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What’s Better…4% Error Rate or 20% Error Rate?

House Republicans have voted twice to end Medicare and put private health insurance companies in charge of seniors’ health care. Republicans have falsely claimed that putting private insurers in charge will reduce costs. This new report from the American Medical Association (AMA) highlights one of the reasons why the Republican Medicare-ending budget increases health care costs – private insurers have a payment error rate of nearly 20%, compared to a 4% error rate for Medicare:

National Journal – AMA: Inaccurate Claims Payment Increase Among Private Insurers

The rate of inaccurate claims payments has increased among the leading private health insurers, according to the latest American Medical Association’s National Health Insurer Report Card.

The annual report released Monday found commercial health insurance companies have an average claims-processing error rate of 19.3 percent — up 2 percent from last year’s report — costing the health care system an estimated $1.5 billion in unnecessary administrative fees.

“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 Dr. Barbara McAneny, an oncologist in Albuquerque, N.M., said in a statement. “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.”…

Medicare, the public health care system for senior citizens and people with disabilities, maintained an accuracy level of 96 percent both years.

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