To reduce the burden of ensuring accurate insurance payments for physician services, the American Medical Association has unveiled its first National Health Insurer Report Card on claims processing.
The AMA made the announcement while kicking off its "Cure for Claims" campaign, designed to speed the processing of medical claims with health insurers by "reducing the cost of claims administration to 1 percent of collections."
The 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.
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."
"The goal of the AMA campaign 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 take countless hours away from patient care," said AMA Board Member William A. Dolan, MD.
The report card was based on a random sample pulled from more than 5 million electronically billed services and 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.
"Eliminating the inefficiencies of the billing and collection process would produce significant savings that could be better used to enhance patient care and help reduce overall health care costs," said Dolan. "To diagnose the areas of greatest concern within the claims processing system, the AMA has developed its first online rating of health insurers."
Key findings of the National Health Insurer Report Card 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 expensive for physician practices to fashion a response.
- Contracted payment rate adherence - Health insurers reported the correct contracted payment rate to physicians between 62 percent and 87 percent. 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 a wide variation among payers as to how often they apply computer-generated edits to reduce payments (from a low of less than .5 percent to a high of more than 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 a 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.
To help physicians submit timely and accurate claims, the AMA has created the Practice Management Center, an online resource offering physicians and their staff members tools for preparing claims, following their progress and appealing them when necessary.
Do you think that the AMA's campaign goals are achievable? E-mail Associate Editor Molly Merrill at molly.merrill@medtechpublishing.com.