Insurance companies have 19 percent error rate

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The overall rate of inaccurate claims payments increased since last year among leading commercial health insurers, according to the American Medical Association’s fourth annual national health insurer report card.

The association says commercial health insurers have an error rte of 19.3 percent, an increase of 2 percent compared to last year. That increase represents an extra 3.6 million in erroneous claims payments compared to last year, and added an estimated $1.5 billion in unnecessary administrative costs to the health system. The AMA estimates that eliminating health insurer claim payment errors would save $17 billion.

“A nearly 20 percent error rate among health insurers represents an intolerable level of inefficiency that wastes an estimated $17 billion annually,” said AMA board member Barbara L. McAneny. “Health insurers must put more effort into paying claims correctly the first time to save precious health care dollars.”

Most of the insurers measured by the AMA failed to improve their accuracy rating. United Healthcare was the only commercial health insurer surveyed to demonstrate an improvement – and came out on top with an accuracy rating of 90.23 percent. Anthem Blue Cross and Blue Shield scored the worst, with a rating of only 61.05 percent.

Other key findings:

– Doctors received no payment at all for nearly 23 percent of claims they submitted.

– Insurance companies have reduced denial rates dramatically – with Cigna leading the pack with a denial rate of only.68 percent. Lack of patient eligibility for medical services is the most frequent reason for denials.

– Cigna had the highest rate of claims requiring prior authorization, which the AMA claims delayed or interrupted medical services.

The findings from the report card are based on a random sampling of about 2.4 million electronic claims for 4 million medical services submitted in February and March of this year. Insurance companies included Aetna, Anthem, Cigna, Health Care Services Corp., Humana, the Regence Group, United Healthcare and Medicare. Claims were accumulated from 400 doctors in 80 medical specialties in 42 states.