AMA Aims to Cure What Ails Claims Process |
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Written by U. S. Insurance News
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Monday, 23 June 2008 |
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The American Medical Association (AMA) thinks the medical claims process system is sick.
And true to its nature, the AMA wants to cure it.
That’s why the association has begun the Cure for Claims campaign. AMA board member William A. Dolan, M.D, said the goal of the campaign is to hold health insurance companies accountable for making claims processing more cost-effective and transparent, and to educate physicians so they are no longer at the mercy of a payment system that detracts from patient care.
The AMA believes the system of processing medical claims adds unnecessary cost to the health care system, estimated as much as $210 billion annually, without creating any value for patients.
“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,” Dr. Dolan said. “To diagnose the areas of greatest concern within the claims processing system, the AMA has developed its first online rating of health insurers.”
To coincide with the launch of Cure for Claims, the AMA has released its first National Health Insurer Report Card on claims processing. The report provides physicians and the public with 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.
Highlights of the first report card include the following:
- 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 determine how to respond.
- Health insurers reported to physicians the correct contracted payment rate only 62–87 percent of the time. Additional analysis will be necessary to determine how often these errors were tied to inaccurate payment.
- More than half of the health insurers do not provide physicians with the transparency necessary for an efficient claims processing system.
- There is 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 0 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.
- Prompt pay laws appear to have been effective in ensuring a relatively quick response to physician’s electronic claims. Further analysis will be necessary to determine the extent to which this response is accompanied by accurate payment of the claim.
“Physicians want to focus on caring for their patients, not fighting health insurance red tape that may delay, deny, or shortchange payments for their services,” said Dr. Dolan. “The report card provides a useful snapshot of how each of the nation’s biggest health insurers can improve the process they use to pay their bills.”
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