More than 20% of patients who file medical claims based on their doctor’s recommendation have those claims rejected by California’s largest private insurers, according to the California Nurses Association/National Nurse Organizing Committee, who said the approach amounts to “very real death panels in practice daily” in the nation’s biggest state.

The groups are advocating expansion of the Medicare system to all Americans as a means of reform, saying none of the current proposals for health reform being weighed in Congress or by President Barack Obama address these denials.

“The routine denial of care by private insurers is like the elephant in the room no one in the present national healthcare debate seems to want to talk about,” said Deborah Burger, the groups’ co-president, in a statement. “Nothing in any of the major bills advancing in the Senate or House or proposed by the administration would challenge this practice.”

The nursing organizations called the denials “a very lucrative business for the insurance giants,” noting that the top 18 insurers “racked up” $15.9 billion in profits last year.

California’s six largest insurance companies rejected 31.2 million claims for care or 21% of all claims, the CNA/NNOC analysis of data reported by the insurers to the California Department of Managed Care between 2002 and June 30 found. The data was scheduled for presentation at the groups’ biennial convention in San Francisco Sept. 8.

The California Blues rejected 28% of claims in the first half of this year, and Kaiser Permanente denied 28% of all claims in the same period.

PacifiCare denied 40% of all California claims in the first six months of this year, while CIGNA rejected one-third of all claims in the same period.

CIGNA, based in Philadelphia, Pa., responded, saying the report included “selective disclosure of data that misrepresents the truth.”

CIGNA officials said in a statement that about half of the claims it denied in the first half of this year were a result of capitation, wherein per capita payments are made to a medical group and payment responsibility for that claim lies with that group. CIGNA called them “misdirects,” saying the doctor should bill the medical group not CIGNA.

“If CIGNA were to pay a misdirected payment claim, it could result in the doctor receiving two payments – one from CIGNA and one from the medical group,” the insurer said. About 37% more of the denials were because of prior payment, the company said.

“The United States remains the only country in the industrialized world where human lives are sacrificed for private profit, a national disgrace that seems on the verge of perpetuation,” Burger said.

CNA/NNOC supports an alternative approach, expanding Medicare to cover all Americans, which would give the U.S. a national system similar to what exists in other nations, according to the groups.

CNA/NNOC represents 86,000 registered nurses in all 50 states.