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# Experts estimate that insurance companies' tardiness in

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Director
Joined: 23 Sep 2007
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Experts estimate that insurance companies' tardiness in  [#permalink]

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29 Jun 2008, 19:31
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73% (02:14) correct 27% (02:20) wrong based on 859 sessions

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Experts estimate that insurance companies' tardiness in paying doctors for legitimate medical claims adds approximately 10 percent in overhead costs for physicians. Insurance companies counter that the tardiness sometimes results from billing errors made by the doctors themselves. Since dealing with these billing errors costs the insurance companies time and money, it is clear that insurance companies do not have a significant economic incentive to delay claim payments to doctors.

Which of the following pieces of information, if true, weakens the conclusion above?

a) Some doctors who submit accurate bills to insurance companies still receive tardy payments.

b) The cost to the insurance companies to process incorrect bills from doctors' offices is roughly equivalent to the increased costs that physicians accrue as a result of tardy payments from insurance companies.

c) A rising proportion of medical claims submitted by doctors to insurance companies are deemed illegitimate by those insurance companies.

d) The billing errors made by doctors' offices are typically very minor, such as the submission of a claim with an outdated patient home address.

e) The overhead costs incurred by doctors as a result of delayed insurance payments result in an increase in the premiums paid by consumers to health insurance companies that far exceeds any increase in the fees paid to doctors by insurance companies.
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Re: CR insurance companies' tardiness  [#permalink]

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29 Jun 2008, 20:10
gmatnub wrote:
Experts estimate that insurance companies' tardiness in paying doctors for legitimate medical claims adds approximately 10 percent in overhead costs for physicians. Insurance companies counter that the tardiness sometimes results from billing errors made by the doctors themselves. Since dealing with these billing errors costs the insurance companies time and money, it is clear that insurance companies do not have a significant economic incentive to delay claim payments to doctors.

Which of the following pieces of information, if true, weakens the conclusion above?

a) Some doctors who submit accurate bills to insurance companies still receive tardy payments.

b) The cost to the insurance companies to process incorrect bills from doctors' offices is roughly equivalent to the increased costs that physicians accrue as a result of tardy payments from insurance companies.

c) A rising proportion of medical claims submitted by doctors to insurance companies are deemed illegitimate by those insurance companies.

d) The billing errors made by doctors' offices are typically very minor, such as the submission of a claim with an outdated patient home address.

e) The overhead costs incurred by doctors as a result of delayed insurance payments result in an increase in the premiums paid by consumers to health insurance companies that far exceeds any increase in the fees paid to doctors by insurance companies.

IMHO E,
E weakens the conclusion that "insurance companies do not have a significant economic incentive to delay claim payments to doctors."
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Re: CR insurance companies' tardiness  [#permalink]

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30 Jun 2008, 16:57
E for me..

basically says insurance companies actually do make a lot of money by skewing up the payments..i.e higher premium..
Manager
Joined: 25 Nov 2006
Posts: 122
Re: CR insurance companies' tardiness  [#permalink]

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30 Jun 2008, 18:48
Must be E,

Clearly there is a motive for insurance companies to be tardy in their payments. It raises premiums > amount paid to doctors which would mean greater profits.
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Joined: 30 Dec 2008
Posts: 21
Re: Experts estimate that insurance companies' tardiness in  [#permalink]

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15 Aug 2009, 05:24
So you're looking for something that says: insurance companies have an alternate reason for not paying the bills with errors on time. That reason will most likely be associated with costs/revenues.

A. that may be true, but it doesn't really matter for the argument at hand. The argument is centered around billing errors and does not concern correct bills.

B. well, that's just bad news for everyone. Doesn't stand out as a plus for the insurance company.

C. again, that could be right, but it doesn't have anything to do with the billing errors and late payments

D. if that's the case, then the insurance companies are down-right stupid for wasting energy and money on such minor things.

E. is spot-on, because delays in payment ultimately translate into higher revenues for insurance companies. This is indeed an alternate explanation that involves profit.

