AMA launches National Health Insurer Report Card
According to data released by the American Medical Association, more than $210 billion is wasted annually by inefficient medical claims processing.
The AMA's National Health Insurer Report Card, which launched in conjunction with the Cure for Claims campaign on June 16, studied random samples from more than three million claims. “The [data] raises the specter of a healthcare system that needs to be fixed – it's broken,” said William Dolan, MD, an AMA board member.
The claims data, culled from seven commercial payers and Medicare, found that payers vary – from 0% to 72% - on how often they use proprietary (black-box) computer-generated edits versus public edits to reduce payments during claim submissions. Additionally, outright denials of claims and the reasons for them vary widely, from 3% to nearly 8%, according to the data.
Dolan says the difference in filing a claim with 99214 instead of 99213, for example, translates directly into extra time and money. “Computer systems and black boxes auto-decode claims – they pick up a number and reject it or downgrade it. Entering 99214 will get rejected. In order to receive payment then, a physician has to first dictate a copy of the claim to a staff member, then have the staff member dictate copy, and then send the copy with the claim. If I'm filing too many [99214s], the payer knows it, and there should be an audit. It's expensive on both sides, and there's no need for it.”
Another example of detrimental “friction costs,” according to Dolan, is preauthorization for an MRI. “A secretary making $16 an hour spends 30 minutes requesting preauthorization for a patient's MRI, and another half-hour in filing the necessary forms. That's $16 spent on something [the physician] is not getting funds on,” says Dolan. Formularies are another problem area, notes Dolan, since some insurance companies cover different drugs for different reasons, and don't provide that information to doctors. According to an AMA statement, physicians divert as much as 14% of their total revenue to ensure accurate payments for their services.
The seven private companies surveyed for the National Health Insurance Report Card included Aetna, Coventry Health Care, UnitedHealthcare, Anthem Blue Cross and Blue Shield, Health Net, Inc., CIGNA Corp., and Humana, Inc. Claims used in the sample data were submitted between July 1, 2007 and March 31, 2008.
As a part of the Cure for Claims campaign, the AMA created the Practice Management Center, an online resource offering physicians a library of resources and tools for preparing claims.