(Corrects 11th paragraph to show insurers were
comparatively slower, and not faster, responding to claims;
except for Cigna Corp, which improved its response times)
* One in five health insurance claims mishandled-report
* U.S. savings of $15.5 billion if claims processed right
By Andrew Stern
CHICAGO, June 14 Claims-processing errors by
health insurance companies create billions of dollars in
unnecessary administrative costs, slow down payments to doctors
and frustrate patients, the main U.S. doctor's group said on
The American Medical Association said one-fifth of all
claims are mishandled by health insurers.
Begun in 2008, the association's annual "National Health
Insurer Report Card" rated the nation's eight largest health
insurers in how they handle claims, and concluded that if all
problems were resolved the system would save $15.5 billion
annually in administrative costs.
Currently, the health care system spends as much as $210
billion annually on claims processing, according to the report
issued at the AMA's annual meeting. Doctors have long
complained about excessive paperwork required to satisfy
"Each insurer uses different rules for processing and
paying medical claims, which cause complexity, confusion and
waste," former AMA President Dr. Nancy Nielsen said in a
statement accompanying the report.
"Simplifying the administrative process with standardized
requirements will reduce unnecessary costs in the health
system" that often requires doctors to file different forms to
each insurer, she said.
The AMA described mishandling as claims processed with
errors - underpaid, overpaid or incorrectly unpaid.
Among the eight companies, Conventry Health Care CVH.N
was rated the best with an accuracy rate for processing and
paying claims of 88.4 percent. Anthem Blue Cross Blue Shield
was at the bottom with a score of 74 percent.
The overall accuracy rate was 80 percent, with each 1
percentage point improvement worth $778 million in savings in
unnecessary administrative costs, the AMA said.
Still, the AMA said insurers led by privately owned United
Healthcare made progress since 2008 in accurately reporting the
fees paid to contracted doctors.
All except Cigna Corp (CI.N) had gotten slower since 2008
in responding to claims, with responses coming between five and
13 days. Insurers made better use of websites to disclose
policies and fees to physicians, reducing disputes.
Denials of insurance claims remained a sore point for
physicians, who called for insurers and employers to provide
clarity about what is and is not covered. The percentage of
claims denied -- usually because of eligibility issues --
ranged from 0.7 percent to 4.5 percent.
Other companies evaluated were Aetna Inc (AET.N), Humana
Inc (HUM.N), UnitedHealthGroup (UNH.N), and Health Care Service