CAQH Report on Electronic Transactions in Health Care

By January 31, 2020 February 4th, 2020 Commentary

CAQH (formerly known as the Council for Affordable Quality Healthcare, so why do people have to use acronyms instead of a full name, so you know what they actually do) has released its annual report on use of electronic transactions in health care.   (CAQH Brief)  Despite the last reform law spending billions of dollars to get health information technology widely used and promote electronic sharing of data, apparently we still have a long way to go.  Since administrative expenses are claimed to be so high in this country and automating many activities would supposedly save a lot of money, seems surprising that we aren’t there yet.  The report claims that there is about $40.6 billion in annual administrative spending on processes that could be fully automated, and that doing so would save $13.3 billion per year.  The group says that $102 billion in annual cost reductions from adoption has already occurred.  The primary categories of transactions, and full electronic adoption rates for 2019, are:  eligibility and benefit verification, 84%; prior authorization, 13%; claims submissions, 96%; claims attachments, 20%; COB, 86%; claims status inquiries, 70%; claims payments, 70% and remittance advices, 51%.  Only COB and claims payment showed meaningful gains in 2019 and prior authorization and claims attachments are clearly laggards.  Total volume of electronic transactions increased by 17% in 2019 to a total of over 34 billion.  Claims submission, eligibility and benefit verification and remittance advices have the highest volume, by a fair margin.

The transactions tracked tend to flow in a logical sequence and fully automation of the process, according to the report, would save over $42 per encounter over manual processes.  The greatest per transaction savings can be found for prior authorization, over $12, claim status inquiries and eligibility and benefit verification.  While both plans and providers would see savings, by far the greatest portion of the savings from fully automating transactions would accrue to providers.  Prior authorization is a particular focus because it is viewed as such a pain in the ass by providers, and patients.  If it could at least be fully electronic, it would ease the cost burden.  Eliminating prior authorization altogether is a high priority for providers.  I am actually strongly in favor of trying to get everything as automated as possible because there would be savings and it probably results in fewer errors and less rework costs.  I am just slightly amused by the fact that the reform law apparently wasn’t successful in this area, just like it wasn’t in most of its objectives.

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