As a side note: with most multiple choice questions I've seen, the correct answer will likely be the longest one. It doesn't always apply, but I've decided to make it a personal rule to pick the longest when nothing else makes sense....
Manager
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Re: Experts estimate that insurance companies' tardiness in  [#permalink]

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15 Aug 2009, 23:29
DanaJ wrote:
As a side note: with most multiple choice questions I've seen, the correct answer will likely be the longest one. It doesn't always apply, but I've decided to make it a personal rule to pick the longest when nothing else makes sense....

Thanks for the side note.. let me see if it works..
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Re: Experts estimate that insurance companies' tardiness in  [#permalink]

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17 Aug 2009, 17:16
E...the only one that really provides significant economic incentives for the insurance company to delay the payments, which refutes the conclusion of the passage
Manager
Joined: 14 Nov 2008
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Experts estimate that insurance companies' tardiness in  [#permalink]

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01 Sep 2013, 11:18

OFFICIAL EXPLANATION:

The conclusion of the argument is that insurance companies do not have a significant economic incentive to delay claim payments to doctors. To weaken this conclusion, an answer choice must provide some significant economic incentive for insurance companies to be tardy in paying doctors for legitimate medical claims.

(A) While the fact that some doctors who submit accurate bills to insurance companies still receive tardy payments seems to indicate that there must be something other than errors causing delayed payments, it fails to prove that the insurance company has an economic incentive to deliberately delay claim payments to doctors. For example, this fact could simply indicate that the insurance companies are inefficient at handling all of their paperwork.

(B) This choice compares costs insurance companies must absorb due to incorrect bills to costs physicians must absorb due to tardy payments. However, this information is irrelevant to establishing an economic incentive for insurance companies to delay claim payments to doctors.

(C) The argument is focused on the payment of legitimate claims; the rising proportion of illegitimate claims does not establish a clear economic incentive for insurance companies to delay payments of legitimate claims.

(D) The types of billing errors made by doctors' offices does not establish any economic motive for insurance companies to make a practice of delaying payments to doctors.

(E) CORRECT. This choice articulates a logical chain that establishes a clear economic motive for insurance companies to be tardy in paying doctors for legitimate medical claims. If insurance companies delay payments to doctors, this results in a 10 percent increase in overhead costs for physicians. These costs ultimately result in higher fees that doctors charge to insurance companies. Insurance companies, in turn, raise the premiums they charge consumers for health coverage. This choice states that the insurance companies increase their fees to consumers far more than the doctors increase their fees to insurance companies, enabling the insurance companies to pocket the difference; therein lies the economic motive for insurance companies to be tardy in paying doctors for legitimate medical claims.
Manager
Joined: 03 Dec 2012
Posts: 186
Re: Experts estimate that insurance companies' tardiness in  [#permalink]

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15 Nov 2013, 00:27
Yep E seems to be right. Although C isn't a bad contender too only that it's not as strong as E.
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Re: CR Revision: Experts estimate that insurance companies’ tardiness in  [#permalink]

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29 Jan 2016, 17:48
4
Experts estimate that insurance companies’ tardiness in paying doctors for legitimate medical claims adds approximately 10 percent in overhead costs for physicians. Insurance companies counter that the tardiness sometimes results from billing errors made by the doctors themselves. Since dealing with these billing errors costs the insurance companies time and money, it is clear that insurance companies do not have a significant economic incentive to delay claim payments to doctors.

Which of the following pieces of information, if true, weakens the conclusion above?

First Of All,we should note what the conclusion is..The conclusion is: Since dealing with these billing errors costs the insurance companies time and money, it is clear that insurance companies do not have a significant economic incentive to delay claim payments to doctors. ...So we actually need an option which will weaken this argument which means that we need an option which tells us that the insurance companies do have a significant economic incentive in delaying claim payments to doctors...Lets look at the options right then

A. Some doctors who submit accurate bills to insurance companies still receive tardy payments...Doesn't tell us whether the insurance companies do have any economic incentive for making tardy payments..Not the answer we are looking for

B. The cost to the insurance companies to process incorrect bills from doctors’ offices is roughly equivalent to the increased costs that physicians accrue as a result of tardy payments from insurance companies.This compares the cost of insurance companies from processing incorrect bills from doctors offices to the increased costs that physicians accrue as a result of tardy payments from insurance companies..Didn't tell us about any benefits that they might get from making tardy payments that will result in that exceeding the cost of processing incorrect bills from doctors offices..This is not the answer we are looking

