Patients Are Stuck With a Big Chunk of the Medical Bill

Patients are responsible for nearly one-quarter of their medical bills through copays, deductibles, and coinsurance, according to a study by the American Medical Assn. (AMA). During Feb. and March of this year, patients paid 23.6% of the amount that health insurers set for paying physicians. The AMA is calling on insurers to give physicians the tools to automatically determine a patient’s payment responsibility prior to treatment.

The AMA also unveiled its new Administrative Burden Index (ABI), which ranks commercial health insurers according to how much unnecessary cost they contribute to the billing and payment of medical claims. Avoidable errors, inefficiency, and waste in medical claims resulted in an average ABI cost per claim of $2.36 for physicians and insurers. Cigna had the best ABI cost per claim of $1.25, or 47% below the commercial insurer average.

The AMA estimates that insurers could save the system $12 billion a year if they used automated systems for processing and paying medical claims. This savings represents 21% of total administrative costs that physicians spend to ensure accurate payments from insurers.

Commercial health insurers’ error rates on paid medical claims have dropped significantly – from nearly 20% in 2010 to 7.1% in 2013. While they have made dramatic improvements, commercial insurers could have saved more than $43 billion if they had consistently paid claims correctly since 2010. UnitedHealthcare led commercial health insurers with an accuracy rating of 97.52%.  Medicare led all insurers with an accuracy rating of 98.10%.

Medical claim denials dropped 47% in 2013 after a sharp spike among most commercial health insurers in 2012. The denial rate for commercial health insurers went from 3.48% in 2012 to 1.82% in 2013. Cigna had the lowest denial rate at .54%, while Medicare had the highest denial rate at 4.92%.

Health insurers have improved response times to medical claims by 17% from 2008 to 2013. Humana had the fastest median response time at six days while Aetna had the slowest at 14 days. Medicare’s median response time of 14 days is has not changed from 2008.

Health insurers have improved the transparency of rules used to edit medical claims by 37% from 2008 to 2013. Reducing the use of undisclosed payer-edits reduces the administrative costs of reconciling medical claims. For more information, visit

Last Updated 06/29/2022

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