APA
Analysis Of Independent Review Process Is Fundamentally Flawed
FOR IMMEDIATE RELEASE
August 16, 1999
CONTACT: Carrie B. Tydings
(202) 824-1786
e-mail: ctydings@hiaa.org
The following statement was released today by Chip Kahn, President of
the Health Insurance Association of America (HIAA):
HIAA has found that an analysis released by the American Psychological
Association (APA) of the independent review process contained in the
Senate Patients’ Bill of Rights Act (S-1344) is fundamentally flawed in
the data used, the assumptions made, and in the conclusions drawn. Based
on an HIAA actuarial analysis of the APA findings, we urge the APA to
retract the study.
The APA analysis is said to estimate "profit" that could be generated
if the health insurance industry systematically denied legitimate medical
expense claims in order to generate increased investment income. The
analysis makes significant errors in the way it used certain data. These
errors include using the wrong baseline for insured claim payments, as
well as attributing payment delays to the insurance industry when, in
fact, claimant delays in filing appeals account for 7 months of the time
period that is attributed to insurers.
The study also fails to recognize the benefits to consumers when
insurers review questionable claims. Estimates of fraudulent claims range
from 3-10 percent. Claim reviews help reduce the cost of improper payments
to providers. To completely eliminate claim denials would necessitate
premium increases that could add up to $110 per person annually.
The APA study stands on shaky data and makes erroneous and misleading
conclusions regarding claims review and denials. Further, it completely
ignores the benefits of the process to consumers in reducing the number of
fraudulent claims.
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