The 2021 CAQH Index observed a savings opportunity of $1.7 billion annually for fully electronic claim submissions and a 60% increase in number of medical claim payments.
The cost savings opportunity for fully electronic claim submissions in the medical industry more than tripled in 2021, while claim payments boomed in volume as the benefit of automation remained apparent, according to the 2021 Council for Affordable Quality Healthcare Inc. (CAQH) Index.
The ripple effects of the COVID-19 pandemic were far-reaching and greatly impacted healthcare administrative transactions, which dealt with a rise in total spend in the past year, further highlighting the need for adoption of fully electronic processes across the board. The Index measured adoption, volume, and cost savings in the various transactions in 2021 and found an opportunity to save $1.7 billion on claim submissions with electronic methods—a massive leap from the $522 million reported for the previous year.
Though automation adoption for claim submissions remained highest of the transactions analyzed (97%), spending ballooned by 10% and accounted for $6.1 billion of the total annual medical spend, trailing only eligibility and benefit verification. As providers poured more time and resources into manual transactions to submit new information for telehealth or engage with health plans, spending on claim submissions increased.
With manual provider volume and cost per transaction going up and electronic costs declining, the result was a money savings opportunity of $1.7 billion and a time savings opportunity of six minutes on average per transaction.
On the claim payments side, lower utilization in the early months of the pandemic caused providers to settle past due payments, especially claims that were unresolved before COVID-19, according to the Index. This contributed to a 60% increase in total volume, which opposed the other transactions in the report.
Providers sought to be paid more quickly through electronic means and billed more regularly for telemedicine visits to help counteract the loss of revenue from the early stages of the pandemic, the research states, resulting in an increase in payment transaction costs for providers. The jump in volume and provider costs resulted in an 89% percent surge in spend to $2.2 billion.
According to the Index, the cost savings opportunity for claim payments switching from manual to fully electronic was $577 million, a 35% increase from $426 million in 2020. The time savings opportunity, meanwhile, was four minutes on average per transaction.
The findings add to the evidence backing automation adoption across all administrative transactions in the medical industry.
"After an extraordinarily challenging two years in healthcare, the industry's progress toward automated and efficient administrative processes is encouraging," said April Todd, CAQH senior vice president, CORE and Explorations, in a press release. "Our experience during the pandemic has also highlighted future opportunities for savings through automation."
Jay Asser is the contributing editor for strategy at HealthLeaders.