The vast majority of initial denials were for administrative reasons, such as duplicate or incomplete claims or other submission errors.
BOSTON — Today, the Massachusetts Health Policy Commission (HPC) released new research in the latest issue of the HPC DataPoints series, “Evidence of Administrative Complexity: Health Insurance Claim Denials in Massachusetts.”
In 2024, health insurers reported 45.9 million total commercial claims filed. The average overall rate of claim denial by insurers was 20.4%, meaning that approximately one out of every five claims submitted by providers to fully-insured health insurers in Massachusetts was denied.
Strictly clinical reasons for denying coverage, including medical necessity, made up at most 1% of denials for any insurer. The HPC found significant variation in the share of claims denied by insurers in Massachusetts, ranging from 28% by United Healthcare to 11% by Wellsense, but across insurers a large percentage of claims were denied for administrative reasons.
“Other administrative denials” was the most common category by a significant margin, accounting for 11.7% of all claims (5.4 million). This category primarily includes claims denied for not meeting the insurers’ rules and procedures, including timely filing, correct documentation, and services that should be billed separately. Another 4.9% of all claims (2.2 million) were denied for an incomplete claim, coding error, or duplicate claim or coverage – combined, claims denied within these administrative categories represented over 16% of total claims, a total of 7.6 million claims in 2024.
“The data on administrative claim denials highlight a broader issue across the health care system – administrative inefficiencies are illustrative of an overly complex system, and are a burden to clinicians, health plans, and ultimately patients. Each of those 7.6 million claims denied for administrative reasons represent time and resources spent by both a provider and insurer,” said HPC Executive Director David Seltz. “These data show there are opportunities to improve how care is accessed and paid for. Simplifying and streamlining billing and claims submissions is a clear step we must take to address inefficiencies in the health care system, and a step forward to more affordable, equitable, and accessible health care for all Massachusetts residents.”
Explore interactive data in the DataPoints issue on the HPC’s website.
