One out of every five private payer claims are processed incorrectly by insurance carriers, according to the AMA's 2010 National Health Insurer Report Card, released June 14. The results were based on the AMA's benchmarks of seven major private insurers: Aetna, Anthem BCBS, CIGNA, Coventry, HCSC, Humana and UHG. NOTE: The AMA's analysis did not include any Medicare or Medicaid contractors.
"The finding that one in five medical claims are processed by insurers with errors emphasizes the huge potential for reducing administrative costs for physicians and insurers," said AMA Immediate Past President Nancy H. Nielsen, MD, in a prepared statement.
Here's the breakdown on the accuracy of electronic remittance advice (ERAs) for the seven insurers:
- Coventry: 88.41%
- HCSC: 87.83%
- UHG: 85.99%
- CIGNA: 84.51%
- Humana: 82.92%
- Aetna: 81.23%
- Anthem BCBS: 73.98%
The entire U.S. health care system spends about $210 billion annually on claims processing, according to the AMA. About $777.6 million would be saved annually for every 1% increase in the accuracy of ERAs, the AMA says.
"Each insurer uses different rules for processing and paying medical claims, which cause complexity, confusion and waste," Dr. Nielsen said. "Simplifying the administrative process with standardized requirements will reduce unnecessary costs in the health system and eliminate the variability that makes it necessary for physicians to maintain costly claims management systems for each health insurer."
The AMA's report analyzed a total of 17 metrics, including many that weren't related to processing accuracy, such as first remittance response time and electronic funds transfer adoption rate. You can download the full results of the 2010 health insurer report card from the AMA.