The American Medical Association (AMA) has discovered significant errors in payments of insurance claims according to their latest National Health Insurer Report Card which was  release yearly. In their report, the AMA estimated health insurance carriers pay 20 percent more –about $17 billion –in claims as a result of errors. 2011 has seen the error rate shoot up by 2 percent compared to the previous year. This translates to an extra $3.6 million lost, as well as a further $1.5 billion used to finance the health system. An official from AMA, urged health insurance carriers to be more thorough with the when it comes to paying claims as this would save untold millions and significantly reduce administration related expenses.

The AMA says a majority of health insurance Companies did not show any improvement in accuracy except for the Health Care Giant; United Healthcare.  It appears United Healthcare was the only firm to show any major improvement. In fact; United Healthcare was the best performer, scoring 90.23 percent in the accuracy rating. At the far end of the spectrum was Anthem Blue Cross Blue Shield.  Anthem Blue Cross Blue Shield which scored an accuracy rating of 61.05 percent. Other insurance carriers who took part in the survey rating included the Regence Group, CIGNA, Health Care Service Corporation, Medicare and Humana.  The AMA monitors all  the national health insurance providers yearly and benchmarks their claims processing systems to improve efficiency in processing claims payments.  They highlighted the following major findings in their report:

Various health insurance providers responded to claims within a range of between six and 15 days. Two providers: Humana and CIGNA, were noted to have reduced their average claim response time by half.

Health physicians lose out on approximately 23 percent of claims filed. Health insurers may reject payment of claims from physicians for various reasons. They may refer some claims to the patients or edit others. The report which covered the months of February and March noted that majority of the non-paid claims were passed on to the patients because of the deductable requirements until they exceed dollar limits.

A number of providers registered a decrease in claim denials. CIGNA remained the top provider with lower denial rates of less than one percent. The rest of the health insurance providers also registered a reduction in denial rates with United Healthcare reducing its denial rate to 1.05%. Most denial cases arose from ineligibility of patients.

The report for the first time included the accuracy of contract fee reports to physicians by the health insurance providers besides the correctness of overall processing of claims. UnitedHealthcare appeared to have consistently improved in capturing contract fees accurately for the fourth year running. The rest of health insurance providers, with the exception of Anthem Blue Cross Blue Shield, registered minor declines.

Lastly, the AMA report highlighted CIGNA as leading in claims which required administrative approvals by physicians before offering medical services to patients. AMA had earlier indicated that these approvals caused unnecessary delays in administration of medical services to patients and negatively impacted on the general efficiency.

–Mike

Michael E. Dortch
President &  Managing Agent
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