$40 Million Backlog In Health Insurance Claims

9 January 2002

Healthcare providers and policy holders are currently out of pocket by an estimated $40 million dollars as a backlog of unprocessed claims continues to grow at Southern Cross Healthcare, New Zealand’s major health insurer.

Commenting on this today, the New Zealand Private Hospitals Association says that Southern Cross management published an open letter last month citing problems to do with the transition to a new computer system that were causing delays of four to six weeks in claims processing.

NZPHA Executive Director, Lesley Clarke, says that unfortunately things have not improved - surgical claims now taking seven weeks to process while medical claims are up to a six week turn around.

“This is creating a major cash flow issue for hospitals and yet Southern Cross is unwilling to take any steps to alleviate the situation. About 70% of people with private health insurance are Southern Cross members, therefore they account for a very large proportion of all private hospital admissions. With millions of dollars outstanding, hospitals and other providers are finding it impossible to continue to carry the increasing level of debt.”

Ms Clarke says that she expects some hospitals may have no choice but to step up their debt recovery procedures and review payment policies. “Of course we appreciate that many people would find it difficult to pay ‘up front’ while they wait for Southern Cross to process their claims, but on top of other financial pressures there is only so much leeway hospitals can give.”

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