C. A rising proportion of medical claims submitted by doctors to insurance companies are deemed illegitimate by those insurance companies.Actually also do not tell us anything about whether the insurance companies do have any significant economic incentive from making tardy payments

D. The billing errors made by doctors’ offices are typically very minor, such as the submission of a claim with an outdated patient home address.Totally irrelevant to the subject matter at hand

E. The overhead costs incurred by doctors as a result of delayed insurance payments result in an increase in the premiums paid by consumers to health insurance companies that far exceeds any increase in the fees paid to doctors by insurance companies.Bingo,their tardiness in making payments is actually bringing them some economic benefits which is the increase in the premiums paid to them and these premiums far exceed the increase in the fees paid to doctors by insurance companies..This is the correct answer

A KUDOS WOULDN'T HURT IF YOU FIND THIS EXPLANATION HELPFUL!!!I WILL SURELY APPRECIATE IT..
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CR Revision: Experts estimate that insurance companies’ tardiness in  [#permalink]

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30 Jan 2016, 04:53
Conclusion: it is clear that insurance companies do not have a significant economic incentive to delay claim payments to doctors.

Which of the following pieces of information, if true, weakens the conclusion above?

To weaken the conclusion
Pre thinking: We must prove that the insurance companys have a secret economic incentive which they get during this bill processing time window. May be something happens or that actually profits the company while they delay.

Among the close answers (A) & (E)

A. Some doctors who submit accurate bills to insurance companies still receive tardy payments.
-It does not talk about economic benefits. If anything it negates a premise to some extent but not touching the conclusion about economic incentive

E. The overhead costs incurred by doctors as a result of delayed insurance payments result in an increase in the premiums paid by consumers to health insurance companies that far exceeds any increase in the fees paid to doctors by insurance companies.

- It explores the window of opportunity that insurance companies get when they delay the payments. The bill processing delay intern increases the premiums paid by consumers and therefore it profits the insurance companies

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Re: CR Revision: Experts estimate that insurance companies’ tardiness in  [#permalink]

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31 Jan 2017, 12:51
souvik101990 wrote:
Experts estimate that insurance companies’ tardiness in paying doctors for legitimate medical claims adds approximately 10 percent in overhead costs for physicians. Insurance companies counter that the tardiness sometimes results from billing errors made by the doctors themselves. Since dealing with these billing errors costs the insurance companies time and money, it is clear that insurance companies do not have a significant economic incentive to delay claim payments to doctors.

Which of the following pieces of information, if true, weakens the conclusion above?

A. Some doctors who submit accurate bills to insurance companies still receive tardy payments.

B. The cost to the insurance companies to process incorrect bills from doctors’ offices is roughly equivalent to the increased costs that physicians accrue as a result of tardy payments from insurance companies.

C. A rising proportion of medical claims submitted by doctors to insurance companies are deemed illegitimate by those insurance companies.

D. The billing errors made by doctors’ offices are typically very minor, such as the submission of a claim with an outdated patient home address.

E. The overhead costs incurred by doctors as a result of delayed insurance payments result in an increase in the premiums paid by consumers to health insurance companies that far exceeds any increase in the fees paid to doctors by insurance companies.

The conclusion of the argument is that insurance companies do not have a significant economic incentive to delay claim payments to doctors. To weaken this conclusion, an answer choice must provide some significant economic incentive for insurance companies to be tardy in paying doctors for legitimate medical claims.

