not that significant in the broader view. “We could celebrate and say that authorization-related denial rates decreased, but in totality, initial denials are increasing,” Szaflarski said.

There were increases in two other categories of denials, those related to requests for information (RFI) and those attributed to medical necessity. RFI-related denials rose to 3.49% in 2024 from 3.31% of claims in 2023. Rising to a lesser extent were medical necessity-related denials, which rose to 0.98% of claims from 0.94% in 2023.

There was bad news on the self-pay front as well, with collection rates from patients covered by managed care/commercial insurance falling to 34.46% from 37.58% a year earlier.

Szaflarski said the issue is an important one, given that more than half of bad debt write-offs are linked to insured patients.

“No longer is bad debt [driven by] uninsured population flowing through an emergency room,” he said, noting this change is definitely on providers’ radar.

“I know [that among] many organizations that we’ve talked to, point-of-service cash collections has been reignited as an initiative for 2025 moving forward,” Szaflarski said.