Automated claims processes could save industry $11.1B

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The healthcare industry in the U.S. could potentially save $11.1 billion through the wider use of automated claims-related business processes.

The industry has made some progress in automating claims-related business processes in recent years, but more opportunity remains, according to CAQH, a not-for-profit alliance, which released results of the fifth annual CAQH Index.

CAQH researchers say that the opportunity to save $11.1 billion is approximately $1.8 billion more than last year. It’s the second consecutive year that the research report has found increases in potential savings. Healthcare providers could achieve potential savings of $9.5 billion, while dental care providers could get $2 billion in annual savings.

The report shows increased use of some manual transactions—primarily via web portals—resulting in a reversal of gains made in using automated transactions in previous years. There’s been a 55 percent overall increase in the volume of overall manual transactions by providers compared with the previous year.

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By contrast, adoption of fully electronic transactions grew only slightly, or even declined for some transactions, such as prior authorizations, where a substantial increase in portal-based inquiries resulted in a decline in adoption of fully electronic transactions.

Among medical plans and providers, adoption levels of fully electronic transactions actually declined for claim payment and prior authorization, as did eligibility and benefit verification and claim status inquiry transactions by dental plans and providers.

Beyond adoption levels, the Index estimates the cost and time associated with conducting administrative transactions. On average, each manual transaction costs the industry $4.40 more than each electronic transaction and requires five more minutes of provider time.

"Understanding the industry cost of phone inquiries and paper or fax submissions reveals whether or not we are in line with the collective average," said Tab Harris, senior director of provider connectivity and EDI operations at Florida Blue. "Knowledge of the electronic cost validates our vendor expense, and understanding the provider's cost presents an opportunity to promote and facilitate self-service e-capabilities."

CAQH researchers conclude that the relatively slow, incremental progress reported in recent years of the transition from manual to electronic administrative transactions is no longer sufficient. They propose that industry participants strongly support provider access to robust electronic data interchange systems and understand the reasons behind the rising use of portals.

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