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Hospitals, insurers and regulators call for deeper review as denials and prior‑authorization disputes spike
Summary
Two related measures — a work group to study rising adverse insurance decisions and a reporting/examination bill tied to spikes in denial rates — drew dozens of providers and regulators to the Health and Government Operations Committee.
The Health and Government Operations Committee held linked hearings on rising insurance adverse decisions: Delegate Jocelyn Pena‑Melnick’s work group bill (House Bill 995) to study denials and House Bill 848 requiring carriers to report sharp increases in denial rates and empowering regulatory examinations.
Nut graf: Hospital leaders, community clinics and the Maryland Insurance Administration told the committee denials and utilization‑management activity have grown sharply in recent years and said the state needs better data and standardized reporting to identify systemic problems. Providers urged the committee to authorize inspections, transparency tools and enforcement while regulators said a measured, data‑driven approach is needed.
Andrew Nicholas of the Maryland Hospital Association told the committee insured denials ‘‘have increased significantly since the year 2013, with the most drastic increases in the commercial payer space; medical necessity denials up 79 percent in the last six years.’’ Nicholas also said commercial emergency‑department denials have more than doubled in six years, with ED claim denials rising from about 6 percent in FY2019 to 15 percent in FY2024 for certain claim streams.
Maryland Insurance Administration chief witness Marie Grant said the MIA already regulates adverse‑decision processes and collects quarterly data, but that available figures show adverse decisions in the fully insured market rising from under 5 percent in 2015 to over 12 percent now. Hospitals and community health centers told the panel administrative costs at their operations have surged; Luminess Health’s CFO said billing and collections costs at one system rose from about $12.9 million in 2019 to over $32 million in FY2024 and write‑offs increased sharply.
Several witnesses urged a narrowly targeted response. House Bill 848 would require a carrier to report when adverse decisions for a category of service increase by a specified threshold in a given calendar year or over consecutive years and would allow the insurance commissioner to open examinations. Supporters said that sort of trigger would let regulators focus resources where denial spikes occur.
Ending: The committee heard competing approaches — broad policy reform or a focused reporting and study approach — and asked stakeholders to supply additional data. No committee votes were taken during the hearing.
