The AMA said, “Commercial health insurance companies have an error rate of 19.3 percent, up two percentage points from last year's report.”
The healthcare insurance industry’s computer systems become better each year. At the same time, the healthcare industry has a higher error rate each year.
The healthcare insurance industry’s explanation of benefits becomes less comprehensible to patients and physicians every year.
When physicians discover insurers’ mistakes in reimbursement they fight the healthcare insurer for their patients or themselves. It is costly to fight and it distracts physicians from their job of diagnosing and treating patients.
I think the error rate in reimbursement is even higher than reported. A significant percentage of physicians or their billing services do not pick up many of the errors.
The claims were gathered from more than 400 physician practice groups in 80 medical specialties in 42 states.
It must be recognized that the random sample is a small percentage of the total number of claims processed. The results can have a large margin of error and result in a higher percentage of mistakes.
The additional administrative costs have an insurance industry’s profit component added on to reprocessing the errors.
Why hasn’t President Obama recognized this and gone after this abuse of the healthcare system?
"Robert Zirkelbach, spokesman for America's Health Insurance Plans, said in an e-mailed response that insurers and providers share the responsibility of improving claims payment accuracy and efficiency."
The insurance industry uses non-payment to hold onto the float. It results in hassling physicians and patients. Physicians are starting to demand full payment for services at the point of service from patients. This leaves adjudication of claims to the insurance company and patients. It can represent a hardship to patients.
Aetna, Anthem Blue Cross Blue Shield, Health Care Service Corporation and UnitedHealthcare cut denial rates in half in one year to 1.05 percent as a result of last year’s AMA report card.
There is an increase in the rate of claims requiring prior authorization. Physicians have to ask permission before performing services or treatments.
This increased requirement has many effects. It undermines the physician patient relationship and the patient’s confidence in the physician. It delays or interrupts medical services to patients. It consumes a significant amount of the physician’s time. It complicates medical decisions. It should be patients who question their physician’s decisions and have their physician justify the treatment to them.
The healthcare insurance industry agrees to contracted reimbursement fees. The fees vary depending on how much the healthcare insurance company needs particular physicians in its network. Healthcare insurers have been notorious about not processing claims accuracy.
It seems to me that with the state of the art of information technology being what it is, contracted fee reimbursement should be automatic and accurate. Most insurers have gotten better over the last year.
This is inexcusable. It might be purposeful in communities where Anthem Blue Cross Blue Shield is the dominant insurer.
The AMA report card has been effective in exposing response time for adjudication of claims by physicians to the healthcare insurance company. CIGNA and Humana have cut their median claims response time in half in the last four years.
Response times varied for commercial health insurers from six to 15 median days.
The resulting waste in the healthcare system from all of these tactics is enormous. Total healthcare insurance industry administrative waste (unnecessary expenses) is about $150 billion dollars a year.
If President Obama really wanted the present system of employer sponsored insurance to survive, he would be putting resources toward solving these problems.