CHICAGO — Twenty percent of health insurance claims are processed inaccurately, according to the American Medical Association's third annual National Health Insurer Report Card, which rates the nation's largest commercial insurers on timeliness and accuracy of claims processing.
Eliminating discrepancies in expected payment amounts would save doctors and insurers $15.5 billion annually, according to the report, which is based on a random sample of 2 million claims for 3.5 million services filed electronically February-March 2010 by 200 practices in 43 states.
Each year, claims processing costs as much as $210 billion and takes up 10%-14% of physicians' gross revenue and the equivalent for each physician of 5 work weeks, Dr. Nancy H. Nielsen, then immediate past president of the AMA, said in an educational session.
To remedy the problem, the AMA urges the creation of a single, transparent insurance industry standard “so that everybody knows in a seamless way how those claims are to be submitted and processed,” Dr. Nielsen said, adding that such a standard would reduce errors and free physicians to focus more on patients and less on administrative red tape.
Insurers made gains in some areas, including accuracy in the reporting of contract fees to physicians. They correctly reported contract fees 78%-94% of the time in 2010 versus 62%-87% of the time in 2008, Dr. Nielson said.
They also increased the transparency and accessibility of their fee schedules, according to Mark Rieger, chief executive officer of National Healthcare Exchange Services, Inc. of Sacramento, which conducted the research.
Physicians' electronic access to complete fee schedules plays a major role in processing accuracy, he said. “Where the payer makes the fee schedule available we have higher match rates.”
“There's still a need for better transparency. But we're optimistic that if payers continue to demonstrate some of the improvements that they've shown” additional efficiencies can be gained, he said.
Coventry Health Care, Inc. had the highest overall accuracy (88%), while Anthem Blue Cross Blue Shield had the lowest (74%). Other insurers addressed by the report were Aetna, CIGNA, Health Care Services Corporation, Humana, and UnitedHealth Group.
Mr. Rieger said that every 1% increase in the match rate for claims would generate a conservatively estimated $777.6 million for physicians and payers. A 100% match rate would yield an annual savings of $15.5 billion.
The AMA asked physicians to do their part to improve the claims process by working to submit claims correctly the first time and implementing practice efficiencies such as an effective electronic practice management system, said Tammy Banks, AMA director of practice management and payment advocacy. “There's a lot going on in the next five to 10 years. Make sure that your vendor is willing to notify you of changes and upgrades” in federal and state mandates and transaction codes, she emphasized.
Administrative portals for claims processing are not a long-term replacement for a direct relationship with payers through an effective electronic practice management system, she said.
The National Health Insurer Report Card is available at http://www.ama-assn.org/ama1/pub/upload/mm/368/2010-nhirc-results.pdf