The healthcare industry has made moderate progress in the adoption of electronic business transactions, but significant savings potential remains for healthcare providers and health plans, according to the 2017 CAQH Index released on June 14th. The fifth annual CAQH Index measures adoption, costs and provider labor time associated with the most common administrative transactions conducted between health plans and providers. These include verifying a patient’s insurance coverage, sending and receiving payment, inquiring about the status of a claim and obtaining prior authorization for care.
Here are 10 major takeaways from the 2017 CAQH Index.
1. Automating claims-related business transactions could save healthcare providers and health plans a combined total of $11.1 billion annually. This figure is a year-over-year increase of $1.8 billion and reflects a higher estimated national volume of administrative transactions—a 38 percent increase over the prior year.
2. The industry has made only modest progress in its transition from manual to fully electronic administrative transactions. Only one transaction—coordination of benefits claims—showed appreciable increase (see figure below).
3. Some of the increase in potential savings is due to a rise in online portal use, which drove a 55 percent overall increase in the volume of manual transactions by providers as compared to the prior year. Transactions through web portals are considered fully electronic for health plans, but manual for providers.
Portal use may slow the transition to fully electronic transactions, or it may ultimately serve as a bridge to adoption. More studies are needed to analyze the administrative burdens and costs of portal use.
4. Healthcare providers have adopted fully electronic transactions at a slower pace than health plans. A total of $9.5 billion of the remaining $11.1 billion in annual savings potential would accrue to medical providers.
5. The dental industry continues to lag behind the medical sector in the adoption of all transactions tracked. Claim status inquiry, payment and remittance advice for dental plans and providers all had lower levels of fully electronic adoption than medical.
6. Adoption levels of electronic business transactions vary greatly between organizations, with some entities reporting very high levels of adoption and others reporting comparatively low use for the same transaction.
7. On average, each manual transaction costs the industry $4.40 more than each electronic transaction. A provider practice could save more than $15 for a single medical claim by using all seven electronic transactions tracked by the CAQH Index.
8. On average, manual transactions require five minutes more than electronic transactions. A provider practice could save almost 40 minutes on average, per claim, by switching from manual to electronic for all seven transactions tracked.
9. Slow, incremental progress is no longer enough. All stakeholders have a role in driving administrative costs and inefficiencies out of the healthcare system. CAQH proposes the following actions in response to the reported results:
a) Support provider access to robust EDI systems.
b) Expand industry understanding of portals.
c) Embrace the transition to fully electronic transactions.
10. The increased volume of transactions seen in the 2017 CAQH Index is expected to accelerate in the next few years. While the overall number of insured patients is projected to decline slightly, a growing proportion of patients are covered by complex insurance products, such as high-deductible health plans. This may lead to providers and plans processing even more administrative transactions.
The 2018 data collection effort is now underway, and we need support from healthcare providers and health plans. As a participant, your data contribution can help make the Index more informative, advance its ability to track industry progress on cost savings and efficiency gains and identify where more work is needed.
Healthcare providers can work directly with NORC at the University of Chicago (NORC) to contribute data to the Index. Call (877) 394-1975, or email IndexHelp@norc.org to participate or to ask questions about the CAQH Index.
Health plans interested in participating should contact Kristine Burnaska, Director, Research and Measurement, at email@example.com to learn more and get started.