"Eligibility and benefit verification, the top savings opportunity for medical plans and providers, experienced a 37% increase in savings opportunity" according to the Index. (Photo: Shutterstock)
The U.S. health care industry would save $16.3 billion per year by fully automating nine common administrative transactions, according to the 2020 CAQH Index — thanks to a drop in costs for automated processes and higher costs for manual and partially electronic portal processes. "This year's report found that adoption of electronic processes generally increased across the medical and dental industries," Kristine Burnaska, director of research and measurement at CAQH, the nonprofit alliance of health plans and related associations, said in a statement. "The data also indicates that future efforts to automate could yield even greater returns."
Related: Not just the bills: Health care's administrative 'sludge' eating up employees' time The CAQH Index tracks automation, spending and savings opportunities for administrative transactions related to verifying patient insurance coverage and cost-sharing, obtaining authorization for care, submitting claims and supplemental information, and sending and receiving payments. It categorizes transactions by whether they are fully automated, partially electronic or manual. (The 2020 Index collected data from health plans and providers through the 2019 calendar year and does not include the impact of COVID-19 on health care administrative transactions.)
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While the industry has already saved $122 billion annually by automating administrative transactions, the Index pinpoints opportunities for additional savings. For example, each fully automated claims status inquiry costs $11.71 less than the same transaction conducted manually for the medical industry and $10.92 less for the dental industry.
The 51-page report also states that costs associated with some manual and partially electronic portal transactions are increasing as health care business needs become more complex — and as manual processes to accommodate them require more labor and expense. In an "industry call to action" the 2020 CAQH Index notes that "several transactions offer the greatest potential for savings and thus should be the focus." The alliance's recommendations include the following:
- Focus efforts to address cost-savings opportunities. "Eligibility and benefit verification, the top savings opportunity for medical plans and providers, experienced a 37% increase in savings opportunity as a result of higher transaction volume, higher manual and web portal costs, and lower electronic transaction costs," according to the Index.
- Accelerate standards and operating rule development to address emerging market. needs. Doing so is critical to enabling automation across trading partners and streamlining administrative processes, the Index states.
- Capitalize and expand on progress made to date. "Prior authorization remains one of the medical industry's most complex and burdensome transactions," according to the Index. "Electronic adoption increased by eight percentage points, the highest increase in adoption among the medical transactions in the 2020 CAQH Index. This parallels public and private sector initiatives related to reducing the overall administrative burden associated with this transaction."
"The results of the 2020 CAQH Index are encouraging," April Todd, senior vice president of CORE and Explorations at CAQH, said in a statement. "The data shows that the opportunity to build on past progress — and achieve additional savings that payers and providers can invest in patient care, innovation, and expanding access in communities across the country — is significant."
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