AMA: One in Five Claims Are Processed Incorrectly

The nation’s five largest health insurers processed 20% of medical claims incorrectly in 2009, according to the American Medical Association’s annual "Health Insurer Report Card." The inaccuracies resulted in backlogs in processing, anger and confusion among patients, and wasted time and delayed payments for physicians, according to the AMA.

The annual scorecard gave Anthem Blue Cross Blue Shield the lowest marks among the seven commercial health insurers surveyed, with a claims accuracy rating of 73.98%. Coventry Health Care Inc. scored the highest, with an accurate rating of nearly 88.41%.

The report card, released at the AMA's annual meeting in Chicago, is based on a random sampling of about two million electronic claims for approximately 3.5 million medical services submitted in February and March of 2010 to Coventry Health Care, Anthem Blue Cross Blue Shield, Aetna Inc., Cigna Corp., Health Care Service Corp., Humana Inc. and UnitedHealth Group Inc. The claims originated from more than 200 physician practices in 43 states, covering 76 medical specialties.

The AMA said an effort to make claims processing 100 percent accurate would save $15.5 billion -- savings that would come largely come from lower administrative costs. The doctor’s group said $777.6 million could be saved annually if health insurers improved claims processing by just 1%.

"Creating a single transparent set of processing and payment rules for the health insurance industry would create system-wide savings, and allow physicians to direct time and resources to patient care and away from excessive paperwork,” AMA Immediate Past President Nancy H. Nielsen, MD, said in a statement. She added that the lack of standardization in insurance plan rules is to blame for much of the confusion.

The U.S. healthcare system spends an estimated $210 billion annually on claims processing, according to the AMA. The doctor’s group cited a recent study that estimated physicians spend the equivalent of five weeks each year on claims processing, and divert as much as 14 percent of their revenue to ensure accurate payments from insurers.

A 2009 survey by America’s Health Insurance Plans, Center for Policy and Research showed that 74 percent of “clean” claims — those that don’t require additional information – are processed within seven days. That’s up from 68 percent in 2006. Electronic claims were more likely to be swiftly processed – nearly a third of claims that took more than 60 days to process were paper claims, compared to just 8 percent of electronic claims, according to the survey.

Doctors Say Insurer, Government Payments Harder to Get

Physicians say getting claims paid by insurers, and the government, has become increasingly difficult, according to a recent survey conducted by Athenahealth, a medical billing and practice management firm. More than nine out of 10 doctors surveyed thought that getting reimbursement from private insurance companies was becoming more difficult and more complex. Although the negative attitudes about Medicare and Medicaid payments were not quite as strong, more than 80% thought that getting money out of these government programs was getting harder.

About 84% of the doctors said that the costs linked to abiding by the payment rules and regulations that third-party payers impose on them has had a serious impact on their practice income, and 77% felt that time spent on third-party payer issues took away from the time they could spend with patients.

Three-quarters of the doctors also felt that payer restrictions inhibited the care they would like to provide to their patients and two-thirds said that basing their clinical decisions on what payers will cover instead of what is best for the patient is becoming more common.

As for electronic medical records systems, most of the doctors felt that EMRs would increase efficiency and might offer some financial benefit down the road, but the vast majority, about 90%, also thought that they were expensive to purchase, install, and implement, while 81% thought they would be costly to maintain.

Despite the movement toward healthcare reform, the doctors felt that the future didn’t look all that rosy either. Only 18% thought the quality of medical care would improve over the next five years and only 22% were optimistic that doctors would be able to practice independently or in small groups in the future. About 54% disagreed with the idea that more government involvement would lower costs or improve outcomes.