Our Point of View

September 4, 2009

Kaiser Permanente Comments on Claims Payment Study in the Los Angeles Times

A recent study about health care claims practices, covered in the Los Angeles Times, drew completely inaccurate conclusions about Kaiser Permanente, our care, and our payment approval practices.

Kaiser Permanente provides more than 40 million patient services each year, only a fraction of which were included in this report. Fewer than 2 percent of those services involve claims payments that are denied, not the 28 percent reported in the study.

It is important to understand that even in those two percent of cases where a claim was denied, no one was denied care. The care was received by the patient. This is about financial claims by third-party providers – which are not requests for care, but rather are requests for payment by a provider, after care has been received.

Claims are bills – they are sent when a Kaiser Permanente member is treated by a non-Kaiser Permanente provider. The care provider first delivers the care and then sends a bill requesting payment. We review and pay all appropriate claims (bills) for services delivered. However, denials can occur for a number of reasons, the majority of them having to do with paperwork:

• Duplicates: The number one reason for a denial is that a claim is a duplicate of a prior claim. Roughly a quarter of initial claim denials are because of duplicates.
• Incomplete Information: If a claim is incomplete, we need more information before we can pay it.
• Errors: In some cases, denials occur because external care providers have made a mistake in processing their bill. The claim can be paid once all errors have been corrected.
• Other Reasons: A denial may also occur because the service provided was not included in the member's benefit contract, or because the service should have been received inside the Kaiser Permanente care network, or the patient was not a Kaiser Permanente member at the time care was received. We also are required to report partial denials – where part of the claim was already paid – as a denial.

All claims are paid with the money Kaiser Permanente receives from our members and employers – through their premium payments – to purchase care on their behalf. We cannot pay claims without first making sure they are accurate, complete, and eligible for payment.

Kaiser Permanente is different than most other health care organizations, and the advantages of our integration help us deliver affordable high-quality health care and service. We regret that the characterizations of this study may have caused confusion for our members, and will be communicating with them to correct any misunderstandings.