BY: Michelle Strunk, Vice President, Provider Operations
The U.S. healthcare system is complicated enough without surprise bills showing up after the patient has already fought through an illness. Today, patients are shouldering a greater share of their medical costs than ever before. At the same time, systemic inefficiencies and missteps—ranging from unclear policies to inconsistencies in claim processing—can leave patients uncertain about their financial responsibilities. Patients deserve to understand what’s happening behind the scenes and how to protect themselves from getting stuck with the bill.
The burden on patients has never been higher. Patients are tasked with navigating intricate insurance policies, which even healthcare providers’ billing teams find difficult to interpret. Factors such as copays, deductibles, exclusions, and claim denials contribute to this complexity. Instances where policies are interpreted differently or where coverage determinations shift mid-treatment can create additional financial strain. These situations highlight the need for improved clarity, communication, and alignment across all stakeholders in the healthcare ecosystem. Understanding how and why these denials happen is the first step toward protecting the patient from additional unforeseen expenses.
At TREND Health Partners, we work upstream of these issues, focusing on identifying patterns within the healthcare system that contribute to these challenges. By analyzing denial trends and fostering collaboration between payers and providers, we work to enhance coverage accuracy and reduce financial burdens for patients. While our work centers on systemic improvements rather than direct patient engagement, the insights we uncover tell a clear story: claim complexities are increasing, transparency is lacking, and patients are often caught in the middle. Understanding these dynamics is a crucial step toward creating a more balanced and equitable healthcare system for all. Here’s what every patient should know and what the system must change.
The Denial Problem: Why It’s Happening More Often
Claim denials are becoming more frequent, reflecting the growing complexities and inefficiencies within the healthcare system. These challenges arise from a confluence of factors shared among insurance companies, healthcare providers, and government regulations. For patients on Medicare Advantage plans, denials may result from nuanced interpretations of Medicare policies, including how care is classified, the timing of admissions, or assessments of whether care meets the criteria of “medical necessity.” These interpretations can vary across stakeholders, contributing to inconsistencies.
For example, if a patient is readmitted to the hospital within 30 days, the second stay may be automatically flagged to systemic efforts aimed at reducing hospital readmission rates, yet such flags can sometimes lead to denied claims even in cases unrelated to the prior admission. Similarly, discrepancies between how hospitals classify patient stays (e.g., inpatient versus outpatient or observation) and subsequent retroactive reviews by insurers can result in unexpected financial responsibilities for patients. These differences often stem from a lack of alignment and clarity in policy across the healthcare ecosystem.
Medical Necessity determination also illustrates this systemic challenge. While a procedure may be deemed essential by a physician and supported by a hospital, varying interpretations of necessity criteria among payers can lead to denials. These situations underscore the need for improved communication, policy alignment, and transparency among all stakeholders to ensure a more equitable and efficient system for patients. By addressing these shared inefficiencies, the healthcare system can move toward a more balanced and collaborative approach that prioritizes patient care and financial clarity.
TREND has a proven record of success in working with the payer and the provider to help better align payment accuracy and policy to prevent blanket denials. Working collaboratively with the payer and provider, TREND has been successful in getting policy changed with payers on important exclusionary circumstances specifically with regards to readmissions to prevent denials and pay the claims appropriately. The payer had a narrow focus when reviewing readmission denials. TREND identified the recurring denials issue that conflicted with CMS guidelines and clinical best practices, recognizing a need for a broader, more patient-centered approach. Through engagement with the client and the medical director, TREND was able to help facilitate change at the payer on their readmission policy to exclude specific reviews. This was a meaningful win for the patient, the provider, and the payer as unnecessary rework was eliminated.
How Denials Impact the Patient
For patients, these denials aren’t just frustrating – they’re devastating. Many find themselves responsible for thousands of dollars in medical bills they never expected. This financial uncertainty causes confusion about what is covered and adds significant emotional stress, especially during or after a serious illness.
This shift is causing people to now hesitate to seek care, not because they don’t need medical attention, but because they’re afraid of the potential cost.
How This Can be Controlled
While the system is flawed, there are steps that can be done to keep the patient informed and mitigate denials. There are several steps that can be taken to help reduce the risk of a denial or unexpected charges billed to the patient.
- Start by confirming whether the procedure requires prior authorization. Missed authorizations are a preventable nuisance, causing unnecessary fatal denials. Educate and encourage the patient to look up their benefits and make sure the service has been approved and is a covered benefit under their plan.
- Review payer guidelines on inpatient, outpatient, and observation classifications and ensure prebill stops are put in place to review potential downgrades and denials. These categories carry very different cost implications for both the provider and the patient. Denials delay both the payment to the provider and patient responsibility billed to the patient. Payers and providers need to collaborate, discussing medical necessity guidelines and inpatient criteria to ensure they are aligned.
- Encourage patients to review and follow the care team’s instructions after their procedure and discharge. Many readmissions can be avoided by sticking to medication, follow-up visits, and discharge plans. Education to the patient can help prevent unnecessary readmissions.
- Verify that the procedure is a covered benefit. Some treatments, especially under commercial plans, may be considered experimental. These are often denied outright and billed directly to the patient. Additionally, there are exclusions or limitations that might apply to the benefit. Some services, like dental or specialty pharmacy treatments, require specific providers or locations. Make sure the place of service is appropriate before performing the procedure.
- Understand all appeal rights. Know the timeline and process for submitting an appeal. Appeal rights are held not only by the provider, but the patient as well. Additionally, there appeal rights outside of those sent to the payer that can be explored.
- If the insurance coverage has policy changes during the course of treatment, consider whether this is eligible for Continuity of Care protections. These policies may allow care to continue under the original policy coverage if switching providers would jeopardize patient health. Educating the patient on this benefit can prevent denials and continue their care.
Why the System Is So Hard to Understand
Insurance policies are difficult to understand. Even hospital administrators sometimes struggle to interpret benefit language and coverage exceptions. Medicare Advantage plans add another layer of complexity. While they are marketed as Medicare plans, they are run by private companies and can follow different rules. What’s covered under traditional Medicare may be denied under an Advantage plan.
Price transparency also remains elusive. Though hospitals are required to post certain prices, the information is often incomplete or hard to interpret. That leaves patients flying blind when making critical care decisions.
What Needs to Change
Patients shouldn’t have to be insurance experts to get the care they need. Insurers must stop shifting the burden of coverage confusion onto the patient. Hospitals and health systems need to take the lead in improving benefit education and communication. The adversarial payer-provider relationships have to stop.
We believe denial prevention starts with transparency. TREND partners with both payers and providers to surface the real reasons behind denials, improve appeal success rates, and eliminate unnecessary friction in the claims process. It’s not just about fixing denials but about fixing a broken system and providing collaborative solutions that benefit all parties to make healthcare more efficient.
It’s time to simplify benefit documents and explain them in plain language. Patients should be able to access real-time cost estimates and understand the denial risk before they receive care.
The American healthcare system is undeniably complex. But that doesn’t mean that patients are powerless. Through collaboration and communication, we can all work together to mitigate denials and prevent rework on all sides. When claims flow through the process without the abrasion of denials, all parties, especially the patients, win.
This article is part of TREND Health Partners’ thought leadership series on strengthening the healthcare financial ecosystem. We believe that true security isn’t just about technology, it’s built on culture, collaboration, and shared accountability. To explore more insights on a people-first approach to cybersecurity and revenue-cycle resilience, click here to read more from our team.