(A) While the fact that some doctors who submit accurate bills to insurance companies still receive tardy payments seems to indicate that there must be something other than errors causing delayed payments, it fails to prove that the insurance company has an economic incentive to deliberately delay claim payments to doctors. For example, this fact could simply indicate that the insurance companies are inefficient at handling all of their paperwork.
(B) This choice compares costs insurance companies must absorb due to incorrect bills to costs physicians must absorb due to tardy payments. However, this information is irrelevant to establishing an economic incentive for insurance companies to delay claim payments to doctors.
(C) The argument is focused on the payment of legitimate claims; the rising proportion of illegitimate claims does not establish a clear economic incentive for insurance companies to delay payments of legitimate claims.
(D) The types of billing errors made by doctors' offices does not establish any economic motive for insurance companies to make a practice of delaying payments to doctors.
(E) CORRECT. This choice articulates a logical chain that establishes a clear economic motive for insurance companies to be tardy in paying doctors for legitimate medical claims. If insurance companies delay payments to doctors, this results in a 10 percent increase in overhead costs for physicians. These costs ultimately result in higher fees that doctors charge to insurance companies. Insurance companies, in turn, raise the premiums they charge consumers for health coverage. This choice states that the insurance companies increase their
fees to consumers far more than the doctors increase their fees to insurance companies, enabling the insurance companies to pocket the difference; therein lies the economic motive for insurance companies to be tardy in paying doctors for legitimate medical claims.
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Re: Experts estimate that insurance companies' tardiness in  [#permalink]

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22 Apr 2017, 17:01
yup, the answer should be E.
A is not enough to weaken the argument, because both expert and the insurance companies can still be true. A only addresses that experts are right in some cases.
C and D are out of scope.
B is just a fact if it is true.
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Experts estimate that insurance companies' tardiness in  [#permalink]

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05 Aug 2017, 00:12
1
a) Some doctors who submit accurate bills to insurance companies still receive tardy payments. - The word "SOME" does not weakens the conclusion

b) The cost to the insurance companies to process incorrect bills from doctors' offices is roughly equivalent to the increased costs that physicians accrue as a result of tardy payments from insurance companies. - Opposite Answers. It strengthen the fact that there is economic benefit to the insurance company

c) A rising proportion of medical claims submitted by doctors to insurance companies are deemed illegitimate by those insurance companies. - At best irrelevant. At worst strengthen the fact that insurance companies are taking time to figure out the legitimate claims.

d) The billing errors made by doctors' offices are typically very minor, such as the submission of a claim with an outdated patient home address. - Even if it is minor- does not weakens the claim made by insurance company.

e) The overhead costs incurred by doctors as a result of delayed insurance payments result in an increase in the premiums paid by consumers to health insurance companies that far exceeds any increase in the fees paid to doctors by insurance companies.- Correct. Shows that insuranc company delays the payment to receive larger premiums and hence garner economic benefits out of their tardiness.

Press Kudos if you like this answer!! .
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Re: Experts estimate that insurance companies' tardiness in  [#permalink]

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19 Sep 2018, 06:43
Experts estimate that insurance companies' tardiness in paying doctors for legitimate medical claims adds approximately 10 percent in overhead costs for physicians. Insurance companies counter that the tardiness sometimes results from billing errors made by the doctors themselves. Since dealing with these billing errors costs the insurance companies time and money, it is clear that insurance companies do not have a significant economic incentive to delay claim payments to doctors.

Which of the following pieces of information, if true, weakens the conclusion above?

a) Some doctors who submit accurate bills to insurance companies still receive tardy payments.
Explanation: Some? How about the rest? If the rest is of a higher percentage, then it strengthens the argument - INCORRECT

b) The cost to the insurance companies to process incorrect bills from doctors' offices is roughly equivalent to the increased costs that physicians accrue as a result of tardy payments from insurance companies.
Explanation: IRRELEVANT

c) A rising proportion of medical claims submitted by doctors to insurance companies are deemed illegitimate by those insurance companies.
Explanation: Whats' this rising proportion of medical claims. We need to know at what pace is it rising in order to see whether it weakens or strengthen the passage. - INCORRECT

d) The billing errors made by doctors' offices are typically very minor, such as the submission of a claim with an outdated patient home address.
Explanation: Strengthening the argument - INCORRECT

e) The overhead costs incurred by doctors as a result of delayed insurance payments result in an increase in the premiums paid by consumers to health insurance companies that far exceeds any increase in the fees paid to doctors by insurance companies.
Explanation: Consumers keep paying the premiums due to delay in insurance and thereby insurance company takes more money from the clients. - CORRECT

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Re: Experts estimate that insurance companies' tardiness in  [#permalink]

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27 Nov 2019, 00:47
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Re: Experts estimate that insurance companies' tardiness in   [#permalink] 27 Nov 2019, 00:47
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