The Problem: Rising Healthcare Delivery Costs, Complicated Coverage Policies, and Lack of Legal Representation Mean More Service Denials

Pennsylvania’s healthcare system, like that of every other state, has experienced rising costs of delivery, lack of adequate staffing, increasing numbers of uninsured, restricted choices, administrative bottlenecks, and lack of safety controls. Moreover, the recent economic downturn, combined with the rising costs of health care, has resulted in cutbacks in state budgets and healthcare delivery.  For instance, both operating and overall hospital margins fell during fiscal year 2007-08 (Pennsylvania Health Care Cost Containment Council 2009: 6-8). In addition, lawmakers have proposed significant cuts to hospital payments that will greatly impact patients and communities (Baumgarten 2009).

These developments have resulted in healthcare service denials to those with insurance (private and public) who are eligible to receive health care. The actual numbers of service denials (nationally or in Pennsylvania) are not transparent, but experts such as The Medical Billing Company estimate that 25-40 percent of all claims are either delayed or denied, and 50 percent of denied claims are never refiled. PHLP staff attorney Kyle Fisher states, “We don’t know the exact number of people denied services. From the volume of calls PHLP receives and the stories we hear, it’s a critical issue that we address daily.”

Research has shown that the uninsured and those faced with service denials are four times more likely to delay or forgo needed care than the insured, more likely to be hospitalized for avoidable conditions, and less likely to manage chronic conditions or seek preventive care (Kaiser Family Foundation 2008a).  Researchers at the Kaiser Family Foundation (2008b) have also estimated that continuous health coverage could decrease premature mortality rates by up to 25 percent among uninsured adults. Denial of healthcare benefits and the resulting lack of access to quality care are urgent issues.