AMA Reports on Health Insurers’ Claims Accuracy

Results from a recent survey found that the 7 largest health insurers in the United States significantly reduced their claim denial rates and improved their transparency and accuracy of contracted rates. However, they had an average claims processing accuracy rate of 80.7%, down from 82.7% last year. The decrease led to an estimated $1.5 billion in unnecessary administrative costs, according to the American Medical Association (AMA). The fourth annual AMA National Health Insurer Report Card gathered data from Aetna, Anthem Blue Cross and Blue Shield, CIGNA, Health Care Service Corporation (HCSC), Humana, the Regence Group, and UnitedHealthcare. UnitedHealthcare had the highest accuracy rating (90.23%), an increase from 85.99% last year. Meanwhile, Anthem Blue Cross and Blue Shield had the lowest accuracy rating (61.05%) compared with 73.98% last year. The rates for Aetna (81.08%), CIGNA (83.02%), HCSC (87.04%), and Humana (81.99%) were all within 1.5% of last year’s percentages. This is the first year the Regence Group participated in the survey, which is the cornerstone of the AMA’s “Heal the Claims Process” campaign that began in 2008. The AMA’s goal is to reduce the cost of submitting claims to 1% of revenue from the current cost of between 10% and 14%. The organization estimates a 1% improvement in claims accuracy would save >$777 million per year in unnecessary administrative costs, whereas increasing accuracy to 100% would save $17 billion annually. Barbara L. McAneny, MD, a member of the AMA’s board of trustees since June 2010, said that physicians spend an average of 3 weeks per year dealing with insurers on administrative tasks, while providers spend 20.7 hours per week on prior authorization. “Physicians have to spend a huge amount of time to get the payments that they’ve rightfully earned and are contractually obligated to,” Dr. McAneny, an oncologist/hematologist in Albuquerque, New Mexico, said in an interview with First Report Managed Care. “It should be as easy as swiping your ATM card. The fact we spend a huge amount of our resources on moving the money around means we aren’t spending that time on helping patients. If doctors weren’t spending their time arguing about pay with health insurers, they could help improve care and lower costs.” The report card collected data from National Healthcare Exchange Services (NHXS), a healthcare information technology services company based in Sacramento, California. It included approximately 3.98 million services billed on 2.4 million claims from February 1, 2011, through March 31, 2011. The information came from 42 states, 80 specialties, and >16,000 physicians in >400 practices, according to the AMA report. When establishing the report card, the AMA worked with 2 men with decades of experience in the healthcare analysis field: Mark Rieger, the chief executive officer of NHXS, and Frank Cohen, the principal of Frank Cohen Group, LLC, a consulting and research firm. They developed 17 measurements broken into 7 areas: payment timeliness, cash flow, accuracy, administrative requirements of prior authorization, code edit sources and frequency, denials, and improvement of claim cycle workflow. NHXS maintains the data for the first 6 areas, while the insurers self-report the latter. Among the results from this year’s report, each insurer had a median claims response time of ≤15 days, with HCSC and Humana tied for the fastest response at 6 days apiece. In terms of how often the insurers’ stated allowed amount matched the contracted fee schedule rate to physicians, UnitedHealthcare had the highest accuracy (92.26%) and was the only company to improve from last year. Anthem Blue Cross and Blue Shield had a 62.08% accuracy rate, a sharp decline from 77.77% last year. “While the trend with UnitedHealthcare is very encouraging, it is clear the commercial payers still have significant room for improvement on payment accuracy,” Mr. Rieger said in a webcast posted on the AMA’s Web site (https://www.ama-assn.org). “Payment accuracy is a low-hanging fruit for significant savings in the claims process."