Remote Work Propels Electronic Claims Management Adoption

Electronic claims management adoption increased in 2020 as healthcare providers shifted to remote work environments when possible, but they are still leaving billions of dollars on the table in potential savings, according to the latest Index report from the Council for Affordable Quality Healthcare, Inc. (CAQH).

Adoption of electronic transactions increased by 2.3 percentage points across the medical and dental industries in 2020, the ninth annual CAQH Index revealed. For the medical industry, those transactions included eligibility and benefit verification, prior authorization, claim submission, attachments, acknowledgements, coordination of benefits, claim status inquiry, claim payment, and remittance advice.

Researchers found that electronic adoption increased the most for medical providers and payers, with all transactions improving except for attachments, coordination of benefits, and claim status inquiry.

The most significant improvement was observed in eligibility and benefit verification (89 percent in 2020 from 84 percent in 2019), prior authorization (26 percent from 21 percent), claim payment (76 percent from 71 percent), and remittance advice (64 percent from 57 percent).

The Index also showed that the proportion of electronic volume increased despite an overall 11 percent decrease in medical transaction volume in 2020. Volumes were likely down due to the impacts of COVID-19. However, electronic transactions accounted for the highest percentage of total volume for the medical industry at 81 percent, researchers highlighted.

Despite the steady increase in electronic claims management adoption, healthcare payers and providers could do more to realize the benefits of electronic processes. For one, healthcare spending across the claims management transactions analyzed by the Index increased by 12 percent in 2020 to $37.4 billion.

Researchers attributed the increase to remaining manual transactions, which “required more intensive intervention from providers to ensure that newly implemented requirements and codes were executed correctly.” They said providers and payers had the added burden of ensuring patient medical records were up-to-date and accurate.

The medical industry could save $20 billion by transitioning those manual claims management processes to electronic workflows. The 2021 CAQH Index found that $42 billion, or 11 percent, of the estimated $391 billion spend on administrative complexity in the US healthcare system is spent on the transactions analyzed in the report. Researchers calculated that nearly half (48 percent) of that annual spend could be saved by transitioning to fully electronic transactions.

The savings opportunity in this year’s Index was 24 percent greater compared to last year’s report, researchers pointed out. Manual transactions continue to cost providers and payers more, while the cost to handle claims electronically continues to decrease.

“The 2021 CAQH Index uncovered important shifts in healthcare administrative operations during the pandemic, some of which could have lasting implications,” said April Todd, senior vice president of CAQH’s CORE and Explorations, said in a press release. “Social distancing, remote work and an increase in the use of telemedicine have resulted in greater levels of automation today and additional opportunities for savings in the future.”