Medicaid could save almost $5B annually through electronic claims management

Medicaid could save almost $5B annually through electronic claims management

State Medicaid programs are significantly lagging with the adoption of fully electronic claim submissions, claim reimbursements, prior authorizations, and other claims management processes, according to a new Council for Affordable Quality Healthcare, Inc. (CAQH) report.

CAQH’s Committee on Operating Rules for Information Exchange (CORE) found that state agencies and health plans covering just 44 percent of all Medicaid enrollees have reached some level of CORE certification.

In comparison, about 78 percent of beneficiaries in commercial health plans and 75 percent of beneficiaries in Medicare Advantage plans belong to a plan with some level of CORE certification.

“Medicaid payers confront the challenges of administrative costs, productivity and information security through CORE Certification,” stated Robin J. Thomashauer, President of CAQH. “The benefits to enrollees, taxpayers and government programs from efficient operational processes and electronic transactions are significant.”

CORE certification shows that healthcare organizations transmit or use healthcare administrative and financial transactions addressed by the committee’s Operating Rules. CAQH CORE currently has four phases of Operating Rules, which set standards for electronic eligibility, claim status, electronic funds transfer, and remittance advice (EFT/ERA).

Under later phases of the Operating Rules, the committee also created standards for electronic healthcare claims, prior authorizations, employee premium payment, and employee enrollment and disenrollment.

The upcoming Phase V Operating Rules aim to build on the standards for electronic claims management set by previous phases. For example, CAQH CORE plans to use Phase V to require more robust information in prior authorization transactions and streamline provider data submission to reduce the amount of manual follow-up between providers and health plans.

Adopting all four phases of operating rules for electronic claims management adoption would save Medicaid agencies and health plans over $4.8 billion annually, CAQH CORE reported.

Medicaid plans in states as California could save up to $655 million a year by transitioning away from manual claims management processes, the committee projected.

The potential savings primarily stem from the lower overhead expenses associated with manual claims management processes. Medicaid payers could direct a greater portion of state and federal tax dollars toward patient care by switching to electronic transactions, CAQH CORE stated.

Adopting electronic claims management processes would also reduce the administrative burden on providers.

Providers alone could save approximately $9.5 billion a year through automated claims management processes, CAQH CORE reported in June 2018. They could also save time since providers spent an average of five more minutes performing manual claims transactions compared to electronic transactions.

“Provider organizations that serve a large number of Medicaid enrollees like CHRISTUS find working with CORE-certified Medicaid plans to be far more efficient and predictable,” state George Conklin, CAQH CORE Board Member and CIO of health system CHRISTUS Health. “We strongly urge those Medicaid plans that are not certified to contact CORE and learn about the benefits to their organizations and the people they serve.”

While Medicaid has a way to go with electronic claims management adoption, the industry at large could also bolster their automated transactions. Despite more commercial health plan and Medicare Advantage beneficiaries being covered by a CORE-certified health plan, the entire industry could save $11.1 billion annually by implementing additional electronic transactions, CAQH CORE reported in June 2018.

CAQH CORE’s projected savings based on 2018 adoption levels was significantly higher than the estimated savings from the previous year. In 2017, the committee projected the industry to save $9.4 billion annually through electronic claims management adoption.

The potential savings increased because CAQH CORE found a recent uptick in manual transactions across payers. Health plans increasingly used web portals, which allow providers to track their claims and reimbursement, as well as receive remittance advice and claim denial management opportunities.

However, CAQH CORE considers web portal use a manual transaction because each payer has their own web portal and providers must log in to each separate portal to complete claims management processes. Online portal use resulted in the volume of manual claims management transactions increasing 55 percent compared to the previous year.

Through greater adoption of standardized, electronic claims management processes health payers and providers alike have the opportunity to significantly decrease costs and administrative burdens.

Source: RevCycle Intelligence

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