The American Medical Association (AMA) recently released its 2010 National Health Insurer Report Card, and for therapy practices that depend on insurance payments for their livelihood it is worth a closer look. The key take away from this third installment of the annual report is that the AMA found that one in five medical claims are processed inaccurately by health insurers, which for the first time benchmarked the overall claims processing accuracy of the country’s largest health insurance providers.
Based on the AMA’s findings, the health insurance business as a whole has about an 80 percent accuracy rate for processing and paying claims. Coventry Health Care Inc. ended up on top of the seven commercial health insurers assessed by the AMA along with a national accuracy rating of 88.41 percent. Anthem Blue Cross Blue Shield completed the list with a national accuracy rating of 73.98 percent.
The AMA estimates that $777.6 million in unnecessary administrative fees could be saved if the health insurance industry boosted claims processing accuracy and reliability by one percent. At the moment, the health care system spends as much as $210 billion annually on claims processing. One new analysis estimated physicians pay out the equivalent of five weeks per year on health insurer red tape. To keep up with the administrative responsibilities required by health plans, physicians divert up to 14 percent of their earnings to guarantee accurate payments from insurers.
To promote a more economical and streamlined payment system, the AMA’s National Health Insurer Report Card delivers a handy overview of how each of the nation’s seven main commercial health insurers can improve their claims processing efficiency. The methods health insurers utilize to process and pay out claims were assessed according to:
• Accuracy. Along with measuring overall claims processing accuracy and reliability, the report card looked at how accurately insurers reported the proper contract fees to physicians. Commercial health insurance providers realized significant improvements over the past three years. Contracted fees were properly reported 78 to 94 percent of the time in 2010, in contrast to 62 to 87 percent of the time in 2008. UnitedHealth showed the biggest improvement in reporting correct contract fees, while Health Care Service Corporation scored the highest. The overall performance of insurers varied substantially by state, ranging from 58.6 to 96.9 percent.
• Denials. The inconsistency found among health insurers in 2008 continued to be shown in 2010. There is wide variation in the frequency of denials by insurers, ranging between .7 to 4.5 percent. Lack of eligibility remains the most frequent cause of claim denials, signaling the need for employers and insurers to help educate patients about the limits of their insurance coverage. Physicians can help reduce denials by making sure all claims are complete and accurate.
• Timeliness. The report determined that insurers’ response time to a claim ranged between five to 13 median days. With the exception of CIGNA, all of the insurers measured last year demonstrated slight increases in the number of days needed to respond to claims.
Every effort you can make to reduce denials, rejections and delays with your billing operations will mean more money to your bottom line. And for therapy practices, your best tool to achieve this is by using The Automated Medical Assistant, the online therapy billing solution created specifically to accommodate the intricacies of therapy practice billing.