Make Paper Airplanes, Not Paper Claims

We can do almost anything electronically these days, even a process as complex as securing a mortgage loan on a house. Yet, people can’t visit a doctor or have a surgery without slow, error-prone manual processes and a mountain of paper.

It comes at a steep cost. The healthcare industry loses ~$20B annually from manual processes¹, which doesn’t even account for the cost of paper, equipment, postage, and phone/fax lines. Moreover, there is currently a global paper shortage the likes of which has never been seen before, causing price increases of anywhere between 10% and 60%.² This costly industry problem is only going to get worse unless we reduce our reliance on paper-based processes. 

Cascading Effects of Manual Claims Processes

Consider a typical scenario. A provider faxes a claim or drops it in the mail – and then has no idea what happens from there. If there’s no word in a couple of weeks, they follow up. On the payer side, incoming paper documents get scanned and indexed and may not be accessible immediately. When the provider calls to check the status, if the payer representative doesn’t identify the right claim, the provider proceeds to submit the claim again. When the original claim is identified, the provider now has duplicate claims, which causes a denial by the payer, leading to an appeal. It can be a vicious cycle.

In parallel, infrastructure costs continue to increase. In addition to paper, equipment and supplies, postage costs are also increasing. Medical claims must be mailed at the higher first-class postage rate due to HIPAA requirements. At 10,000 claims a month, that adds up to $72,000 a year just for postage. One more cost for payers is maintaining physical office space for printing and mailing claims, even after many staff shifted to remote work during the pandemic.

In reality, no one wants to manage claims by fax and mail, because it’s not efficient, it costs more and it’s difficult to process for all stakeholders. Making the shift to electronic processes will reduce the workload and speed the payment process for everyone.

Steps to Take Now to Reduce Paper Processing

Across the industry, some components of payment process, such as eligibility and benefit verification, have achieved higher electronic adoption rates. On the other hand, only 21% of attachments and 26% of prior authorizations were processed electronically^3. Given that technology is available, there are immediate steps provider revenue cycle teams can take to reduce manual processing:

Actively maintain payer and plan profiles. It’s important to do a thorough review of all payer and plan profiles on a regular basis. Oftentimes, organizations will discover that a payer or health plan identified in their system as only accepting paper claims can now accept electronic claims. Or there may have been an error in the original setup. In either case, consistent review and cleanup of the system will keep better pace with payer updates and enable more claims to be submitted electronically. When each electronic claim saves $2.92 over a paper claim⁴, the savings add up.

Edit claims before submission. Editing is one of the most critical components of claims processing that prevents denials and reduces manual rework. Using flexible, HIPAA-compliant editing tools, providers can complete eligibility and network checks, confirm that all data required is entered accurately, and account for custom requirements for special circumstances. By focusing on claim edits up front, providers can submit more clean claims, requiring less manual intervention downstream.

Submit attachments up front. The need for additional information to process a claim, in the form of a medical attachment, is one of the largest causes of payment delays and denials. In addition, it is one of the least adopted electronic transactions, resulting in nearly 80% of medical attachments being sent manually via fax or mail. Instead, use existing technology to identify and submit unsolicited attachments up front. This can be accomplished via secure file transfer from within the EHR workflow, which can marry the claim and the documentation together and send them to the payer as a complete package. One health system reduced attachment-related denials by 88% and saved 1,200 hours of rework in just three months. The cost savings are significant – each electronically submitted attachment saves $3.10 over sending a paper copy.⁵

More Electronic Processing Means More Visibility

An important outcome of shifting more claims to electronic processing is the increase in visibility. It’s critical at every step in the process for providers and payers to understand the status of a claim: when it was received by the payer, if more information is needed, if the medical attachment was received, if it has been paid, etc. Manual claim status inquiries, typically done by phone, cost a whopping $12.12/inquiry more than checking electronically. Eliminating manual inquiries could save a provider 22 minutes per inquiry. Industry-wide, removing manual inquiries could reduce waste by $3.1B annually.⁶

Make Paper Fly Away for Cleaner Claims Processing

It’s time for the healthcare industry to let go of paper and fax machines – every other industry is far ahead of us. While there will always be some level of paper-based processing, the proportion can be reduced dramatically with collaboration among industry stakeholders and higher adoption of existing technology. Healthcare providers that have made the shift have gained a 75% reduction in staff time dedicated to managing paper claims and an 80% reduction in in-house paper claim volume. Let’s move forward with electronic claims processing that is not only less costly, but also results in faster payment for providers and faster account resolution for patients.