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Patients Shoulder Nearly 25% of Medical Bills

John Commins, for HealthLeaders Media, June 18, 2013

Also new this year, the AMA unveiled its Administrative Burden Index [PDF], which ranks commercial plans according to the unnecessary cost they add to the billing and payment of medical claims. The AMA said that red tape associated with avoidable errors, inefficiency and waste in the medical claims process resulted in an average ABI cost per claim of $2.36 for physicians and insurers.  

Cigna had the best ABI cost per claim of $1.25, or 47% below the commercial insurer average. Health Care Services Corporation had the worst ABI cost per claim of $3.32, or 41% above the commercial insurer average. McAneny says the ABI is a simple and accurate way to show physicians the cost of administrative burdens.

"We are trying with this report to quantify this so that when a physician practice looks at options for contracts with payers, they will know early into the process that they may be bargaining for $100 but it is going to cost me $14 to pay for that so what I am really asking for is $86," McAneny says.  

"Physicians are going to have to use tools like this and a lot of other tools the AMA provides because if you are not an efficient physician practice in this market you are going to have a hard time surviving. And we need every physician we possibly have in this country to be able to continue with their practice of medicine and continue taking care of patients, especially as we have all of these new patients who are on insurance plans either through Medicaid expansion or from the exchange-based plans."  

The AMA estimates that $12 billion a year could be saved if insurers eliminated unnecessary administrative tasks with automated systems for processing and paying medical claims. This savings represents 21% of total administrative costs that physicians spend to ensure accurate payments from insurers.

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