Rising denials by health insurance plans are harming the patients they ‘serve’

picture of health insurance plan employees making a decision about medication coverage

Imagine if you are diagnosed with cancer and now your treatment is delayed because you are denied immediate access to the medications you need.

This is what happened to Jasmine St. Clair, a 45-year-old restaurant manager from Tennessee, who was diagnosed with a rare form of lung cancer in 2021, as detailed by the Kaiser Family Foundation (KFF) in a recent in-depth report.

Over the past few years, millions of Americans have experienced similar denials due to a variety of intricate factors associated with their health care plans.

The grounds for these denials are multifactorial. According to KFF, they include claims made for an excluded service (14%), lack of preauthorization or referral (8%), and lack of medical necessity (2%). Of the 17% of in-network claims denied in 2021, most plan-reported denials (77%) were for ‘all other reasons.’

Jasmine St. Clair was prescribed treatment following her cancer diagnosis, but treatment was delayed when she had difficulty filling her prescriptions. This brings up the role of pharmacy benefit managers, or PBMs, which oversee prescription medication benefits for insurance plans and payers. Jasmine was directed by her insurer’s PBM, Express Scripts, to refill her prescription with its mail-order pharmacy, Accredo, according to KFF. During this delay, her symptoms became worse. Months later, after starting her treatment, her tumor began to shrink. But then, her husband’s insurance changed, which led to another delay in getting her medications.

When Jasmine reached out to Accredo, she was told she owed $8,000.

This issue was ultimately resolved, but the unnecessary stress for Jasmine in dealing with this mishap may have been avoided.

How the health insurance industry adds to the coverage confusion

Another example, as cited by U.S. Rep. Buddy Carter (R-GA), is Jessica Wofford, a Registered Nurse who has been suffering from Crohn’s disease for more than 15 years. Jessica experienced a lot of challenges with her insurance company and did not hold back when describing how her condition worsened as a result. The barriers in her health plan included the prior authorization process, delaying access to necessary treatments, and the constant back and forth between what has been prescribed by her gastroenterologist and what she is allowed. Beyond this, there is immense confusion around PBMs and copay assistance. These factors have created unnecessary stress and uncertainty regarding the accumulation of fees and rising personal debt.


Jasmine and Jessica are certainly not alone. In fact, in April 2023, the Washington Post published a number of testimonials from readers—real patients—who faced battles over coverage of necessary treatments.

Insurance policies contain complicated jargon even the savviest of medical professionals struggle to understand. The intricate web of information makes it difficult for the policyholder to interpret what is covered and what is not. From either end, complete lack of transparency may lead to inadvertent errors in claim submissions, which recurrently results in denials by the coverage supplier.

There is also an increasing reliance on technology and automated claims processing systems. These programs were initially meant to save time and resources though now may contribute to a variety of errors and oversights. When profitability takes precedence over health care, more aggressive cost-containment strategies and stricter guidelines take over. The result is heightened scrutiny of submitted claims and an inclination to deny coverage.

What is the deal with PBMs?


In addition to rising denials of claims, the doctor-patient relationship is increasingly being challenged by non-medical facilitators working in conjunction with insurance companies—namely, PBMs. In fact, 80% of the billion-dollar prescription market today is controlled by “the big three” PBMs: CVS Caremark, Optum Rx, and Express Scripts.

PBMs negotiate prescription drug prices with manufacturers on behalf of the insurance companies, and receive rebates in exchange for including the manufacturers’ products in the formulary of drugs covered by insurers. As Bio.News has previously reported, PBMs are supposed to use the rebates they get to lower drug prices for patients, but research shows that’s not happening. PBMs often pocket the rebates or pass them through to health plans that do not use them to lower patient out-of-pocket costs for medicines.

Health insurers and PBMs continue to profit from massive rebates and discounts on medicines while forcing patients, especially seniors, to pay more. Net prices for brand medicines remained flat in 2022. In fact, they have been below or in line with the rate of inflation for the past five years. And net prices for brand medicines are 50% lower than their list prices, on average. Meanwhile, insurers and PBMs increasingly are shifting more and more costs to seniors. Rebates and discounts should be shared with seniors at the pharmacy, but instead, 92% of seniors’ out-of-pocket spending on brand medicines is based on the undiscounted list price. And 9 out of 10 seniors taking a brand medicine are exposed to the full price through deductibles and coinsurance.

Furthermore, according to a recent report from an organization called Patients Rising Now, PBMs maintain control by creating stiff barriers between patients and their prescribed treatments. This includes delaying prior authorization and a practice known as “nonmedical switching.”

Nonmedical switching appears to mainly affect those patients with rare and more chronic conditions, including Crohn’s disease, cardiovascular disease, seizure disorders, and certain autoimmune diseases. Management of this sort takes control away from the patient’s practitioner and creates a tenuous situation for patients who have found stability on a specific medication that their insurance company has suddenly stopped providing coverage.

With the power of PBMs to control how much patients pay for prescriptions, where they can obtain their prescriptions, and now, the types of treatments these patients can receive, the question truly comes down to this: how well does this industry know and care for the individual?

Kate Pecora, a San Diego resident with a rare neuromuscular disease (and another patient highlighted by Rep. Carter), echoes Jessica Wofford’s sentiment that her insurance provider and PBM are affecting her quality of life. As she requires scheduled physical therapy and the support of her health care provider to prescribe the necessary medical equipment, her insurance company and PBM did not approve of a wheelchair, citing a lack of medical information for approval, even though she is unable to walk. The response from both the insurance company and PBM entails allowing time for insufficient and solitary treatment to work without the clinical understanding that her particular neuromuscular disease is potentially progressing to a point of no return.

Given more and more patients across the U.S. are stepping forward with similar challenges and concerns, the time is now to find solutions. Facing the complexity of this issue head-on to instill long-lasting change is a seemingly uphill battle. But the future of an equal, patient-centered, and affordable health care system is depending on it.

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