AMA meeting: 20% of claims not processed right

Posted June 14, 2010 at 8:58 a.m.

By Bruce Japsen | One in five medical claims is processed inaccurately by some of the nation’s health insurers, the American Medical Association said in a report this morning.

The report, released during the AMA’s annual meeting in Chicago, said such claims processing errors cost the health care system billions of dollars. They also slow payments to physicians and often confuse consumers.

The AMA’s report 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.

The AMA’s findings show the health insurance industry has about an 80 percent “accuracy rate for processing and paying claims.” Coventry Health Care Inc. had the best rating at 88.41 percent followed by Health Care Service at 87.83 percent. Anthem Blue Cross Blue Shield was last among the nation’s largest insurers with a 73.98 percent accuracy rating.

“The finding that one in five medical claims are processed by insurers with errors emphasizes the huge potential for reducing administrative costs for physicians and insurers,” said Dr. Nancy Nielsen, the AMA’s immediate past president. “Creating a single transparent set of processing and payment rules for the health insurance industry would create systemwide savings and allow physicians to direct time and resources to patient care and away from excessive paperwork.”

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  1. Anne June 14, 2010 at 11:00 a.m.

    It is probably the boxes marked “Legal” and “Illegal” that are missing.

  2. Tom June 14, 2010 at 11:28 a.m.

    It probably has something to do with most Doctors not investing in new technology EHR, PHR, any type of records. It is odd the Medical industry is the only industry that is the last to adopt electronic information for accuracy purposes.
    But then again its the only industry where you find out what you are paying for after everything has been done.

  3. rwilymz June 14, 2010 at 11:41 a.m.

    Are these the health insurance companies that are going to be implementing Obamacare? The savior of us all?
    I can’t wait; can you?

  4. JIM June 14, 2010 at 11:42 a.m.

    I’ve noticed with my own claims on-going errors all the time. I’m cynical and convinced it’s an intentional practice to reduce expenses and increase cost to the consumer.

  5. hbs June 14, 2010 at 11:43 a.m.

    It must be tough when less than 20% of all practicing physicians are members of a dying organization…..

  6. Rachel June 14, 2010 at 11:45 a.m.

    I pay for my own health insurance because my employer does not provide me with any, and let me tell you, the past three years of working with no benefits has been a complete nightmare. I’m not even sick, but any little hiccup ends up costing me TONS of money. I get bills for appointments I had eight months prior with no warning that I would be charged for any of the labs, treatments or procedures I recieved at the appointment. They like to use tricky language too, those insurers. For example, my prior company (which I have since “fired”) said that I had a six month waiting period before I could do any “preventative medicine” doctors’ appointments. When I went to the gyno for my annual check-up, it hadn’t yet been six months, so I had to foot the $425 bill. I was unaware that the gyno is considered preventative medicine. I also eneded up spending an additional. In the end, I ended up paying some $8,000 (which includes what I was paying per month for my PPO) in medical expenses last year when they only would have cost me around $3,000 had I gone without insurance!
    I felt like I had been robbed and duped. I hope my new carrier isn’t as bad. I haven’t had to use it yet, so we’ll see…fingers crossed.

  7. Gary,Waukegan June 14, 2010 at 11:46 a.m.

    Oh,so this is the reason our health care costs are so high.Now that the government is taking it over,this problem will go away and we will cut billions in waste.
    Yeah right.Mark my words,if it is 20% now under private insurers,it will be 50% under some government stooge paper pushers.Once government gets their grip on these claims,do you honestly see this 20% number going down?Didn’t think so.

  8. David June 14, 2010 at 11:56 a.m.

    I don’t want no government having control over my healthcare. Which way to the Medicare line?

  9. hello June 14, 2010 at 11:58 a.m.

    I would guess it is system implemented by the insurers to error on the side of not paying.

  10. ange1 June 14, 2010 at 12:00 pm

    Won’t help you when docs stop taking Medicare…which is what will happen if congress continues to implement SGR which effectively cuts provider reimbursement by 21%. It will be cash only at that point.

  11. Bob Claims June 14, 2010 at 12:22 pm

    Having worked in the health insurance industry for many years, I can honestly say that many, many times, the problem begins with the health care providers “billing service” company and the way they submit the claims. Also, many health care providers have learned how to “beat the system” by slightly altering the diagnosis or procedures to gain payments they are not entitled to at all! Having had some medical care for myself over the past 18 months, I have seen my medical provider or their billing service company mess up claims being submitted to my carrier. I have also overheard conversations between patients and office staff state that this would normally not be covered but don’t worry, we will adjust the diagnosis so it is covered. This problem is truly a two-way street.

  12. Michelle June 14, 2010 at 12:32 pm

    David- who do you think administers Medicare?

  13. common reader June 14, 2010 at 12:34 pm

    Regarding billing for “covered diagnoses”
    In my practice, I work with patients with chronic illnesses. I bill them as “Illness, chronic’ and it gets kicked back to me as not covered. My choice become “Illness, unspecified.” That diagnosis is not as specific as it could be, but it is the only way the patient will get reimbursed and my practice will get paid. Please understand that correcting for a billable diagnosis is usually just a byproduct of bureaucracy, not fraud.

  14. DJohn June 14, 2010 at 12:46 pm

    This is why you can’t trust Government run healthcare. Hey Obama it’s time you let private insurers process these claims. They would surely do this with more accuracy than the goverment. 20% rusutling in errors? Government is just not prepared to do this the right way. The free market is always more efficient.

  15. spellin June 14, 2010 at 1:10 pm

    I am convinced that 25% of all claims sent to insurance companies are filed in the trash the first time they are submitted. I used to do healthcare billing and Delay and Deny were the operative words.

