AMA Reviews Costs of Physician Reimbursement

The American Medical Association has looked at the added costs to the health care system caused by difficulties in receiving reimbursement. The Los Angeles Times reports:

Insurance companies often fail to properly reimburse doctors, needlessly adding more than $200 billion a year to the nation’s healthcare tab, the American Medical Assn. said Monday.

An analysis of 3 million medical claims over a six-month period beginning in October also found that doctors in the U.S. spend 14% of the fees they receive from insurers and Medicare on the process of collecting those fees, the AMA said in a report issued at its annual meeting in Chicago.

While all administrative expenses will never be eliminated, cutting down this 14% figure will make a difference in overall health care costs. The AMA compared various insurance companies and Medicare with regards to how well they pay claims. Based upon personal experience, I was not at all surprised by who came out on top and who performed poorly:

For example UnitedHealthcare, whose parent owns California’s PacifiCare, paid physicians the contracted fee 62% of the time. By comparison, Aetna Inc. paid the contracted fee 71% of the time and Medicare paid the set fee 98% of the time.

The article provides a good example of the type of nonsense companies such as UnitedHealthcare specialize in as they often fail to pay claims:

UnitedHealthcare spokesman Gregory Thompson said, “Data show there is often a significant lag time between when services are provided and physician claims are submitted.”

If the fault was really do to physicians then we should be seeing equal delays in payment from all payers, as opposed to finding that certain companies, such as UnitedHealthcare, are paying much more poorly than others. The manner in which Medicare often outperforms private payers is one reason why many physicians, who might have had worries about “socialized medicine” in the past, are now open to single payer systems. Even though Medicare has its problems, a payer who pays 98% of the time is far easier to work with than one who only pays 62% of the time.

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