AMA House of Delegates
Medical claims payment error rate cut in half
■ Findings from the AMA’s National Health Insurer Reporter Card show that efforts to make the claims process more efficient have been successful.
By Pamela Lewis Dolan — Posted July 2, 2012

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Chicago Physicians overall saw an increase in the percentage of insurance claims paid correctly during the past year, and a decrease in the amount of hassles involved with receiving those claims in a timely manner.
The American Medical Association’s fifth annual National Health Insurer Report Card found that the percentage of claims paid incorrectly by insurers was cut in half, from 19.3% in 2011 to 9.5% in 2012, resulting in $8 billion in health system savings due to a reduction in unnecessary administrative work. Private insurers have improved response times to medical claims by 17% since 2008.
“Paying medical claims accurately the first time is good business practice for insurance companies that saves precious health care dollars and frees physicians from needless administrative tasks that take time away from patient care,” said AMA Immediate Past Chair Robert M. Wah, MD.
The AMA’s report was based on a random sampling of about 1.1 million electronic claims for about 1.9 million medical services submitted in February and March 2012 to Aetna, WellPoint-owned Anthem Blue Cross Blue Shield, Cigna, Health Care Service Corp., Humana, Regence, UnitedHealthcare and Medicare.
All of the insurers measured by the AMA improved their accuracy rating since 2011. For the second year in a row, UnitedHealthcare was ranked the highest for accuracy with a rate of 98.3%.
“The AMA has been working constructively with insurers, and we are encouraged by their response to our concerns regarding errors, inefficiency and waste that take a heavy toll on patients and physicians,” Dr. Wah said.
The National Health Insurer Report Card is part of the AMA’s “Heal the Claims Process” campaign, which began in 2008. The campaign is aimed at reducing administrative waste in the health care billing and payment system.
Though the gains made last year in accuracy were dramatic, there’s still room for improvement, the AMA said. Insurers still pay the wrong amount for one in 10 medical claims, costing the health care system an additional $7 billion, according to the report.
“We share the AMA’s goal of simplifying physicians’ administrative tasks so their time is spent caring for their patients,” said Tim Kaja, president of provider service operations at UnitedHealthcare.
Anthem Blue Cross Blue Shield made the largest improvement, with its accuracy rate rising from 61% in 2011 to 88.6% in 2012.
“Paying claims is a primary service provided by WellPoint, one that we take very seriously,” read a statement sent to American Medical News by Brandon Davis, corporate communications director for WellPoint. “We are continually working to improve our service levels, and our customers, physician partners and oversight agencies hold us accountable for how quickly and accurately we process claims. We hold ourselves to that high standard as well.”
The plans with the fastest response time to medical claims were HCSC and Humana, with a median response time of six days. Aetna was the slowest at 14 days.
“Aetna’s response time has remained consistent for several years,” said Aetna spokeswoman Tammy Arnold. “We work hard to balance response time with payment accuracy and feel we have the right mix.”
The AMA cited the prior authorization process as another area where more savings could be realized. It found that medical services requiring prior authorization were reported on 4.7% of claims, a 23% increase from 2011. The administrative burden of prior authorization policies will cost the health system $728 million in 2012, according to the AMA.
“The costly administrative burdens of the prior authorization process can complicate medical decisions and delay or interrupt patient care,” Dr. Wah said. “The AMA calls for replacing the largely manual process with an automated decision support system that will enhance patient care and reduce paperwork costs.”