In an all-too-rare bit of good news from the realm of provider reimbursements, commercial health insurers posted a significant reduction in bungled medical claims in 2012, says the American Medical Association.
Only 9.5% of claims were improperly denied or paid physicians the wrong amount. That compares to 19.3% in 2011, the physicians organization says.
The AMA says the improvement helped physicians reduce unnecessary administrative work to reconcile mistakes, which saved the health system a whopping $8 billion.
"Paying medical claims accurately the first time is good business practice for insurance companies that saves precious healthcare dollars and frees physicians from needless administrative tasks that take time away from patient care," AMA board chair Robert M. Wah, M.D., said in a press statement.
On the health plan side it looks like the improvement can be attributed to a couple of things. Robert Zirkelbach, the spokesperson for American's Health Insurance Plans noted in an e-mail exchange that streamlining healthcare administration to reduce paperwork and improve efficiency is a priority for health plans. Collaborating with providers and investing in new technologies to improve the claims submission process have also produced results.
The 2012 National Insurer Report Card, which was released on Monday during the AMA's annual meeting in Chicago, looks at the timeliness and accuracy of claims processing for Medicare and seven of the largest health insurers: Aetna, Anthem Blue Cross, CIGNA, Humana, Regence (Blue Cross Blue Shield-affiliated healthcare plans in Idaho, Oregon, Utah, and Washington), UnitedHealthcare, and Health Care Service Corp. (parent of Blues plans in Illinois, New Mexico, Oklahoma and Texas).
While there was across-the-board improvement in claims accuracy, most of the improvement was recorded by Anthem, which processed 88.6% of its claims accurately. That's up from 61% in 2011. For the second year in a row UnitedHealthcare scored the highest accuracy rating?98%? up from 90% in 2011. Humana rounded out the list with an accuracy rating of 87.4%.
The study analyzed a random sample of 1.1 million electronic claims for about 1.9 million medical services submitted in February and March of 2012. The claims were collected from 380 physician practices in 79 medical specialties in 39 states.
Other key findings:
Denials are on the rise. Medical claim denials are on the rise after recording a downward trend for several years. Only Humana managed a slight reduction in denials. Anthem posted the highest denial rate at 5.1%, while Regence had the lowest denial rate, at 1.4%. A lack of coverage under a patient's benefit plan continues to be the most frequent reason for a denial.
Prior authorization is required more frequently. Only Anthem and Medicare reported a drop in prior authorizations. Regence's request rate is less than 1%, while Humana has a request rate of almost 14%.
Claims are being processed faster. HCSC and Humana had the fastest median response time?six days. Aetna and Medicare had the slowest with a median response time of 14 days.
Transparency has increased. Health insurers increased the transparency of rules used to edit medical claims by 33% from 2008 to 2012. According to the AMA, reducing the use of undisclosed proprietary edits reduces the administrative costs of reconciling medical claims.
I expected that there would be high fives all around between physicians and health plans to celebrate the report's good news, but both sides were quick to point out some shortcomings. For its part, the AMA estimated that an additional $7 billion could be saved if insurers consistently paid claims correctly.
AHIP's Zirkelbach noted that "more work needs to be done to reduce the number of claims submitted to health plans that are duplicative, inaccurate, or delayed."
The annual report card is part of the AMA's "Heal the Claims Process" campaign, which was launched in June 2008 with the goal of reducing the cost of submitting claims for the physician practice from as much as 14% of physician practice revenue to just 1%.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
