By Ronale Tucker Rhodes, MS
Remember the movie John Q. in which Denzel Washington plays the father of a young boy who takes a downtown Chicago emergency room hostage when he learns that the heart transplant his son needs won’t be performed because his health insurance doesn’t cover it? That may seem to many people like a pretty drastic measure to take. But, is it? With the countless refusals by health insurers to cover immune globulin (IG) treatments, I’m betting that many of you have felt like going to extreme measures as well.
It will interest you to know, then, that you’re not alone. According to the American Medical Association’s (AMA) annual National Health Insurer Report Card, one in five health insurance claims is wrongly handled, creating billions of dollars in unnecessary administrative costs, slowing down payments to doctors and frustrating patients. Mishandling of claims includes those processed with errors resulting in them being underpaid, overpaid or incorrectly unpaid .
The main problem appears to be that “each insurer uses different rules for processing and paying medical claims, which cause complexity, confusion and waste,” says former AMA President Dr. Nancy Nielsen. “Simplifying the administrative process with standardized requirements will reduce unnecessary costs in the health system.”
Eight companies were evaluated in the report, with Conventry Health Care rated the best with an accuracy rate for processing and paying claims of 88.4 percent, while Anthem Blue Cross Blue Shield rated the worst with a score of only 74 percent. The overall accuracy rate was 80 percent . Each percentage point improvement represents $778 million in savings in unnecessary administrative costs.
According to the report, denials of insurance claims remained a sore point for physicians who called for insurers and employers to provide clarity about what is and what is not covered. The percentage of claims denied ranged from 0.7 percent to 4.5 percent. For John Q.’s son or for those who need a life-saving treatment such as IG, claims denial can have life-threatening results.
We know that many of you have some frightening insurance claims denial stories. We also know that in many, if not most, cases, those denials were reversed simply because errors in claims processing were resolved. Supporting standardization of claims requirements seems like such a simple solution, doesn’t it?