AMA: 20 percent of medical claims processed inaccurately

Health insurers make mistakes processing 20 percent (one in five) of medical claims, according to the 2010 National Health Insurer Report Card from the American Medical Association (AMA) in Chicago. A one percent improvement in that error rate could cut unnecessary administrative costs by $776 million a year, estimates the AMA. (A perfect 100 percent accuracy rate could generate $15.5 billion in annual savings.)

The AMA study reviewed eight payers: Aetna Inc., Anthem Blue Cross and Blue Shield (BCBS), Cigna Corp., Coventry Health Care Inc., Health Care Service Corp. (HCSC), Humana Inc., UnitedHealth Group Inc. and Medicare. Like the recent 2010 PayerView Rankings, the AMA review found fairly wide variability in payer performance. Of the seven commercial health insurers, Coventry Health Care performed the best with a national accuracy rating of 88.41 percent, followed by UnitedHealth at 87.83 percent. Anthem BCBS came in last with a national accuracy rating of 73.98 percent.

The frequency of denials by insurers ranged from .67 percent (Cigna) to 4.5 percent (Anthem BCBS). The most common reason cited across the board for those denials was lack of eligibility. The time it took insurers to respond with a first remittance varied from five median days (Coventry) to 13 median days (Aetna). At six median days, Cigna was the only payer to improve in this category vs. the previous year. Cigna cut its response time in half, while the other insurers had slight increases, taking one to two more days to respond to a claim.

To learn more:
- check out this AMA press release
- review the report results