Ever since the beginning of health insurance in the U.S., a certain tension has existed between doctors and health insurers. It can be argued that it's because their relationship is fundamentally contentious in that providers have performed a service for which they expect to be paid, and health insurers don't want to pay unless they absolutely have to so they make up a slew of nitpicky rules and edits with which to deny or reject claims for the slightest pretense.
The focal point of this has always been medical claims processing – specifically, whether it's being done right or not. Providers maintain that too many claims are denied or otherwise messed up and insurers say that they mainly get it right, so be happy with what ya got. And this relationship has never been more bitter than the last few decades with the advent of managed care and health insurers switching their business model from non-profit to corporate profit making behemoths and clinics and hospitals left to deal with it as best they know how.
So it's not surprising to see some push back. Since 2008, this has mainly come form the American Medical Association (AMA) with their “Heal the Claims Process” campaign that has some very ambitious goals, especially the last three considering who they're dealing with and trying to get to do something that they don't see as in their immediate best interest:
1. Encourage physicians and staff to submit claims accurately and in a timely fashion
2. Empower physicians to demand fair payment from health insurers
3. Call on all payers to fully comply with the HIPAA electronic claims transactions standards
4. Have all payers give payment accurately and in a timely manner the first time after receiving a claim initiative.
The primary metrics of this effort are contained in the National Health Insurer Report Card (NHIRC), a study of the claims revenue cycle activities of the eight major health insurers - Aetna, Anthem, Cigna, HSCS, Humana, Regence, United Healthcare and Medicare. The NHIRC looks at "timeliness, transparency and accuracy of claims processing of these payers in an effort to educate physicians and the public, and to reveal opportunities for improvement.”
And judging by past results, these companies have been giving this study the "international sign of defiance" (see right) as far as any medical claims processing accuracy and other demonstrable improvement is concerned. They've all been puttering along at about 80% overall accuracy - and no higher – since the beginning of the thing which is a disgrace by any and all standards! That is until this year (2012). When I saw these current stats, I had to do a double take because I'll be damned if they didn't just improve their accuracy, but they did it by 50% in one year. And I had to ask myself, "at what cost?" Read on.
If You Can't Beat 'Em...
Here are the results; Commercial insurers incorrectly processed about one in 10 claims in the early part of 2012, which is a major improvement over the one in 5 error rate from last year, according to the American Medical Association (AMA).The finding comes from the AMA's fifth annual National Health Insurer Report Card, which was released at the AMA's annual house of delegates meeting here.
The report concludes that insurers incorrectly processed, or paid the wrong amount, for about 9.5% of all claims. Last year's report card found an error rate of 19%.The AMA claims this reduction in errors adds up to $8 billion in health systems saving by eliminating costly administrative work to reconcile errors, and that's not all the money that can be squeezed from the system. The report states that an additional $7 billion could be saved in insurance made no claim payment errors at all, the report found.
The AMA said its efforts to transform the chaotic health insurance billing and payment system are the reason the error rates were halved. AMA has worked with individual insurers over the past year to identify gaps in claims payments systems and try and correct those issues.
"The AMA has been working constructively with insurers, and we are encouraged by their response to our concerns regarding errors, inefficiency and waste that take a heavy toll on patients and physicians," said AMA board chairman Robert Wah, MD, in a press release. "Paying medical claims accurately the first time is good business practice for insurance companies that saves precious health care dollars and frees physicians from needless administrative tasks that take time away from patient care."
The findings from the 2012 National Health Insurer Report Card are based on a random sampling of about 1.1 million electronic claims for 1.9 million medical services submitted in February and March of 2012. Payment timeliness and type of payment, accuracy, frequency of claim payments, and denials were assessed.The AMA found that insurance companies have an overall claims processing accuracy rate of about 90.5%. Every insurer improved its accuracy rate from last year. The payer that was most accurate at processing claims was United Healthcare, for the second year in a row with an accuracy rate of 98%, and Humana came in last with a claims processing rate of 87%.
Anthem, the company with the lowest accuracy rate last year improved its accuracy rating drastically -- jumping from a 61% accuracy rating in 2011 to an 88.6% accurate rate in 2012. The AMA also looked at Medicare's accuracy rate, and the public insurer bested the private companies with an accuracy rate of 99.5%.
