Insurers’ payment practices get mixed ratings

A new report card gives insurance companies mixed reviews on payment processes and claims procedures, but consumers and doctors have the power to force improvements, the study's authors say.

The American Medical Association's 2008 National Health Insurer Report Card, released Monday, evaluates eight major health care payers on how quickly and accurately the companies answer and pay claims. It also gauges the transparency of insurers' claims-payment processes. The goal: to highlight inefficiencies in claims handling, and to help doctors refine billing practices.

The association's report card provides nationwide performance details in 12 areas, including how quickly insurers respond to claims and how often payments to doctors match contract amounts.

Nevada's biggest private insurers acknowledged claims relatively quickly, but their reimbursements often fell short of contractual levels.

UnitedHealth Group, which became Nevada's No. 1 insurer when it bought local company Sierra Health Services in February, responded to claims in a median of 10 days, well below the 15 days the association set as acceptable. But UnitedHealth, which insures more than 800,000 Nevadans, adhered to contracted payment amounts just 61.6 percent of the time, the study showed.

Anthem Blue Cross-Blue Shield, which has about 270,000 insureds in Nevada and ranks as the state's second-biggest private payer, answered claims in a median of seven days, and got payments right 72.1 percent of the time.

Both insurers received positive nods for placing fees and payment policies online.

Peter O'Neill, a spokesman for UnitedHealth, said the company has shown gains in its performance standards in recent months.

Nationally, UnitedHealth pays more than 20 million claims a month, O'Neill said, and it pays 95 percent of all those claims within 10 days. The company's own measures found that accuracy on claims payments was more than 99 percent in the fourth quarter. First-remittance accuracy was up 60 percent year over year for physician calls in the fourth quarter. And following regular telephone surveys of doctors, satisfaction with UnitedHealth's service jumped from 60 percent to 80 percent in a year, O'Neill noted.

"UnitedHealth has really stepped up opportunities to consult with and receive feedback from physicians," he said.

The American Medical Association didn't compile regional or state data on insurers' local practices.

Don Havins, executive director of the Clark County Medical Society, said it's too early to gauge UnitedHealth's local payment practices, but he said the AMA's report raises concerns.

"Is (UnitedHealth's accuracy rate) going to be 61 percent in Nevada? If it is, that's not good," Havins said. Reimbursement issues will force physicians to either drop insurers or fit in more patients to compensate for a deficit in payments, he said.

Officials with Indianapolis-based Wellpoint, Anthem's parent company, didn't comment by press time.

Susan Pisano, a spokeswoman for Washington, D.C., trade group America's Health Insurance Plans, said it would be tough to discuss the results, because the association and insurers "weren't given the courtesy of seeing the data ahead of time."

But Pisano said insurers can't effectively process reimbursements if doctors submit incomplete or duplicate claims.

"For claims to be completed and processed accurately, two things need to happen: Health insurers need to do things right, and physicians need to do things right," Pisano said. "This is really a process that involves two parties."

If you're looking for the health care payer that's "beating everybody, hands down" for accurate results and transparent processes, then look no farther than Medicare, said Mark Rieger, chief executive officer of Sacramento, Calif.-based National Healthcare Exchange Services and one of the analysts who assembled the report card.

Sure, the federal program has "as many or more rules than anybody," Rieger said, but no other insurer came close to Medicare in its adherence to contracted payments. Medicare remitted the proper reimbursement 98.1 percent of the time, though it took the payer a median of 14 days to respond to filings.

Medicare pays effectively thanks to transparency, Rieger said. It posts its 1.2 million payment regulations in a standard format online, and it updates those rules at routine intervals, with as many as three months of advance notice for practitioners.

"(Medicare's practices) clearly produce a certain behavior in the marketplace that, in my opinion, can be replicated across other payers," Rieger said. "Medicare is not perfect, but it's dramatically better because of its lack of ambiguity. And ambiguity is more expensive than complexity."

Doctors spend up to 14 percent of their revenue fixing claims errors and tracking down the proper payments for their services, the AMA estimates. Those costs reach patients in the form of less time with doctors and higher medical charges. Reduce claims foul-ups, the theory goes, and patients will enjoy lower copays, smaller bills and more minutes with providers.

Patients and physicians can help improve claims handling, experts said.

Consumers can call their insurers' customer-service hot lines and ask for details on what's causing reimbursement lags, Dolan said. They can also alert their state insurance commissions to the association's findings.

Rieger urged physicians to dispute every incorrectly paid claim. Most physicians won't argue over a $10 error, Rieger said, but they need to point out every mistake. An increase in physician disputes over even the smallest blunders will create economic incentives for insurers to reduce errors.

Doctors can also upgrade billing processes. For example, Dolan's practice in Rochester, N.Y., now submits additional information with each surgical claim to ensure payers won't automatically deny and return filings because of incomplete details.

"Let's cooperate and kill this nightmare that is taking so much of our consumer dollars," Dolan said. "This hopefully will be the start of a collegial campaign to do that."

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.