If you think that your health insurance company makes mistakes on your health insurance claims claims all the time, well, you might be right. The American Medical Association‘s fourth annual check-up of health insurers and the systems they use to manage and pay claims finds that 1 in 5 health insurance claims is processed incorrectly by the nation’s biggest health insurers. And the problem’s not getting better. In fact, the processing error rate for health insurance claims is actually up 2 percentage points over last year.
According to the AMA’s National Health Insurer Report Card, the general health insurance industry had about an error rate of 19.3% in processing health insurance claims, but there was also a big disparity among health insurance companies. UnitedHealth made the best showing with an accuracy rate of 90.23% in processing health insurance claims, followed by Regence Blue Cross Blue Shield with an accuracy rate of 88.41% and Health Care Services with 87.04%. We can’t help but wonder about the health insurance carrier caught bringing up the rear, though. According to the AMA, Anthem Blue Cross Blue Shield was accurate in processing only 61.05% of its health insurance claims, only about 3 in 5.
These mistakes in processing health insurance claims don’t just cost Americans in tears and frustration, but real dollars and cents. Last year, the AMA estimated that $777.6 million in unnecessary administrative cost could be saved if the health insurance industry improved claims processing accuracy by one percent and increasing the health insurance industry’s accuracy rating to 100 percent would save up to $15.5 billion annually that could be better used to enhance patient care and help reduce overall health care costs.
What are the administrative costs, you may ask? The health insurance industry currently spends as much as $210 billion dollars annually in processing health insurance claims. Doctors aren’t exempt from the pain either. One recent study found that docs spend the equivalent of five weeks a year trying to battle through health insurance red tape, and have to use 14% of their revenue on health insurance paperwork.
If it Happens to You and Your Health Insurance Claim is Denied, What Can You Do?
• Review all Your Records and Call Your Insurance Company. The customer service representative who answers the phone should be able to tell you why your claim was denied. If the claim was denied due to an administrative error, you may be able to resolve the issue on the phone or with some minimal follow-up.
• Get Help. If your insurance is through an employer-based group plan, enlist the help of your human resources department to make inquiries. If HR departments receive a lot of complaints about an insurance company, they are more likely to switch plans, so insurance companies are more likely to take them seriously.
• Ask Your Doctor to Try Again. Tell your doctor that your claim has been denied, and ask them if they can reword their paperwork. Some wording will cause a knee-jerk denial from insurance companies (i.e. anything that related to “cosmetic” procedures). Sometimes a tweak of the paperwork can make a world of difference.
• Request a Formal Appeal. Most plans have guidelines as to how to do this and some have specific forms, but generally you will need to submit a letter requesting to have your claim looked at and supplementary paperwork about the treatment you received. Most plans limit the window you have to make a formal appeal, so don’t delay.
• Don’t Give Up! You may have to make multiple appeals so do not get discouraged. It’s in the insurance company’s interests to hold onto your money if they can, so keep after it.
• Go to Your State’s Department of Insurance. If you think you have a valid claim and appealing to your insurance company is getting you nowhere, you should go to your State’s Department of Insurance. Every state has a different process of helping consumers, but you should take advantage of all resources available to you.
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