AMA: Now Only 1 In 10 Insurance Claims Are Processed Improperly

Insurance companies are getting a bit better when it comes to processing claims, according to the American Medical Association’s newest report card. The country’s seven largest insurers are paying out the wrong amount to doctors and other providers only 9.5% of the time so far in 2012, compared to 19.3% in 2011 and 20% in 2010.

The results were part of the AMA’s fifth annual National Health Insurer Report Card, which measures timelines, transparency and accuracies of 1.1 million medical claims.

According to the AMA, the improvement has managed to save health systems around $8 billion by eliminating costly administrative work. There are still enough errors to hurt the industry, as $7 billion was leaked in claims errors, reports the Chicago Tribune.

This is all good for you, because it means doctors don’t have to waste as much time on paperwork and can spend more taking care of patients, says the AMA.

“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 Dr. Robert M. Wah, the association’s board chairman.

1 in 10 health insurance claims processed improperly [Chicago Tribune]

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  1. Velkyr says:

    In other news, Americans are still going bankrupt from an ineffective health care system.

    • rmorin says:

      What do you suggest to solve the problem that this article presents in regards to errors in reimbursements?

      A single-payer system? Because single payer systems are error free right?

      http://articles.latimes.com/2012/apr/12/business/la-fi-0413-medicare-settlement-20120412

      There are plenty of arguments for single-payer systems, but errors on reimbursement are not one of them.

      • PunditGuy says:

        Teh Google tells me that in 2009, the Medicare billing error rate was 7.8%. 7.8

      • Loias supports harsher punishments against corporations says:

        Though not referenced in the article specifically, my understanding is that different health care providers use different coding for procedures, drugs, etc. and that those codings change often.

        A single payer system would, in theory, alleviate that issue by providing a single coding system used by all doctors, all hospitals, that could easily br tracked and maintained, thus making it less confusing and less prone for errors.

        But I understand your sentiment of annoyance when people put in totally unrelated slanted statements that don’t address the subject at all just to get in their opinion on something vaguely related to the topic at hand.

        • rmorin says:

          Thank you for understanding what I was getting at. The person I originally responded to is talking as if this would not be a problem in another healthcare system.

          In regards to billing everyone uses the “same” coding language called ICD-9 (in 2014 to be ICD-10), and CPT codes. The problems result when the documentation by the provider does not support the code they entered. For example, the provider entered in the code for MDI technique education, but did not include in their note that they actually did that. Another problem is that different health insurance companies reimburse different amounts for each of the codes.

          Finally coding is never black and white, I.E. for visits that only assess a certain number of body systems, but take the time it would take to assess more body systems, do you enter the code that matches up with the time spent with the patient or with the body systems that were assessed? The answer is: “it depends” and this would still likely be a problem with single payer as well.

      • u1itn0w2day says:

        Eliminate or reduce the third party payer system and you’ll reduce billing ‘errors’ .

        Oooops, can’t have that now can we with all those providers and insurers that have gouged patients and businesses alike perpetuating the myth that a optional form of payment called insurance is the only way to go-because it lined their pockets.

        Legacy providers and insurers are fighting to tooth and nail like legacy employees in an outdated business demanding the same pay for a system in this case few people want anymore. Days of way over billing and undercutting claims to come up with a supposed fair price are gone from two industries that worked hand in hand for decades using patients as human shields perpetuating their business model.

        • rmorin says:

          Medicare (the most likely approximation of what a single payer system would look like in the U.S.) has error rates only a little lower then private insurance.

          Any percentage is significant, don’t get my wrong, but it does not even come close to eliminating this problem. Please focus your anger at our healthcare system.

          Legacy providers and insurers are fighting to tooth and nail like legacy employees in an outdated business demanding the same pay for a system in this case few people want anymore.

          Your statement just is not correct:

          http://en.wikipedia.org/wiki/Single-payer_health_care#Public_opinion_in_the_United_States

  2. ColoradoShark says:

    This sounds like BS to me. There is no way the insurance companies have reduced their errors by half in two years. This smells a lot like the way it was measured changed. Or, like car dealers, there are big incentives in place to not complain. Or, it is self reported and whoever used to report it accurately was fired.

