News: AMA gives insurers poor grades on claims handling

September 1, 2008

According to an insurer "report card" released by the AMA, insurers' claim payments are often late and inaccurate.

According to an insurer "report card" released by the American Medical Association (AMA) at its annual meeting in June, insurers' claims payments are often late and inaccurate, explanations for denials are inconsistent, and payment rules are sometimes impossible to understand, American Medical News (7/7/08) reported. The AMA's National Health Insurer Report Card was based on data culled from 5 million claims billed electronically to Medicare and seven commercial health plans: Aetna, Anthem Blue Cross/Blue Shield, Cigna, Coventry Health Care, Health Net, Humana, and United Healthcare. The report card addressed payment timeliness, transparency of fees and payment policies, contracted payment rate adherence, compliance with generally accepted pricing rules, and denials (payer allows the physician's billed charge, but payment is $0).

Though no commercial plan failed in every aspect of its claims payment, only Medicare did consistently well in every area. In one key measure-how often a plan's forms and records showed the contracted or "allowed" rate correctly-for example, Medicare's adherence rate to contracted rates was 98.1%, compared with 61.5% for United Healthcare, the insurer with the lowest adherence rate. When health insurers report an amount that does not adhere to the contracted rate, the physician practice must pay out additional unnecessary costs to evaluate the inconsistency.

Because of its findings, the AMA has launched a "Heal the Claims Process" campaign to fix a claims-payment system that physicians say requires them to spend much time and their own money to get paid what insurance companies owe them. The campaign addresses four main principles: Physicians should submit claims quickly and accurately the first time; health plans should pay in a timely manner and at the contracted rate; plans should post their fee schedules, proprietary edits, payment policies, and other payment information on their Web sites; and plans should standardize the language and reasons for claim denials to reduce ambiguity in the pay process. The AMA estimates that these actions will reduce physicians' claim submission costs from the current 14% of collections to 1%. For more information on the Heal the Claims Process campaign and tools for preparing claims, visit the AMA Practice Management Center Web site at http://www.ama-assn.org/go/pmc/.