Insurers Pay Promptly, But Error Rate Is High
By Alicia Ault
Elsevier Global Medical News
A sampling of claims payments from some of the nation’s top insurers shows that although they are paying much more quickly, some 23 percent of claims were denied and almost a fifth were paid incorrectly. The study was conducted for the American Medical Association and issued at the annual meeting of the AMA’s House of Delegates in Chicago.
The 2011 National Health Insurer Report Card showed that the error rate of 19.3 percent represented an extra $3.6 million in erroneous claims, a 2 percent increase from the previous year.
The AMA estimated that these faulty payouts and the hassles associated with them added $1.5 billion in administrative costs to the health care system.
“This report card conveys that the current state of the health care claims process is untenable,” AMA board member Dr. Barbara L. McAneny said at the meeting. She said that 10-14 percent of a physician’s revenue goes to dealing with administrative issues. The AMA is working with insurers and physicians to get that down to 1 percent of revenue.
The report card tracked a number of performance measures at Medicare and seven private insurers: Aetna, Anthem Blue Cross/Blue Shield, Cigna, Health Care Services Corp., Humana, Regence, and UnitedHealthcare. Of those, UnitedHealthcare (UHC) was the only insurer that improved its claims-processing accuracy from 2010, paying 90 percent of claims in an accurate manner. Anthem, on the other hand, paid only 61 percent of claims accurately.
The outright denial rate (in which no payment is made) ranged from a low of 17 percent of claims at Regence to 25 percent at Anthem and Cigna.
Prior authorization is a growing problem for physicians and constitutes one of the top eight reasons for denial of claims, according to Mark Rieger, CEO of National Healthcare Exchange Services, the company that conducted the analysis for the AMA.
Coping with prior authorization is the second-largest administrative task for physicians, consuming at least 20 hours a week of physician and staff time, he said at the meeting. Cigna had highest rate (6 percent) of claims requiring prior authorization; Regence had the lowest (0.04 percent).
There were some bright spots in the report. The vast majority of claims are now being paid within the first 15 days, with the remainder coming largely within 16-30 days of submission. Humana and Medicare were the fastest, paying some 95 percent of claims within 15 days. Cigna and Health Care Services Corp. were close behind.
The data were compiled by National Healthcare Exchange Services. The company analyzed claims submitted between Feb. 1 and March 31, 2011. Claims came from 42 states, and included 4 million services billed on 2.4 million claims made by 400 practices covering 80 specialties.
Online June 29, 2011