As healthcare costs in the United States continue to rise, many payers and providers have been collaborating to counteract these rising costs. And as they continue to shift to the fee-for-value reimbursement model, they have seen some success in reducing costs through the use of bundled payments and accountable care organizations.
But there is one crucial cost reduction strategy that has yet to be universally implemented: electronic processing. While it may have been assumed that the healthcare industry is already using the most innovative technology available, such is just not the case. The 2015 Council for Affordable Quality Healthcare (CAQH) Index found the healthcare industry is losing around $8 billion a year due to an incomplete transition from manual processing to electronic processing for procedures as simple as claim status and benefit and eligibility verification.
Currently, providers and payers still mail checks and claims as well as make phone calls to confirm patients’ eligibility for health coverage. Both parties could be using updated technologies to complete these and other processes much more quickly and efficiently, saving time and money. In order to facilitate the switch from manual to electronic payments, some place heavy emphasis on changing federal law to require updated technology in the healthcare industry.
Significantly, while payers are required to make the shift, healthcare providers are not required to use electronic processing at this time. However, payers are legally required to at least offer the providers they work with the opportunity to use the same electronic systems.
If providers do in fact choose to make the switch, this means updating their computer systems to support new automated transaction technology—a task that may seem overwhelming, but one that is necessary, and one that will reap large benefit and cost savings down the road. Providers should further adopt systems that are able to support the HIPAA standards as well as the operating rules that have been adopted by HHS.
In order to assist with this shift, CMS and CAQH have teamed up to help providers make a speedy, efficient, and manageable transition to automated technology. Together they have furthered adoption across the board and have helped to reduce inefficiencies in healthcare.
Simply, a transition to electronic processing is necessary in order to reduce spending in the healthcare industry. Making this update will ultimately save money for all three major stakeholders: payers, providers, and patients.