Strong denial management strategies can mitigate risk with ACA Marketplace plans
A new KFF study reveals a 20% average claim denial rate for ACA plans. Learn 4 proven strategies to protect your practice’s revenue and prevent denials.
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At a Glance
- ACA Marketplace plans have an average denial rate of 20% for in-network claims, with some insurers denying up to 54% of claims, while enrollment in these plans has doubled since 2021 to 24.2 million consumers, according to a recent KFF analysis.
- The study found that 18% of denials were due to administrative reasons, and major insurers like Blue Cross Blue Shield of Alabama (35%) and UnitedHealth (33%) had some of the highest denial rates nationwide.
- Healthcare providers can combat these high denial rates through 4 key strategies: investing in front-end staff education, fixing administrative errors, empowering staff with proper tools and technology, and actively appealing denied claims.
Twenty percent. That’s the average denial rate for in-network claims submitted to non-group qualified health plans (QHP) purchased directly through HealthCare.gov, i.e., Affordable Care Act (ACA) Marketplace plans, according to an analysis from KFF published January 27, 2025.
What is a QHP? A QHP is an insurance plan that’s certified by the Health Insurance Marketplace. That means it provides essential health benefits, follows established limits on cost-sharing (e.g., deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements under the ACA.
The KFF analysis is based on publicly available federal transparency data from 175 insurers and does not include data from QHPs offered on state-based marketplaces or group plans.
As noted above, the 20% denial rate for in-network claims is an average. A deeper dive into the data reveals more variability — specifically, denial rates for in-network claims varied from 1% to 54%. Of the insurers surveyed, 22 had an in-network denial rate of less than 10%, while 29 had a denial rate of 30% or more.
Nationwide, the insurers with the highest volume of in-network denials were Blue Cross Blue Shield of Alabama (35%), UnitedHealth (33%), Health Care Service Corporation (29%), Molina (26%), and Elevance (23%).
Denial management: Learning from the data
The KFF analysis comes against the backdrop of growing enrollment in all ACA Marketplace plans. CMS reports that 24.2 million consumers selected plan year 2025 coverage through the marketplaces during the 2025 marketplace open enrollment period, including 3.9 million new consumers. This represents more than double the number of enrollees compared to the 2021 open enrollment period.
“Consider the following 4 strategies to promote effective denial management and prevention across all payers, including those offering ACA Marketplace plans.”
Fortunately, the KFF analysis provides several insights providers can use to improve revenue cycle management (RCM) processes. The following 4 strategies promote effective denial management and prevention across all payers, including those offering ACA Marketplace plans.
1. Invest in front-end staff education
Educate front-end staff on the downstream effects of improper patient registration and why it’s important to pay attention to detail when capturing demographic and insurance information. Seemingly minor errors can lead to claim denials that result in unnecessary expenses and frustrations for patients, many of whom are already burdened by rising healthcare costs.
When verifying benefits and eligibility, front-end staff should focus on obtaining the following information to prevent common ACA Marketplace denials cited in the KFF analysis:
- Active versus inactive coverage
- Date of coverage activation
- Excluded services
- Enrollee benefit limits
- Medical necessity requirements
- Referral and prior authorization requirements
Note: Here’s a checklist you can use to master insurance verification and prevent claim denials, as well as a simple protocol to collect and verify insurance information accurately. Establishing a foundation of accurate information on the front end helps capture and protect revenue on the back end.
| Optimize your revenue cycle workflow, increase insurance reimbursements, and reduce denials with Tebra’s electronic claims submission tools. |
2. Fix administrative errors
Of in-network claim denials, 18% occurred due to administrative reasons, according to the KFF analysis. To avoid common ACA Marketplace denials cited in the KFF analysis, providers should focus on denial management and prevention strategies to:
- Avoid inconsistent procedure and diagnosis code combinations
- Ensure proper credentialing for all providers in the medical practice
- Inquire about work-related injuries or issues
- Prevent duplicate claim submission
- Reduce manual data entry errors
- Respond to insurer requests for additional documentation
- Submit claims within payers’ filing deadlines
- Verify coordination of benefits
3. Empower staff with tools
Front-end staff, medical coders, and medical billers benefit from tools designed to increase efficiency, improve denial management, and reduce errors. Consider these examples:
- Ensure clean claims with claim rejection checklists and claim scrubbing tools that include 2025 updates for CPT and ICD-10-CM.
- Instantly identify whether patients have coverage with the help of real-time eligibility verification tools.
- Reduce manual data entry errors with digital intake tools.
- Track rejections and denials with claim tracking tools and complementary reports. Then, use this information to correct errors, gather missing information, and resubmit claims.
- Understand why claims are paid or denied with electronic remittance advice alerts.
4. Appeal denials
While it’s always best practice to prevent denials, it’s equally important to appeal them when they occur. Here’s a sample letter for appealing a health insurance claim denial.
“While it’s always best practice to prevent denials, it’s equally important to appeal them when they occur.”
Providers can also engage patients in this process. Patients can file an internal appeal and, if necessary, appeal to an external third party. Interestingly, the KFF analysis found that HealthCare.gov consumers appealed less than 1% of the 73 million in-network denied claims in 2023.
Denial management: People, process, and technology
When combined, staff education, optimized workflows, and the right revenue cycle management technology help today’s medical providers combat denials from various payers, including those offering ACA Marketplace plans. As enrollment in these plans continues to grow, developing a strategy for denial management — and prevention — is critical.
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