CHICAGO – Commercial insurers incorrectly processed about one in 10 claims in the early part of 2012, which is a major improvement over error rates from last year, according to the American Medical Association (AMA).
The finding comes from the AMA’s fifth annual National Health Insurer Report Card, which was released at the AMA’s annual house of delegates meeting here.
The report concludes that insurers incorrectly processed, or paid the wrong amount, for about 9.5% of all claims.
Last year’s report card found an error rate of 19%.
The AMA claims this reduction in errors adds up to $8 billion in health systems saving by eliminating costly administrative work to reconcile errors, and that’s not all the money that can be squeezed from the system. The report states that an additional $7 billion could be saved in insurance made no claim payment errors at all, the report found.
The AMA said its efforts to transform the “chaotic” health insurance billing and payment system are the reason the error rates were halved. AMA has worked with individual insurers over the past year to identify gaps in claims payments systems and try and correct those issues.
“The AMA has been working constructively with insurers, and we are encouraged by their response to our concerns regarding errors, inefficiency and waste that take a heavy toll on patients and physicians,” said AMA board chairman Robert Wah, MD, in a press release. “Paying medical claims accurately the first time is good business practice for insurance companies that saves precious health care dollars and frees physicians from needless administrative tasks that take time away from patient care.”
The findings from the 2012 National Health Insurer Report Card are based on a random sampling of about 1.1 million electronic claims for 1.9 million medical services submitted in February and March of 2012 to Aetna, Anthem Blue Cross Blue Shield, Cigna, Health Care Service Corporation, Humana, Regence, UnitedHealthcare and Medicare.
Payment timeliness and type of payment, accuracy, frequency of claim payments, and denials were assessed.
The AMA found that insurance companies have an overall claims processing accuracy rate of about 90.5%.
Every insurer improved its accuracy rate from last year. The payer that was most accurate at processing claims was UnitedHealthcare, for the second year in a row with an accuracy rate of 98%, and Humana came in last with a claims processing rate of 87%.
Anthem, the company with the lowest accuracy rate last year improved its accuracy rating drastically – jumping from a 61% accuracy rating in 2011 to an 88.6% accurate rate in 2012.
The AMA also looked at Medicare’s accuracy rate, and the public insurer bested the private companies with an accuracy rate of 99.5%.
The report card also found:
- Private insurers shortened response time for medical claims by 17% from 2008-2012. Health Care Service Corporation and Humana had the fastest median response times (six days) and Aetna had the slowest (14 days).
- Medical claims denials increased from 2011-2102. Anthem Anthem Blue Cross Blue Shield had the highest denial rate at 5%, while Regence had the lowest denial rate of a little more than 1%.
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans (AHIP), said that health insurers have made progress streamlining administration and improving efficiency, but doctors have a responsibility to improve claims payment processes as well.
“Health plans and providers share the responsibility of improving the accuracy and efficiency of claims payment,” he said in an email to MedPage Today.
“Health plans are doing their part by collaborating with providers and investing in new technologies to improve the process for submitting claims electronically and receiving payments quickly. At the same time, more work needs to be done to reduce the number of claims submitted to health plans that are duplicative, inaccurate, or delayed,” Zirkelbach wrote.
Source: By Emily P. Walker, Washington Correspondent, MedPage Today-Published: June 18, 2012