CHICAGO – Health insurers have made important improvements in the twelve months since the American Medical Association (AMA) called for an overhaul of the industry’s billing and collection process, yet there is a tremendous opportunity for improving efficiency in the nation’s multi-payer health care system. This is the key finding of the AMA’s National Health Insurer Report Card, released today through the AMA’s Heal the Claims Process campaign. This is the second year in a row that the AMA has released its report card to diagnose the strengths and weaknesses of the claims processing systems used by the nation’s largest health insurers.
“We are encouraged that health insurers took the AMA’s initial report card findings seriously and made improvements, but the new results from this year’s report card shows there is still work to do,” said AMA Board Member William A. Dolan, M.D. “Each insurer uses different rules for processing and paying medical claims that results in confusion and inconsistency. Simplifying the administrative process through standardized processing and payment requirements is needed as part of comprehensive health reform legislation this year. It will reduce unnecessary costs in the health system and eliminate the variability that requires physicians to maintain a costly claims management system for each health insurer.”
The inefficient and inconsistent claims process adds as much as $200 billion annually to the health-care system. One recent study estimated physicians spend the equivalent of three weeks annually on health insurer red tape. To keep up with the administrative tasks required by health plans, physicians divert as much as 14 percent of their revenue to ensure accurate payments from insurers.
To encourage a more efficient and streamlined claims processing system, the AMA’s National Health Insurer Report Card examines the performance of the nation’s eight largest health insurers and provides physicians and the public with an objective and reliable measure based on denials, timeliness, accuracy, and transparency.
Key findings from the 2009 National Health Insurer Report Card include:
Denials. The inconsistency found among health insurers in 2008 continues to be demonstrated in 2009. The wide variation in how often health insurers deny claims, and the reasons used to explain the denials, indicates a serious lack of standardization in the health insurance industry.
Timeliness. Prompt pay laws continue to appear effective in encouraging insurers to respond to physician electronic claims with relatively quick payment transmittals. Five of eight insurers showed a slight improvement from last year in reducing the median time necessary to respond to a physician claim.
Accuracy. While there remains room for improvement, health insurers made progress in eliminating unnecessary reporting discrepancies from the payment process. Private health insurers correctly reported the expected contracted rate to physicians 72 to 93 percent of the time in 2009, compared with 62 to 87 percent of the time in 2008.
Transparency. Payers have made improvements since 2008 in their efforts to disclose vital policies and information to physicians through their Web sites. Almost every insurer provides physicians with at least some access to a range of payment policies, with the notable exception of policies related to prior-authorization of services.
To view the complete findings, or to listen to a webinar on the 2009 report card, please visit the AMA Web site at: http://www.ama-assn.org/go/reportcard
“The report card results demonstrate an urgent need to minimize billing conflicts and insurance-related administration activities under comprehensive health reform legislation this year,” said Dr. Dolan. “Physicians must be allowed to re-direct their time and resources back to patient care, and away from excessive paperwork.”
President Barrack Obama emphasized returning physicians to their role as healers last month when he told physicians at the AMA Annual Meeting: “You did not enter this profession to be bean-counters and paper-pushers. You entered this profession to be healers – and that’s what our health-care system should let you be.”
The AMA has issued a new white paper urging the administration, Congress and health insurers to consider five recommendations for bringing transparency, simplicity and consistency to the nation’s multi-payer system.
“The AMA urges standard payment rules and common claims processing requirements that would decrease administrative costs for physicians and insurers,” said Dr. Dolan. “These resources would be better directed towards providing efficient, high-quality care throughout the health-care system.”
The white paper outlining the AMA’s vision for administrative simplification is available on the AMA Web site at: http://www.ama-assn.org/ama1/pub/upload/mm/368/admin-simp-wp.pdf