    The linked article has no references.

    • u1itn0w2day says:

      It’s perpetuate the myth that a private insurance based or third party reimbursed form of payment is the only way to pay for health care. Self perpetuating job security for providers and insurers by making it SEEM their chosen system is working.

  3. u1itn0w2day says:

    So the medical community and medical insurers have learned how to get along?

    So all the clerks and administrators from both the providers and insurers that work with each other on a daily basis processing claims have learned the art of the deal, give & take or you scratch my and I’ll scratch yours gouging businesses and patients in the name of job security and perpetuating an exhorbitantly over priced health care system based on a voluntary form of payment?

    • rmorin says:

      You need to direct your anger. Who exactly are you mad at in our healthcare system?

      You are talking as if the medical claims specialist making 35K-50K a year is some sort of fat cat milking you dry, when not directing frustration at those actually making policy decisions.

      • u1itn0w2day says:

        Everyone. The health care system has become institutionalized from the providers and insurers. They both realize they are actually starting to lose customers and patients because of the lack of insured patients. They both have exploited and abused the system to their advantage. Billing has become it’s own entity/profession, it’s now a club or brother/sisterhood either side of the equation. I’ve experienced gratuitous see what they can get billing , double billing and mystery billing and the insurers don’t care and the providers won’t give you clear cut answers-why because it’s business as usual for them. Just like most other employees they want a hassle free low work load day which means don’t even report reportable problems.

        I’ve even heard clerks and asssistants openly comment Oh I deal with them/a specific person at the company or practice all the time. How can they not let things pass when they are on friendly terms and want their job to go as smoothly/ hassle free as possible.

        And more recently I’ve had financial office people openly tell me about how in their meetings they are saying how they are loosing money from lack of insured patients and they been told to bill for EVERY LITTLE THING which is fine if they wouldn’t mark up the little things 4000%. Many industries tend to keep their finances secret or discrete in good or bad times but when they start recruiting their rank and file for sales and political bidding it’s either desperation or greed.

        • rmorin says:

          They both realize they are actually starting to lose customers and patients because of the lack of insured patients.

          Not unless you think the ACA is being repealed?

          Billing has become it’s own entity/profession, it’s now a club or brother/sisterhood either side of the equation. I’ve experienced gratuitous see what they can get billing , double billing and mystery billing and the insurers don’t care and the providers won’t give you clear cut answers-why because it’s business as usual for them.

          These will occur under a single payer system as well. Providers will charge for XXXXX code and the government will not cover it because the documentation is not there, or they don’t cover it in that specific circumstance. Depending on the exact legislation this could mean you are still on the hook for the charges. Unless you get a system where all providers are government employees, these things will occur, and my educated guess is that they would occur at roughly similar rates.

          I’ve even heard clerks and asssistants openly comment Oh I deal with them/a specific person at the company or practice all the time.

          To get reimbursement you need coding + documentation. If a MCS is familiar with a providers documentation then it may be easier to deal with them frequently. I don’t see how this is a bad thing. You are confusing two relationships: Provider to insurer and insurer to consumer.

          Many of your gripes seem connected to your insurer to consumer relationship which is what you should focus on. Let me absolutely assure you that any MCS/providers office would much rather work things out with an insurer (basically guaranteed reimbursement) then deal with billing a patient (absolutely not guaranteed reimbursement).

          And more recently I’ve had financial office people openly tell me about how in their meetings they are saying how they are loosing money from lack of insured patients and they been told to bill for EVERY LITTLE THING which is fine if they wouldn’t mark up the little things 4000%. Many industries tend to keep their finances secret or discrete in good or bad times but when they start recruiting their rank and file for sales and political bidding it’s either desperation or greed.

          Are you not answering your own question? If a particular hospital/office is in an area with high levels of lack of insurance, it is not greed, but desperation needed to keep doors open.

          Let me be abundantly clear; healthcare in the United States is not perfect, and yes having a third, for-profit party involved increases costs, but solutions such as single payer do not eliminate a lot of these problems, simply lessen them.

