Nearly 20% medical claims processed inaccurately says the AMA annual report

By Dr. Ananya Mandal, MDJun 21 2011

According to a statement from the American Medical Association (AMA), health insurance companies are inaccurately processing nearly one in five medical claims, slowing payments to doctors and adding bureaucratic headaches to patients.

The AMA released its annual report card on the health insurance industry during its annual House of Delegates meeting in Chcago. It said commercial health insurance companies have an error rate of 19.3 percent, up 2 percentage points from last year's report. Improving claims processing could save patients money and improve medical care by reducing hassles physicians have when they are forced to haggle with health plans over payments or other issues. The AMA said the report is designed to hold insurance companies accountable.

Dr. Barbara McAneny, an AMA board member and medical oncologist from New Mexico said, “A 20 percent error rate among health insurers represents an intolerable level of inefficiency that wastes $17 billion annually…Health insurers must put more effort into paying claims correctly the first time to save precious health care dollars and reduce unnecessary administrative tasks that take time and resources away from patient care.”

For the report the AMA measured timeliness and accuracy of claims processing of the nation's seven largest health insurers, including Aetna Inc.; Humana Inc.; UnitedHealth Group; and Chicago-based Health Care Service Corp., parent of Blue Cross and Blue Shield of Illinois and Blues plans in Oklahoma, Texas and New Mexico. The AMA report's findings are based on a random sample of about 2.4 million electronic claims for about 4 million medical services submitted in February and March.

Results showed that UnitedHealth had the best rating at 90.23 percent followed by Regence Group Blue Cross Blue Shield at 88.41 percent and then Health Care Service at Service at 87.04 percent. Anthem Blue Cross Blue Shield was last among the nation's largest insurers with a 61.05 percent accuracy rating, the AMA said.

Doctors received no payment for 23% of claims submitted, either because the claim was denied or deferred to patients. Response time varied from a median of six to 15 days. CIGNA and Humana cut their median claims response time in half during the past four years.

For its part, the insurance industry said health plans continue to reduce costs and improve efficiencies. Health Care Service spokesman Ross Blackstone said, “Each year, (Health Care Service Corp.'s) Blue Cross and Blue Shield plans go through dozens of comprehensive, independent, third-party audits of the accuracy and timeliness of our claims administration…These audits show that we process claims accurately more than 99 percent of the time. The quality and effectiveness of claims processing is an ongoing priority.”

“Government data also show that the portion of health insurance premiums going to health plans' administrative costs has declined for six straight years,” said Robert Zirkelbach, a spokesman for America's Health Insurance Plans, which represents the nation's health insurance industry.

After more than an hour of civil debate Monday, AMA delegates voted to reaffirm existing policy that says individuals have a responsibility to be insured. About two-thirds of almost 500 delegates voted to support the AMA's policy.