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TECHNOLOGY

Increased adoption of HIPAA electronic claims-related processes can save more than $8 billion annually

The U.S. health care system is unnecessarily spending billions of dollars each year by continuing to use manual administrative processes for basic transactions, according to the 2015 CAQH Index®, a report from CAQH, a non-profit alliance and leader in creating shared initiatives to streamline the business of health care.

Despite steady increases in industry adoption of HIPAA electronic administrative transactions, the report emphasizes a remaining opportunity to save more than $8 billion each year.

The CAQH Index is the only industry source that measures adoption rates, cost, and savings associated with the shift from manual to electronic business HIPAA transactions between health plans and health care providers. 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. health care providers and commercial health plans, which represented over 118 million covered lives, or nearly half of the commercially insured U.S. population, and more than 4 billion transactions in 2014.

The report shows that 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 (COB) claims – 48.7 percent
  • Prior authorization – 10.2 percent
  • Referral certification – 6.2 percent

“With this solid understanding of where we are today, our industry has a real opportunity to fill some of these gaps and improve operations by sharing best practices,” says John Bialowicz, manager of Electronic Business Interchange Group at Blue Cross Blue Shield of Michigan. “The Index clearly illustrates the value of transitioning to fully electronic transactions.”

The 2015 CAQH Index is the third annual report, enabling an analysis of trends from 2012 through 2014 for six of the transactions. Three year trends show that substantially more transactions were conducted electronically in 2014 than in previous years. As in previous reports, the 2015 Index found significant, unnecessary costs resulting from large volumes of manual transactions that could be handled electronically.

For example: Despite increasing use of electronic transactions for eligibility and benefit verifications and claim status inquiries, the industry continues to handle high volumes of these transactions manually. Health care providers alone could save more than $5 billion annually by using automated processes to check patients’ eligibility and benefits.

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


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