          • u1itn0w2day says:

            Hospitals whining about the lack insured can certainly mean financial hardship for them BUT for many it simply means they will not get the revenue they are used to or want. Their too big to fail structure will fail. Their are no entitlements for the patient or health care/insurance industry alike. Their spin off by product jobs & pay from a someone else is paying for it system will be tougher to keep. I want to see everyone employed but I want to see bills I, the actual user patient can actually afford to pay.

            I don’t want a single payer system but do want a free market system with actual pricing competition with the legal regulation & enforcement any other business would be subject to. And that includes prosecutions for price gouging, price fixing, false advertising, lack of disclosure etc. I want a system where there are flat cash flees or even hourly fees disclosed upfront. But that would eliminate the need for alot of the coding, coders,clerks and administrators and force the hospitals & practices adjust their prices like any other business which is exactly what they don’t want. In a free market you price your services as business or employment on what the market will bear, not what you feel you are entitled to-that’s business. You want to stay in business or employed you price accordingly.

            The current system acts or pretends they are not a single payer system yet it’s existence is based on a single form of payment (corporate insurance) It’s based on one single form of payment which until the mandate takes effect is still an optional voluntary form of payment the health care/insurance industry has exploited & perpetuated as the only way to pay. Abuse of insurance based services are most of the problem because it has been used for routine maintenance and not the catastrophic event/s insurance is ment for. It has been over priced because most insurance was backed or payed for by business/employers.

  4. krom says:

    Of course, this is all natural thing that they are doing (that they never did before!) and it has nothing to do with the fact that they are now required to provide refund checks to policyholders if they spend less than 80-85% of premium receipts on medical costs. By cutting overhead from dealing with these errors and managing the resulting losses, their non-medical-payment margin shrinks.

  5. u1itn0w2day says:

    AMA is made of doctors. Who benefits from an easy insurance claim process as much as anyone- doctors.

    Along with monuments to medical inflation called hospitals. Actually hospitals and support doctors & services gouge the patients and insurers as much as anyone in the system.

    • who? says:

      A Washington Post article I read a couple of years ago laid out the answer to “why is healthcare in the US so expensive?” really well. Of course, it was so good that they seem to have taken it off the site, because I can’t find it anymore. There were three things that really stood out in the article. Doctors, especially specialists, make about twice as much as they do in other countries. Hospitals cost about twice as much, mostly because every hospital has to have the latest and greatest stuff in order to compete with other hospitals. And drugs are more expensive here than anyplace else in the world.

      So, in essence, you’re exactly right. Hospitals and support doctors are a big part of the problem.

      My dad was in the hospital all last week. He’s 84, and went in with a fairly minor case of pneumonia, which they got under control the first day he was there. While they had him in the shop, though, they checked him over from head to toe, and did a bunch of expensive stuff that was totally unrelated to the pneumonia. In general, Dad is perfectly capable of making his own decisions, and so I’m sure they have his signature on a bunch of forms approving everything. But in talking to him, it’s clear that he had little idea from one day to the next what they were doing, or why an 84 year old man with advanced pulmonary problems would need half the stuff they did. I’m sure the bill will be 6 figures, or close to it.

      This is why medical care is so expensive.

      • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

        I wonder if the doctors ordered a pile of tests in case there was something wrong other than pneumonia, like maybe a lung cancer or who knows what else, to cover their behinds? I imagine piles of extra tests happen more often than not, especially if someone has decent insurance.

        • who? says:

          The first thing they did when he came in was a chest x-ray, and I’m fine with that. But he’s an 80+ year old guy who sees the doctor regularly, and many of the things they did were completely unrelated to the problem he came in with. At best, they were probably not necessary. At worst, they were invasive tests and procedures that kept him in the hospital for an extra couple of days, and exposed him to things that he wouldn’t have been exposed to otherwise, and that will also prolong his recovery time.

