CHICAGO – A sampling of claims payments from some of the nation’s top insurers shows that although they are paying much more quickly, some 23% of claims were denied and almost a fifth were paid incorrectly.
The study was conducted for the American Medical Association and issued June 20 at the organization’s annual House of Delegates meeting.
The 2011 National Health Insurer Report Card showed that the error rate of 19.3% represented an extra $3.6 million in erroneous claims, a 2% 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 annual meeting of the AMA’s House of Delegates.
She said that 10%-14% 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% 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.
UnitedHealthcare was the only insurer that improved its claims-processing accuracy from 2010, paying 90% of claims in an accurate manner. Anthem, on the other hand, paid only 61% of claims accurately.
The outright denial rate (in which no payment is made) ranged from a low of 17% of claims at Regence to 25% 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%) of claims requiring prior authorization; Regence had the lowest (0.04%).
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% 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.