CHICAGO – In an effort to boost transparency, the American Medical Association has released an insurer report card that lays bare the differences among seven national health insurers when it comes to processing physicians’ claims.
The report card is part of the AMA’s Cure for Claims campaign to “reduce the cost of claims administration to 1 percent of collections.”
According to the AMA, “billions of dollars in administrative waste would be eliminated each year if third party-payers sent a timely, accurate and specific response to each physician claim.”
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said efforts to reduce waste in America’s healthcare system should be focused first on the drivers for healthcare costs – and he doesn’t see that as focusing on administration.
According to a 2006 PricewaterhouseCoopers study that was prepared for AHIP, “Costs associated with government payments, regulation and other costs associated with administration (e.g., claims administration) comprise an estimated 6 cents” of the premium dollar that goes toward health insurance.
The AMA says that adds unnecessary costs to the healthcare system, estimated as much as $210 billion annually.
AMA Board Member William A. Dolan, MD, said the campaign’s goal is “to hold health insurance companies accountable for making claims processing more cost-effective and transparent, and to educate and empower physicians so they are no longer at the mercy of a chaotic payment system that takes countless hours away from patient care.”
“The data shows we are doing a good job of holding down costs,” said Zirkelbach. According to an AHIP a report from May 2006, “electronic submission of health insurance claims more than tripled in the last decade, reducing administrative costs and allowing 98 percent of claims to be processed within 30 days of receipt.”
The report card was based on a random sample pulled from more than 5 million electronically billed services and provides claims processing information from Medicare, Aetna, Anthem Blue Cross Blue Shield, CIGNA, Coventry Health Care, Health Net, Humana and United Healthcare.
The report card is putting the insurance companies “on notice,” said Dolan. Those same companies will be re-evaluated in November, he said, to see how they have improved their claims processes.
According to the report card, there is wide variation in how often health insurers pay nothing in response to a physician claim and in the explanation of the denial. Contracted payment rate adherence is also inconsistent, with insurance companies reporting the correct rate to physicians only 62 percent to 87 percent of the time.
Zirkelbach said AHIP is not dismissing provider concerns.
“We are launching a pilot project that will provide a uniform Web-based tool where providers can interface with numerous health plans on administrative transactions such as benefit eligibility and claims processing,” he said.
According to the report, more than half of all health insurers don’t provide physicians with the transparency they need for an efficient claims processing system.
The report also notes a wide variation among payers when it comes to how often they apply computer-generated edits to reduce payments and how often they use proprietary rather than public edits.
AHIP CEO Karen Ignagni, in a response issued about the AMA report card, said, “In order for claims to be processed as efficiency and promptly as possible, both insurers and physicians need to strive for accuracy and timeliness. For example, data show there is often a significant lag time between when services are provided and physician claims are submitted. Data also indicate that there are a significant number of incomplete and duplicate claims filed.”