The health care industry could save an estimated $8.1 billion in administrative costs by adopting electronic transactions, according to The Council for Affordable Quality Healthcare. The organization recently revised its US Healthcare Efficiency Index, a report that dives into trends in electronic administrative transaction adoption and associated savings, and sees big opportunities in automation.
While there’s been good progress in adoption of electronic transactions in recent years, costly manual processes remain, leaving a lot of money on the table – and opportunities for providers to eliminate administrative costs. Most of the potential savings from automation of routine processes would accrue to health care providers and facilities, to the tune of $6.1 billion, according to the report.
The biggest areas of opportunity and cost savings are in six common transactions: claim submission, eligibility and benefits verification, prior authorizations, claim status inquiry, payments and remittance advice. Becker’s Hospital CFO did a nice overview of the report and how the cost savings break down by transaction.
There’s been good uptake of electronic transactions, but challenges in standardization of data, redundant processes and complex reimbursement systems, among other things, likely hinder greater adoption.
At Availity, we’re doing our part to help shore up adoption by enhancing core transactions to make it easier to conduct your claim and payment processes electronically. Here’s how we’re improving these transactions for our customers.
Eligibility and benefits
Eligibility and benefits verification presents the greatest opportunity to eliminate cost and save payers and providers $3 per transaction, so what’s the problem? Too many providers are forced to call a payer to determine eligibility and benefits information – a duplicative effort to the electronic process that ultimately undermines the effectiveness of electronic transactions, according to the report. Incomplete results, complex payer programs, increasing patient financial responsibility and continuously evolving medical treatments all contribute to this scenario.
Availity is working with payers to expand results returned, to further reduce or eliminate the need to make a phone call for verification (the cost of doing so, according to the report, is $3.55 for the provider and $3.28 for the payer). We’re also working with providers to ensure information is displayed in a way that makes it quick and easy to find. We’re excited to unveil these enhancements soon.
The strongest area of electronic transaction adoption is claim submission, with 91 percent of providers electing to go the electronic route over paper. Small provider offices tend to be the holdouts, and may need more support to make this transition.
If you are among the 9 percent submitting via paper, the Availity Web Portal provides a no-cost tool to submit claims via web entry to many of the nation’s largest payers. If you are curious what payers you can access in your area, just check our payer list.
Electronic claim status inquiries represent another significant opportunity to streamline routine operations. While most claim status inquiries are occurring electronically, providers still made more than 28 million telephone calls in 2012 at a total cost of $6.00 per call ($2.25 for providers and $3.84 for payers), according to the report.
Availity has a fantastic claim tracking feature in our Revenue Cycle Management product, which is a great story in using technology to reduce manual efforts and increase productivity. Customers can use automated searches to pinpoint claims that need the most attention, including unpaid, delayed and pended claims. They can also discover patterns, problems or delays in full lifecycle displays of individual or batch claims.
Ultimately, claim status is a transparency issue, and we’re exploring new ways to provide greater transparency between providers and payers. We’re testing new tools in specific markets, so stay tuned for more details!
We’re seeing increases in authorizations being required before services are rendered, largely due to a combination of new medical treatment alternatives and the introduction of the new insurance exchanges. These conditions force many providers into long call queues to obtain authorizations –a particularly labor-intensive process that comes with a potential savings of $13 per transaction.
But as more data moves electronically, the industry is getting creative on how to address this growing problem. Availity makes electronic authorizations available for many health plans, and we’re developing some innovative solutions to the authorization dilemma including using patient eligibility combined with admission data and to create authorizations without manual effort.
Payments and remittance
Payments and remittance advice activities also show improvement in the transition from paper to electronic activity, but represent the lowest level of adoption in the study. Electronic claim payments have a solid outlook, with use expected to grow rapidly.
Availity’s recent partnership with PaySpan Inc. will allow us to continue to innovate in complex payment and remittance advice activities. By integrating PaySpan’s platform for electronic provider reimbursement, we can provide an innovative solution enabling health plans to simplify the provider payment process while reducing operational costs.
Transactions Studied for the 2013 Index