Increasing number of insurer errors in the US healthcare system provides a huge potential for reducing administrative costs and hence a great need for increasing the degree of accuracy.

Industry Standards State

  • Health insurers process at least 1 out of 5 medical claims inaccurately
  • Entire health insurance industry’s accuracy rate for processing and paying claims = 80%
  • Claim processing expenditure = approximately $210 bn. per year
  • Improving claim processing accuracy by only 1% = savings of nearly $777.6 mn. in unnecessary administrative cost
  • Improving accuracy & completing getting rid of errors = saving of nearly $15.5 bn. each year


Unfortunately physicians and even patients end up covering the cost of these errors-

  • Physicians time spent on health insurer red tape = 5 weeks annually
  • Physicians revenue diverted on administrative tasks to ensure accurate payments = nearly 14%

Why health insurer errors occur?

Insurers skilled at processing codes at times may dig out differences and hence find reasons to deny or delay payment
Increased complexity, confusion and waste as each insurer applies different rules for processing and paying medical claims
Lack of standardized procedures or “claim edit library,” hence providers require to submit claim information and respond to error codes in a different manner for every insurer they deal with
Current medical claims processing approach is still for the most part- labor-intensive, error-prone and fragmented

Additional administrative costs due to initial payment inaccuracies include- multiple data entries, audits and collections expenses. Expenditure on each claim audited and appealed is generally anywhere between $14 and $25, hence making it imperative for physicians to avoid such costly errors.

How to avoid these costly errors? --- finding a solution!

The simplest solution would be a single transparent set of processing and payment rules for the health insurance industry resulting in increased savings, time and resources along with reduced paperwork. However in a multiple payer industry consisting of varied commercial payers this would be highly difficult to achieve. Few other steps physicians can take to remedy this condition to a certain degree are-

  • A simplified administrative process with standardized requirements to help reduce unnecessary costs and requirement of maintaining a costly claims management system
  • Adopt a high-quality electronic billing and payment systems that can cut down on processing errors and help avoid discrepancies that arise between charges submitted by a provider and an insurer’s catalogue of covered services and interventions
  • Utilize the various HIPAA transactions available to perform successful low-cost audit and appeal processes
  • Get constantly updated on the claims and billing processes, including the medical payment policies and procedures used by the person submitting the claims

Additionally, the physician can get familiar with -

  • Various ways in which the health insurer can delay, deny or incorrectly pay a claim
  • Ascertaining the claim’s status with the health insurer
  • Usage of electronic HIPAA transactions to improve accuracy of claims submission
  • Preparation and submission of an appeal when required

Finding a cost –effective solution with MBC

As it takes time and resources to help avoid these errors physicians may prefer opting for a specialized billing service. MBC billing experts apply the following to help reduce chance of errors-

  • Administrative processes – help physicians with areas of administration which require up gradation and training and advice on the right software suited for their set-up
  • Accuracy- regularly review and audit all the claims to ensure they are complete and accurate, to help identify and address in advance underpayments and denials
  • Timeliness –process all claims on time besides applying updated medical policies to ensure least discrepancies with the payers
  • Transparency- provide regular reports to physicians; besides constantly studying vital policies and information of insurer fee schedules and also utilize HIPAA compliance resulting in payment consistency and fewer payment disputes
  • Insurer Contracts- with requisite industry know-how help physicians correctly identify a health insurer’s contractual requirements for claims submission, including associated fee schedules, medical payment policies, available claim edits and other payment rules prior to signing any contracts
  • Regular follow ups & appeal- for all inappropriately paid and denied claims initiate a claim appeal, when appropriate, hence making an effort to correct the health insurer’s inaccuracy


MBC billing services = Increased accuracy + reduced costs = Increased revenue!


MBC the largest consortium of billers and coders has been providing medical billing services for over a decade now; meeting necessary requirements for medical necessity and claims stipulations

Published By - Medical Billers and Coders
Published Date - Jul-31-2013 Back

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