The AMA announced this week a new National Health Insurer Report Card on the timeliness, transparency, and accuracy of claims processing by health insurance companies.
This material originally appeared in the June 20, 2008, issue of Health LawyersWeekly, a publication of the AmericanHealth Lawyers Association.
The American Medical Association (AMA) announced this week a new National Health Insurer Report Card on the timeliness, transparency, and accuracy of claims processing by health insurance companies, according to the group’s June 16 press release.
The “report card” is based on a random sample pulled from over 5 million electronically billed services and is intended to help evaluate the claims processing performance of Medicare and seven national commercial health insurers-Aetna, Anthem Blue Cross Blue Shield, CIGNA, Coventry Health Care, Health Net, Humana, and United Healthcare.
AMA said physicians spend as much as 14% of their total collections to obtain accurate and timely payment for their services and inefficiencies in the claims processing systems adds as much as $210 billion to annual healthcare costs.
The report card evaluates the insurers against 14 metrics grouped in the following categories: payment timeliness, accuracy, transparency of contracted fees and payment polices on payer websites, compliance with generally accepted pricing rules, and denials.
The report card initiative is part of the AMA’s “Cure for Claims” campaign “to help heal the ailing system of processing medical claims with health insurers,” the group said.
According to the AMA, “the report card demonstrates the inconsistency and confusion that results from each health insurer using different rules for processing and paying medical claims. This variability requires physicians to maintain a costly claims management system for each health insurer.”
Among other things, the AMA reported wide variation in denials with little consistency in the codes used to explain them.
AMA also found health insurers reported to physicians the correct contracted payment rate only 62% to 87% of the time. AMA said additional analysis would be needed to determine how often these errors were tied to inaccurate payment.
AMA cited further problems regarding transparency and compliance with pricing rules. The AMA did indicate that “prompt pay laws appear to have been effective in ensuring a relatively quick response to a physician’s electronic claim,” although it cautioned further analysis was needed to evaluate payment accuracy.
In a statement responding to the new AMA report card, America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni said: “Our view is that discussions of efficiency are important, but that they should be broad discussions of opportunities for improvement by all the responsible stakeholders.”
Ignagni pointed to recent data from PricewaterhouseCoopers indicating administrative costs have been stable for four decades and that, as a result of the move to electronic processing, the cost for each claim has actually declined.
“AHIP data indicate that virtually all ‘clean’ claims are processed within 30 days. AHIP members have worked collaboratively with physicians to make improvements in processes to promote efficiency and move to real-time payment." In order for claims to be processed as efficiency and promptly as possible, both insurers and physicians need to strive for accuracy and timeliness, she said.