New AMA Health Insurer Report Card Finds Increasing Inaccuracy in Claims Payment

The average claims-processing error rate is up 2% from 2010.

June 20, 2011
American Medical Association

ChicagoThe overall rate of inaccurate claims payments increased since last year among leading commercial health insurers, according to American Medical Association’s (AMA) fourth annual National Health Insurer Report Card. Claims-processing errors by health insurance companies waste billions of dollars and frustrate patients and physicians.

According to the AMA’s latest findings, commercial health insurers have an average claims-processing error rate of 19.3 percent, an increase of two percent compared last year. The increase in overall inaccuracy represents an extra 3.6 million in erroneous claims payments compared to last year, and added an estimated $1.5 billion in unnecessary administrative costs to the health system. The AMA estimates that eliminating health insurer claim payment errors would save $17 billion.

"A 20 percent error rate among health insurers represents an intolerable level of inefficiency that wastes an estimated $17 billion annually,” said AMA Board Member Barbara L. McAneny, M.D. “Health insurers must put more effort into paying claims correctly the first time to save precious health care dollars and reduce unnecessary administrative tasks that take time and resources away from patient care."

"A 20 percent error rate among health insurers represents an intolerable level of inefficiency...." —Barbara L. McAneny, M.D.

Most of the health insurers measured by the AMA failed to improved their accuracy rating since last year. UnitedHealthcare was the only commercial health insurer included in this year’s report card to demonstrate an improvement in claims-processing accuracy. UnitedHealthcare came out on top of seven leading commercial health insurers with a accuracy rating of 90.23 percent. Anthem Blue Cross Blue Shield had scored the worst of those measured with an accuracy rating of 61.05 percent.

To encourage a more efficient claims payment system, the AMA’s National Health Insurer Report Card provides an annual check-up for the nation’s largest health insurers and benchmarks the systems they use to manage, process and pay claims. Key findings from this year’s report card include:

Insurer Non-payment.

Physicians received no payment at all from commercial health insurers on nearly 23 percent of claims they submitted. There are many reasons a legitimate claim may go unpaid by an insurer. Claims may be denied, edited or deferred to patients. During Feb. and March of this year, the most common reason insurers didn’t issue a payment was due to deductible requirements that shift payment responsibility to patients until a dollar limit is exceeded. Real-time claims processing would save time and money.


Dramatic reductions in denial rates have occurred since last year at Aetna, Anthem Blue Cross Blue Shield, Health Care Service Corporation and UnitedHealthcare, which cut its denial rate by half to 1.05 percent. CIGNA maintained its industry leading low denial rate of .68 percent. Lack of patient eligibility for medical services continues to be the most frequent reason for denials.

Administrative Requirements.

For the first time the report card measured how frequently claims included information on insurers requiring physicians to ask permission before performing a treatment or service. CIGNA had the highest rate of claims requiring prior authorization, with more than six percent of claims indicating physician work associated with these requirements. A recent AMA survey of physicians indicated that insurers’ requirements to preauthorize care delayed or interrupted medical services, consumed significant amounts of time and complicated medical decisions.


In addition to measuring overall claims-processing accuracy, the report card examined how accurately insurers reported the correct contract fees to physicians. UnitedHealthcare has shown consistent improvement during the last four years in reporting correct contract fees. Other commercial health insurers showed progressive improvement over four years, but had slight declines this year. The exception was Anthem Blue Cross Blue Shield, which scored 14 percent lower on this measure than it did four years ago.


The report card found that CIGNA and Humana have cut their median claims response time in half during the last fours years. Response time varied for commercial health insurers from six to 15 median days.

Each insurer uses different rules for processing and paying medical claims

The National Health Insurer Report Card is the cornerstone of the AMA’s Heal the Claims Process campaign. Launched in June 2008, the campaign’s goal is to spur improvements in the industry’s billing process so physicians and patients are no longer at the mercy of a chaotic payment system.

"In spite of notable improvements by insurers in the four years since the AMA’s introduced the National Health Insurer Report Card, precious health care resources are wasted because each insurer uses different rules for processing and paying medical claims," said Dr. McAneny. “This variability adds no value to the health care system and only increases unnecessary administrative costs."

To help physicians better manage each insurer’s requirements for submitting claims, the AMA’s Practice Management Center offers easy-to-use online resources for preparing claims, following their progress and appealing them when necessary. The Practice Management Center’s library of education materials and practical tools are available online at:

Editor’s Note: The findings from the 2011 National Health Insurer Report Card are based on a random sampling of approximately 2.4 million electronic claims for approximately 4 million medical services submitted in February and March of 2011 to Aetna, Anthem Blue Cross Blue Shield, CIGNA, Health Care Service Corporation, Humana, The Regence Group, UnitedHealthcare and Medicare. Claims were accumulated from more than 400 physician practices in 80 medical specialties providing care in 42 states.