AMA report: Payers more accurate, transparent, but problems continue

The AMA's second annual National Health Insurer Report Card, released in July, showed significant progress in areas such as transparency and accuracy. But the report also found continuing problems that would have to be addressed to reach the American Medical Association's goal of 1% or less of a practice's revenue devoted to billing and collections.

The report looked at 18 metrics, including payment timeliness, accuracy, claim edit sources and denials, all supplied by the National Healthcare Exchange Services, an electronic billing system interchange. The report also analyzed transparency of contracted fees and improvements of claim cycle, which were self-reported by the payers. Some of the nation's largest payers were evaluated: Aetna, Anthem Blue Cross and Blue Shield, Cigna, Coventry, Health Net, Humana, UnitedHealthcare and Medicare.

The annual report card was released as part of the AMA's Heal the Claims Process campaign. Data were provided by physician groups the AMA identified as having adopted best practices for electronic data interchange. The study's authors believe the results may be better than for practices that have not adopted those technologies.

According to the report, prompt-pay laws seem to have encouraged insurers to respond to electronic claims submitted by physicians with relatively quick payments. The median days to the first payment remittance showed some improvement from last year's report. Humana's response time, for example, went from a median 13 days to 9.

Payers are not required to report the date claims are received, but physicians need that information to track compliance with the prompt-pay law. Humana disclosed the date it received its claims nearly 40% of the time, which is far less than Coventry, which disclosed the date 100% of the time. Aetna, UnitedHealthcare and Medicare disclosed the date more than 99% of the time.

Payment accuracy also improved, according to the report. In the metric that looked at the accuracy between the fee schedule rates and the rate that was paid, Aetna, Anthem and Cigna scored more than 80%, compared to 70%, 72% and 66%, respectively, from last year. Humana and Medicare scored 93% and 98%, respectively, compared to 84% and 98% last year. UnitedHealthcare improved its score from 62% to 74%. Health Net was not included in this analysis due to lack of data.

"There must be an agreement between the physician and payer on the contracted fee schedule rate on every claim to maximize efficiency," the study said. But it acknowledged further research was necessary to determine if these discrepancies were to blame for inaccurate payments, as opposed to other discrepancies, such as eligibility or confusion over noncovered services.

The report also found that a "serious lack of standardization in the health care industry" has resulted in a wide variation in how often health insurers deny claims and why.

Mark Rieger, CEO of study collaborator NHXS, said payers and physicians need to focus on promoting electronic transactions that will simplify and clarify billing and payment.

"Physicians are likely to adopt electronic transactions when their value exceeds the costs," Rieger said. "And payers can increase the value of electronic transactions for physicians by increasing their use, their transparency and their accuracy. The goal is to get the cost of doing business down to 1%."

"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 show there is still work to do," said William A. Dolan, MD, an AMA Board of Trustees member.

According to the report, Cigna announced enhancements to its electronic remittance advice system in March, but because the data came from February and March, some of the scores do not reflect the progress.

Amy Turkington, a spokeswoman for Cigna, said other changes the company has made in the past year include auto-claim forwarding, which allows the physician to collect the insurer's portion and the patient's portion at the same time through an automated withdrawal from patients' health savings accounts. The company also launched a cost-of-care estimator that physicians can use to collect patients' portion at the time of care.

Susan Pisano, spokeswoman for America's Health Insurance Plans, said the organization agrees with the AMA that simplifying the administration of health care must be a priority. She said the two organizations are working together, along with other payer and medical organizations, on an overhaul of the system.

Pisano said a major pilot project will help: an online portal through which physicians can connect with all payers and accomplish all the administrative tasks associated with billing.

"We're excited ... we think this work will do for health care and for the process of delivering and getting health care what ATMs did for banking," Pisano said.

WellPoint said it is launching a similar system for members in Indiana, Kentucky, Missouri, Ohio and Wisconsin later this year. Its portal will allow physicians and hospitals to access real-time eligibility and benefits information, claim status, radiology precertification and secure messaging.