Switch from manual to electronic transactions could save healthcare billions: 6 findings

The U.S. healthcare system can save $8 billion annually by reducing the use manual administrative processes for basic transactions, according to the 2015 CAQH Index.

The CAQH Index, released March 30, measures adoption rates, cost and savings associated with the shift from manual to electronic business HIPAA transactions between health plans and healthcare providers, according to a news release. Manual transactions include resource-intensive processes such as phone calls to verify patient coverage or mailing claims and paper checks.

The 2015 CAQH Index is based on data submitted by U.S. healthcare providers and commercial health plans, which represented more than 118 million covered lives, or nearly half of the commercially insured U.S. population, and more than 4 billion transactions in 2014.

Here are six findings from the report.

1. The report shows the average rate of adoption of fully electronic transactions varies significantly among the measured transactions:

  • Claim submission – 93.8 percent
  • Eligibility and benefit verification – 70.5 percent
  • Claim payment – 61.4 percent
  • Claim status inquiry – 56.5 percent
  • Remittance advice – 49.6 percent
  • Coordination of benefits claims – 48.7 percent
  • Prior authorization – 10.2 percent
  • Referral certification – 6.2 percent

2. The report analyzes trends from 2012 through 2014 for six of the transactions. Based on this analysis of three-year trends, substantially more transactions were conducted electronically in 2014 than in previous years.

3. According to the 2015 CAQH Index, the healthcare industry continues to handle high volumes of these transactions manually, despite increasing use of electronic transactions for eligibility and benefit verifications and claim status inquiries. The report shows healthcare providers could save more than $5 billion annually by using automated processes to check patients' eligibility and benefits.

4. On average, manual transactions cost providers and plans $2 more each than automated electronic transactions.

5. The 2015 CAQH Index also includes data about dental plans and providers, representing more than 92 million covered lives and 440 million transactions. The report found that, on average, adoption of electronic transactions is 30 percent lower for the dental industry compared to the broader medical healthcare industry.

6. The report calls for an evaluation of federal regulations and strategic plans to assess their sufficiency to support broad adoption of electronic administrative transactions. It also urges targeted healthcare industry-led efforts to reduce adoption barriers for health plans and healthcare providers, perhaps with financial incentives or contractual requirements.

 

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