  16. Lance Coardill June 14, 2010 at 1:18 pm

    ..But for what reason? Physicians and their staffs are hardly blameless. Recently I tore the infraspintus tendon in my left shoulder and had to visit an ER as a result. The ER physician was pretty clueless. Useless, actually. Despite this, I was billed $650 for the privilege of seeing this fellow, in way over his head, and because the group billed me for the entire unadjusted “usual, customary and reasonable” charge, and will not accept the contracted (Blue Cross/Shield) rate (even though they supposedly participate in the Blues PPO network) I am now being balance billed inappropriately. Lots of these doctors hire billing companies with clueless staff members that do sloppy, sloppy work. There is so much inherent waste in the process that one would be hard pressed to know where to begin to eradicate it.

  17. cshargeit June 14, 2010 at 1:21 pm

    the medical field has turned into the biggest of all rip-offs. not to offend hard working doctors and nurses. the administration and insurance side is criminal. worse and more abusive than the over-priced rip offs called the mortgage industry. i will die and be cremated for 60$ .. one can not beat that.

  18. Educated Guest June 14, 2010 at 1:35 pm

    David – have you come to this “no government” decision because your state funded education yielded less than stellar results?

  19. Timika June 14, 2010 at 2:00 pm

    ONLY 20%??? That’s an understatement. I have done physician billing for over 10 years. You can have all the correct information on a patient’s claim and submit it electronically, the insurance company tells you they have it in a report, only for 30 days later to tell you they never received it. HUH?? The big insurance companies are famous for doing this. It saves them money in the long run. The longer they delay payment on your physician visit, the more money they make. I don’t know if the Obama plan covers that part, but someone should make the insurance companies responsible. That’s why doctors don’t have contracts with certain insurers, such as United Healthcare, whom from my experience are notorius for not processing claims timely. You only have “x” amount of days to submit a claim. Guess what happens if you can’t prove you billed the claim. Yep, you’re out of luck and money is gone.

  20. Cliff Dweller June 14, 2010 at 2:54 pm

    DJohn said: “This is why you can’t trust Government run healthcare. Hey Obama it’s time you let private insurers process these claims. They would surely do this with more accuracy than the goverment. 20% rusutling in errors? Government is just not prepared to do this the right way. The free market is always more efficient.”
    Hey DJohn, get with the program! This story is about PRIVATE practices billing PRIVATE insurance, the feds are nowhere to be seen.
    But since you asked the gov ALREADY FARMS THIS OUT TO PRIVATE COMPANIES! Yes, Humana, BCBS, Anthem etc get contracts from the feds to process Medicare claims. Shocking, I know (irony implied)Yes DJohn, the govt is not the death star, they farm all kinds of stuff out (read Haliburton, Blackwater)and kneejerk teabaggers like you are fine with it when it benifits the rich (read: Cheney) but since you didint get your way with healthcare reform, now all things healtcare are by default doomed.
    Perhaps you should see a healtcare professional about this…and pay for it yourself.

  21. richard June 14, 2010 at 3:07 pm

    i agree with lance coardill, ER doctors are a joke. their fees are ridiculous.

  22. RomanB June 14, 2010 at 3:26 pm

    That “20%” is no accident.

  23. Galen Halsted, M.D. FRCP (C) June 14, 2010 at 3:38 pm

    Organizations like the Illinois Medical Society and AMA hardly speak for organized medicine. Years ago I belonged to the former just for the privilege of buying overpriced professionl liability insurance so this bloated bureaucracy could pay its “senior” (as in has been there forever) staff well over $1 million a year. I work my a– off to make enough to cover my bills and agree that the system needs repair. Beware, however, when you hear these mouthpieces for the ISMS and AMA talking about health reform, because, as the common denominator, in fact the ONLY denominator, it’s about pocketbook issues. The other week, at a medical staff meeting, a colleague was communicating enthusiastically about a new collection agency with which he affiliated to “sue patients” who do not pay. This very same doctor, in the next breath, decried the inability to effuctuate unfettered tort reform and the problems with the “bloodsucking” attorneys. When questioned he uttered something in Urdu to me and left the room.
    Card carrying member of the AMA is he.

  24. Steve June 14, 2010 at 4:36 pm

    Even though I do not work for any insurance companies or have anything to do with that industry I have to laugh at all the comments about getting government involved with health care. You are either kidding yourselves or just listening to the talking points of politicians because one of the major reasons for these mistakes is the fact that payment rules are different from state to state and change frequently.
    I ABSOLUTELY do not absolve the insurance companies as it is in their interest to make mistakes thereby increasing their cash flow and float but let’s not kid ourselves – GOVERNMENT IS ALREADY IN HEALTH CARE AND IS ONE OF THE MAJOR ENABLERS FOR THE INSURANCE COMPANIES.
    Something needs to change and as much as I try to listen I just do not see or hear any alternatives to “Obama-care”. If the alternatives are out there please sound them out as I think things need to change and would welcome to see what other proposed changes that are out there.

  25. Get with it June 14, 2010 at 4:37 pm

    Wingnuts and teabaggers, this has nothing to do with the program to be implemented. This is the current program. Quit knocking anything unfavorable in healthcare now as “See? I told you Obama healthcare wouldn’t work” proof when you’re not proving anything but your ignorance.

  26. fixitplease June 14, 2010 at 5:18 pm

    Is this really surprising? Insurance companies want to delay and deny as much as possible and see how long people will fight it until they just give up. Coupled with the fact that most of these billing people are entry-level office workers that probably have the same qualifications as someone working at KFC and it should be no surprise that the billing is messed up so often. In fact, I’m actually surprised that percentage isn’t higher. I wonder if they are using a conservative estimate here?