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My Take on the Health Insurance Report Card

“Do it right the first time.” Isn’t that what our mothers’ told us time and time again? Well, evidently the insurance industry wasn’t listening.

Health Insurance Problems

On June 20, the American Medical Association (AMA) released its Health Insurance Report Card.  Not a report card a mother would be proud of, I might add; in fact, they cite multiple health insurance problems. Commercial health insurance companies have an error rate of 19.3 percent, up 2 percentage points from last year. Folks, that’s one in five claims being processed incorrectly. That 2% change comes out to an extra $3.6 million being spent on erroneous claims

Slow Claims Processing

What’s the problem?  Actually the biggest obstacle appears to be the lack of real-time claims processing. Currently, claims submitted electronically are taking an average of 5 to 13 days to be completed.  With real-time claims an electronic claim is processed while the patient is still in the office. In other words, the claim is sent and approved for payment before the appointment is completed.

Why the rush? Well, it would eliminate a lot of wasted effort.  Currently, 23% of physician’s claims are not being paid by insurers. The most common reason being patients having not yet hit their deductible requirements. A real-time claim process would catch this immediately, and a physician could collect from the patient at the time of service. No time wasted processing a claim and issuing the resulting paperwork.  The same case could be made for denials. While there has been a reduction in denials, (I would be remiss to not point out the good things happening in healthcare insurance also!) it’s also an area that could be reduced with real-time processing. A patient’s eligibility for coverage would be addressed on the spot.

The reasons why we aren’t universally using real-time claim processing vary from small practices not having the resources (capabilities, manpower, money) to electronically process claims, to the bigger picture of each insurer using different rules and systems for processing and paying medical claims.

Eliminating Process Errors Saves Money

The AMA estimates that eliminating health insurer payment errors would save $17 billion. You would think that number alone would motivate the medical and insurance industries to step up and address the problems.  Whether the answer be in real-time claims processing or not, streamlining claims submissions can only reduce errors and appeals. Spread these efficiencies over hundreds of millions of claims and I can guarantee you’ll see dramatic savings.

Now the final ingredient missing by all is – how do we get the patient involved in confirming the actual services submitted? (See MBA Healthshield)

The good news, however, is the AMA is conducting an annual check- up to encourage more efficient claims payment systems. Without self-reflection there can be no improvement, and as your mother says, “there is always room for improvement.”

Thanks for reading!

Healthcare Advocate

Rebecca Busch

adminMy Take on the Health Insurance Report Card

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