News: Cost of prior authorization denials saw 67% increase in 2022, most disputed claims included ED codes

More and more studies point to denials as a growing concern for revenue cycle leaders. Yet another report, a recently published analysis by Crowe RCA, showed that denials rose up to 11% of all claims last year, nearly 8% higher than in 2021. That 11% translates to about 110,000 unpaid claims for an average-sized health system, HealthLeaders reported.

Prior authorization denials on inpatient accounts showed to be a key driver behind the dollar value of denials increasing to 2.5% of gross revenue in August 2022 up from 1.5% of gross revenue in January 2021—an increase of 67%.

According to a new report by the HHS, the Department of Labor, and the Department of Treasury, with the independent dispute resolution (IDR) process of the No Surprises Act, one set of codes encompassed 66% of disputes. The IDR process allows out-of-network providers and payers to hash out payment for items or services if they aren’t satisfied with the open negotiation period’s outcome mandated by law, HealthLeaders reported. The most common CPT codes disputed were emergency department service codes (66% of disputes), radiology codes (9% of disputes), and anesthesia codes (7% of disputes).

The IDR portal opened on April 15, 2022, through which the Departments estimated 17,333 claims would be submitted annually. Instead, 90,078 disputes were submitted from April 15 to September 30, 2022, most filed during the third quarter from July 1 to September 30 (71,915). Providers and payers have not seen eye-to-eye on how the IDR process should be settled, with medical associations filing multiple lawsuits.

Editor’s note: To read HealthLeader’s coverage on prior authorization denials, click here. To read HealthLeader’s coverage on IDR, click here. To read the Crowe RCA analysis, click here. To read the IDR report, click here.