Total Denials Increase
The report card also found:
Private insurers shortened response time for medical claims by 17% from 2008-2012. Health Care Service Corporation and Humana had the fastest median response times (six days) and Aetna had the slowest (14 days).
Medical claims denials increased from 2011-2102. Anthem Anthem Blue Cross Blue Shield had the highest denial rate at 5%, while Regence had the lowest denial rate of a little more than 1%.
Robert Zirkelbach, a spokesman for America's Health Insurance Plans (AHIP = Toadies), said that health insurers have made progress streamlining administration and improving efficiency, but doctors have a responsibility to improve claims payment processes as well.
"Health plans and providers share the responsibility of improving the accuracy and efficiency of claims payment," he said, "Health plans are doing their part by collaborating with providers and investing in new technologies to improve the process for submitting claims electronically and receiving payments quickly. At the same time, more work needs to be done to reduce the number of claims submitted to health plans that are duplicative (sic), inaccurate, or delayed."
Something very telling about the above is the contrast in the back and forth between the AMA and AHIP, the main stooge organization of the health insurance industry. If you read between the lines, the AMA spokesman, Dr. Wah, is saying that finally, all their hard work with these outfits is beginning to pay off in savings. Zirkelbach of AHIP counters this viewby crowing, "Sure, we improved, but no thanks to these guys, and it cost us something out of our own precious pockets!." This, after it was all at the behest of AMA that this Heal the Claims Process clean up effort started in the first place. It's funny that AHIP never had much of anything to say the previous dismal years, but, as always, "success had many fathers but failure is an orphan."
F.I.T. - Improve Or You're Fired
One thing is for sure. These big insurers do not do anything out of the goodness of their collective heart. There has to be something in it for them. My personal suspicion (not demonstrated by any known statistical facts) is that, across the board, they all have something similar to the arrangement that I know for a fact exists between United Healthcare and their big accounts. That is, companies like John Deere and Verizon negotiate a premium rate with UHC that is determined by outside audits of claims accuracy; The lower the accuracy, the less the company pays in premiums to UHC after penalties are assessed for bum claims.
When I worked there, that's all I ever heard about in our so-called monthly "town (department)" meetings was, "You - (always 'you,' never 'we') - failed the audit for this company or that company, and we lost X amount in premium." They really beat you over the head with it. However, you were expected to get those claims out the door at a mind boggling rate. You can see the conflict there between production and quality. You ain't gonna get 'em both, we would argue. They would say, "Well, that's what our efficiency studies have shown is the rate. So do it, or you'll be put on corrective action (the slippery slope to firing.)"
Eventually, they started a program called F.I.T. (Fundamentals Improvement Teamwork) in which we were required to attend a team meeting daily in which we would discuss these concepts, or maybe write an essay about it and the best one would win a prize like a mouse pad even! It didn't help much: I can truthfully say that I have never been in more contentious meetings than those town meetings. A thousand people from offices and telecommuters from home engaged in a massive gripe session when they were alleged to be "constructive" in purpose but without fail, they turned into massive gripe sessions - from workers and suits alike - until the allotted hour was up, and it was time to get back to the "work" (such as it was).
So it's always behooved them to do better. They just haven't because their claim processing production standards (numbers) were so high that errors resulted, and, what the hell, they were already making so much profit that they were more or less satisfied if the AMA didn't bug them about it too much. But now the AMA has started in on them, and they probably feel that they should at least make some token effort, and that token effort probably got out of hand so the worm is starting to turn after five years, and that's pretty much always the rate of speed at which these companies operate to change anything for the better: Slooooooow. And they'll probably return to their slacker ways next year.
Whatever the real reason(s) for the improvement, however, you still gotta hand it to 'em for this year. When these insurers want to improve, they certainly can. But notice one last thing: Total claim denials in 2012 went up for the first time since the study started. That's nirvana to these corporate behemoths because premium paid amounts are up and revenue paid out on claims is down. What could be better for them than when CEO's and their immediate underlings can keep lining their pockets in salary and bonuses to an obscene degree even while ragging on the poor, underpaid schmucks in the trenches to process claims at an even higher accuracy rate, or else. And providers? The AMA can keep leaning on insurers to be more efficient and do better, but in the end, they'll have to keep pounding sand because in the health insurance biz, it's a zero sum proposition. Always.