AMA: Eliminating claims errors would save $17 billion annually

Claims-processing errors among commercial insurers add an estimated $17 billion in unnecessary administrative costs to the healthcare system annually, according to the AMA, which released its fourth annual National Health Insurer Report Card in conjunction with the group's annual delegates meeting in Chicago.

The 2011 report card is based on a random sampling of about 2.4 million electronic claims for approximately 4 million medical services submitted in February and March 2011 to Aetna, Anthem Blue Cross Blue Shield, Cigna, Health Care Service Corp., Humana, the Regence Group, UnitedHealthcare and, for comparison, Medicare, according to the AMA. The claims were gathered from more than 400 physician practice groups in 80 medical specialties in 42 states.

The average claims-processing error rate for the six commercial insurers that were analyzed both in 2010 and in 2011 was 19.3% this year—an increase of 2% over last year, according to an AMA news release. That increase is expected to add $1.5 billion in administrative costs over the course of this year, according to the AMA.

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. "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," he said. "At the same time, more work needs to be done to reduce the number of claims submitted to health plans that are duplicative, inaccurate or delayed."

The AMA also found "dramatic reductions" in denial rates for several of the insurers studied. Lack of patient eligibility for medical services remains the most frequent reason for denials, the association noted in the release.