CHICAGO – Health insurers are paying claims more quickly and with greater accuracy, but they’re also erecting barriers by requiring more prior authorization, a new report from the American Medical Association has found.
The AMA’s fifth annual National Health Insurer Report Card shows that error rates on paid claims dropped from 19% in 2011 to just over 9% in 2012. The organization took some credit for the improvement.
Dr. Robert M. Wah
"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," Dr. Robert M. Wah, chairman of the AMA board of trustees, said in a statement.
The AMA estimated that the reduction in errors saved the health system $8 billion. If insurers paid claims in a more consistent fashion, another $7 billion could be saved, according to the report card.
The report analyzed claims for seven private insurers –- Aetna, Anthem Blue Cross/Blue Shield, Cigna, Health Care Service Corporation (HCSC), Humana, Regence, and UnitedHealthcare – as well as Medicare. It looked at data based on 1.8 million services billed on 1.1 million claims in February and March of 2012. Some 12,000 physicians submitted data.
Over the last several years, both timeliness and accuracy have improved for this group. From 2008 to the current report, response times have risen by 17%. HCSC and Humana had the fastest response times, at a median of 6 days. Aetna was the slowest, with a median response of 14 days.
Aetna was the third most accurate payer, however, with a 95% accuracy rate. Medicare scored highest, with a 99% rate, followed by United at 98%. Humana and HCSC were the least accurate at 87%.
The good news was tempered by two troubling trends, according to the AMA. After declining from 2008 to 2011, claim denials grew in 2012. In 2011, the overall denial rate among private insurers was 2%; that rose to almost 3.5% in 2012. Anthem Blue Cross/Blue Shield had the highest denial rate (5%).
Private insurers also began making more use of prior authorization. Humana’s prior authorization rate rose from 5% of claims in 2011 to 14% in 2012. That was the highest rate among the seven insurers and Medicare. Cigna had the second highest frequency, at 7%, up from 6% in 2011. Regence and Medicare had the lowest rates of prior authorization, at about 0.7%.
"The costly administrative burdens of the prior authorization process can complicate medical decisions and delay or interrupt patient care," said Dr. Wah. He said that the AMA is seeking to replace "the largely manual process with an automated decision support system that will enhance patient care and reduce paperwork costs."