      • u1itn0w2day says:

        We’ve had two senior relatives have 5 day stays in the hospital over the last 18 months for approximately 1/2 million dollars in fees. This doesn’t include all the follow up and follow up for newly discovered issues but what wasn’t their actual problem-dehydration in both cases.

        How much does saline solution and round the clock baby sitting by hourly employees cost even if 50 dollar an hour nurses?

        Specialist are brutal.Anethesiaologist might not be the most expensive specialist but they are the most vicious billers. The MRI and eXray people-gougers all the way. Pharmacy-pfffft forget it. Bayer Aspirin never made as much on their highest retail price ever. And hospital clerks-you better pay this bill or else. I inquired about certain procedures recently. Less than a month ago the same hospital listed a 2 hour max out patient procedure at 20k even though a computer search said the low price in our zip code was 5700 on 2 year old stats. By the end of the month the same procedure was listed at 35K. How does a procedure go up 30% in less than a month. It like elastic pricing.

        But full disclosure is part of the problem hospital pricing especially. I’ll have to dig a news story but I saw where many non profit hospitals were becoming profitable and weren’t thrilled to lose their tax exempt status. US health care is simply an out of control system at this point. It’s always been actually but everyone beens forced to take a hard look at the numbers of late. They hid under the radar of business sponsored health insurance for too long.

      • rmorin says:

        You have some things right, and some things wrong.

        Yes specialists make way more in the U.S. then other countries, even controlling for other variables. That is why, believe it or not, there is a shortage of Family/General Practice providers.

        What I take exception to is:

        While they had him in the shop, though, they checked him over from head to toe, and did a bunch of expensive stuff that was totally unrelated to the pneumonia.

        An 84 year old with pneumonia is a high risk patient, regardless of your perception of his health. There have to be additional assessments and tests of other body systems, and this is not to simply up the bill but to make sure that he leaves in good health. The human body is complex, and systems all interrelate, with every patient, none-the-less someone that is at advanced age.

        You should be thrilled that your father went through what turned out to be “unnecessary tests”, because the alternative is much, much worse.

  6. Dirk Daring says:

    It’s done incorrectly on purpose, anyone who has filed a lot of claims like I have know this. They are hoping you will either not catch the ALWAYS bill in their favor or just pay because fighting it is a pita. Im 100% certain the insurance companies have strict policies for their claims personnel to deny or mess up all claims.

  7. dicobalt says:

    Maybe this has something to do with all those late night commercials for schools that teach you medical billing and coding.

    • u1itn0w2day says:

      BINGO. It’s not just the billing department you need a billing specialist. I saw a coding book at my practice recently and it was thicker and bigger than the paperback version an actual medical book Mercs Manual There are also medical bill collection specialists as well.

      I recently read an article where a group of doctors is known for creating codes because as they openly say it-never leave money on the table OR gouge as much as you can. They create codes for already coded procedures. It’s sort of like a plumber or mechanic charging extra for every different tool they use.

      • rmorin says:

        If you honestly want to understand the healthcare system in the United States, let me know your email and we can connect. Your statements throughout this thread have a lot of incorrect statements.

        It is completely legitimate to be upset with the current healthcare system in the U.S., but you are continually arguing the wrong reasons.

        /I graduate with a Doctorate in Nursing next month

    • who? says:

      I don’t for a second believe that the actual error rate has dropped by half in a single year. However, more and more medical practices have merged into bigger and bigger entities. Larger medical groups have entire billing departments, which allows them to have specialists who know how to jump through the hoops of each insurance company’s billing procedures. When I had a doctor who was a sole practitioner, he had a single person working for him who handled all billing and insurance. Practically every time I went to the doctor, there’d be some problem with the insurance. Since he joined a large practice, I go to the doctor, and the insurance statement that comes a couple of weeks later is generally correct, and everything gets paid for, at least within the limits of my not-that-generous policy.

  8. TheMansfieldMauler says:

    They certainly have gotten their money’s worth out of that helmet.

  9. tape says:

    Only!

  10. HenryPython says:

    I must be in the 5% as one checkup had both the doctor and the blood testing company both screw up my insurance claims resulting in me following back up with both and my insurance company.