How Well Are Insurers Paying You? And What Are You Doing To Improve It?

June 29th, 2010 by Joann Doan

AMA 2010 National Health Insurer Report Card

AMA 2010 National Health Insurer Report Card

The American Medical Association (AMA) released its 2010 National Health Insurer Report Card this month, and as in previous years, it is eye-opening for those who rely on insurance payments for their livelihood. The AMA found that one in five medical claims are processed inaccurately by health insurers, according to their third annual check-up of the nation’s commercial health insurers and the systems they use to manage and pay claims. This was the key finding of the 2010 National Health Insurer Report Card, which for the first time benchmarked the overall claims processing accuracy of the nation’s largest health insurers.

According to the AMA’s findings, the health insurance industry as a whole has about an 80 percent accuracy rate for processing and paying claims. Coventry Health Care Inc. came out on top of the seven commercial health insurers measured by the AMA with a national accuracy rating of 88.41 percent. Anthem Blue Cross Blue Shield rounded out the list with a national accuracy rating of 73.98 percent.

The AMA estimates that $777.6 million in unnecessary administrative cost could be saved if the health insurance industry improves claims processing accuracy by one percent. Currently, the health care system spends as much as $210 billion annually on claims processing. One recent study estimated physicians spend the equivalent of five weeks annually on health insurer red tape. To keep up with the administrative tasks required by health plans, physicians divert as much as 14 percent of their revenue to ensure accurate payments from insurers.

The AMA’s National Health Insurer Report Card provides a useful snapshot of how each of the nation’s seven largest commercial health insurers perform. The systems health insurers use to process and pay claims were measured according to:

•  Accuracy. In addition to measuring overall claims processing accuracy, the report card examined how accurately insurers reported the correct contract fees to physicians. Commercial health insurers made large improvements during the last three years. Contracted fees were correctly reported 78 to 94 percent of the time in 2010, compared with 62 to 87 percent of the time in 2008. UnitedHealth showed the largest improvement in reporting correct contract fees, while Health Care Service Corporation scored the highest. The performance of insurers varied significantly by state, ranging from 58.6 to 96.9 percent.

•  Denials. The inconsistency found among health insurers in 2008 continued to be demonstrated in 2010. There is wide variation in the frequency of denials by insurers, ranging between .7 to 4.5 percent. Lack of eligibility continues to be the most common reason for claim denials, signaling the need for employers and insurers to help educate patients about the limits of their insurance coverage. Physicians can help reduce denials by ensuring all claims are complete and accurate.

•  Timeliness. The report card found that insurers’ response time to a claim varied from five to 13 median days. Except CIGNA, all the insurers measured last year showed slight increases in the number of days needed to respond to a claim.

Since denied, rejected, resubmitted and underpaid claims can cost you as much as $100,000 per month according to the AMA, every effort you can make to reduce denials, rejections and delays will mean money to your bottom line. In the coming months, we will continue to provide you with methods for doing this, both with Kareo medical billing software and without, in this blog. Among the ideas you’ll find in previous posts are:

•  How to Use Real Time Eligibility Verification Effectively
•  6 Ways to Accelerate Collections
•  Catching Unbilled Revenue with Kareo

If you have suggestions or ideas, please feel free to share them in the Comments section, or email them to marketing@kareo.com

 

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