American Medical Association Gives Health Insurers Bad Grades

Posted by health4all

Posted: June 18, 2008 - 7:22 pm

The American Medical Association has a "Campaign to Cure the Claims Process." Here is the problem, as they see it:

"You deserve and should demand timely and accurate payment. Yet physician practices are spending as much as 14 percent of their total collections to ensure accurate payment for their services. Even when you submit correctly coded health care claims, health insurers and other third-party payers may still inappropriately delay, deny or significantly reduce payments."

Yes, once again it is those darned health insurance companies causing problems. But wait, there's more! The AMA has evaluated a number of the major health insurance dcompanies in the nation, and given them grades. Some are quite naughty. Here is the summary of the findings...

...

The AMA's new National Health Insurer Report Card provides physicians and the public with an objective and reliable source of information on the timeliness, transparency and accuracy of claims processing by health insurance companies. Based on a random-sample pulled from more than 5 million electronically billed services, the report card provides an in-depth look at 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.

Key findings include:

• Denials. There is wide variation in how often health insurers pay nothing in response to a physician claim (from less than 3 percent to nearly 7 percent), and in how they explain the reason for the denial. There was no consistency in the application of codes used to explain the denials, making it extremely expensive for physician practices to determine how to respond.
• Contracted payment rate adherence. Health insurers reported to physicians the correct contracted payment rate only 62 to 87 percent of the time. Additional analysis will be necessary to determine how often these errors were tied to inaccurate payment. When health insurers report an amount that does not adhere to the contracted rate, it adds additional, unnecessary costs to the physician practice to evaluate the inconsistency.
• Transparency of fees and payment policies. More than half of the health insurers do not provide physicians with the transparency necessary for an efficient claims processing system.
• Compliance with generally accepted pricing rules. There is extremely wide variation among payers as to how often they apply computer generated edits [I believe this word is supposed to be "audits"] to reduce payments (from a low of less than .5 percent to a high of over 9 percent). Payers also varied on how often they use proprietary rather than public edits to reduce payments (ranging from zero to as high as nearly 72 percent). The use of undisclosed proprietary edits inhibits the flow of transparent information to physicians, adding additional administrative costs to reconcile claims.
• Payment timeliness. Prompt pay laws appear to have been effective in ensuring a relatively quick response to physician's electronic claim. Further analysis will be necessary to determine the extent to which this response is accompanied by accurate payment if the claim.

...

Physicians have whole offices full of staff to figure out the mysteries of the health insurance claims fiasco and, as you can see, they are still having very significant problems with the system. Of course, you and I don't have teams of clerks to help us with our forms. I don't think a tweek here and a minor innovation there is really going to solve this problem. I think we need to start over.

[Source: AMA Press Release]

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