Study: Striking Differences in Billing Complexity Across Health Insurers

Researchers find that disputed bills amount to $54 billion annually across all health insurers.

Billing complexity among US health insurers varies significantly, with surprising results in the level of complexity among some insurers, according to a new study published in Health Affairs.

Despite the conventional notion that private insurers should be more difficult for physicians to bill, the study’s findings indicate that Medicaid may be the most challenging.

The study, led by Vancouver School of Economics (VSE) researchers, measured the complexity of billing Medicare, Medicaid, and private insurers while controlling for differences in physicians’ billing ability and complexity of the patient. According to the study, the researchers evaluated 44 million claims from 68,000 physicians, worth a total of $8.4 billion.

The study measured complexity using multiple metrics: the rates of claim denial and non-payment, and the number of interactions required for the physician and insurer to resolve. The amount of money disputed between the physician and insurer was also measured.

According to the findings, Medicaid was 2 to 3 times as difficult as Medicare or private insurance for physicians to bill. Medicaid managed care programs had slightly lower billing complexity than state-run fee-for-service Medicaid. Additionally, the researchers found that billing complexity has decreased over time, especially for Medicaid. This may encourage more physicians to treat Medicaid patients, the researchers noted.

Overall, the researchers estimated that disputed bills amount to $54 billion annually across all insurers, and $11 billion could be saved if all billing efficiency were improved to the best level observed in the data, according to the study.

“For a health care system that spends so much money on administrative costs, from 15% to 30% according to previous studies, this decline is an important cause for optimism,” Joshua Gottlieb, one of the study’s authors and associate professor at VSE, said in a press release. “Further work needs to be done to explore the reasons for this change.”


Gottlieb JD, Shapiro AH, Dunn A. The complexity of billing and paying for physician care. Health Affairs, 2018; 37 (4): 619. Doi: 10.1377/hlthaff.2017.1325

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