For many years physicians have complained about payers’ claim processing, saying that it was slow and inaccurate. The American Medical Association began checking on that process a few years ago and now releases an annual survey of the largest health plans. (AMA Material) The AMA’s survey consists of thousands of claims from Aetna, UHG, Cigna, Wellpoint, Humana, Coventry and Health Care Services Corp. (the Blues plan for Illinois, Texas and some other states). An independent contract compliance and denial management vendor assisted with the analysis. It should be noted that this vendor sells services to physicians designed to help them maximize their revenue through coding and other adjustments. Not exactly a neutral party.
AMA’s press release on the report has as its main point that 20% of claims are paid inaccurately and that if they weren’t, as much as $15 billion a year in wasted administrative effort could be saved. This is a fairly misleading statement. What AMA defines as inaccurate payment is that the provider didn’t get what they think their contracted fee schedule called for, but complete adjustments do not appear to be made for appropriate payer changes to what the provider billed. Provider billings are often not “accurate” which includes many cases where the provider engages in coding and other games to maximize revenue.
What the report does show is that payers tend to respond to claims very quickly, usually within ten days or so, that payers have a low percentage of claim denials, almost always under 3%, and that payers use electronic interaction, including claims payment, as much as possible. It is usually provider IT system issues that cause electronic interaction such as eligibility checks, claim submission or claim payment not to be used. The report does not indicate what percent of claims denials are inappropriate, at least in AMA’s judgment, which would suggest that very, very few are. A really useful report would look at both sides of claims interaction to identify potential issues. A big one that sooner or later the health system must address is that providers have gotten very good at documenting higher reimbursed codes, whether or not the documentation actually reflects the patient’s clinical condition. Verifying that clinical condition is very hard for payers to do, but the reform act dinged Medicare hospital payments because of this issue. Providers’ complaints about payers’ claim processes may have had merit a few years ago, but at this point providers are more of the problem.