By Jim Dougherty, Co-founder & Chief Executive Officer, Madaket Health
Twitter: @MadaketHealth
By 2020, healthcare spending by the United States is projected to reach almost 20% of GDP, making the U.S. the largest healthcare spender of any nation in the world.
While curbing healthcare spending is a herculean task, the 2017 CAQH Index estimated that shifting from manual to electronic transactions between healthcare providers and healthcare payers could save the industry $9.4 billion annually.
Common payer-provider enrollment transactions such as Electronic Funds Transfer (EFT), Electronic Remittance Advice (ERA), Electronic Data Interchange for Claims (EDI), Claims Status Inquiry (CSI), and Eligibility Verification (EV) are necessary to help healthcare organizations get paid efficiently for their services, and for payers to manage provider data.
In the current state of affairs, much of this data exchange is done manually and on paper. Despite having “electronic” in the name, nearly half of ERAs are performed using some amount of manual process.
For even the simplest matters – joining a network, updating an address, sending bank information – clinicians and administrative staff go through a cumbersome and often error-prone process.
Just to complete one form under current norms, staff must:
- Find and learn the enrollment rules. Providers do business with an average of 25 payers. Across the different transaction types, that means a lot of repetition, countless forms to populate, multiple phone calls, and more.
- Correctly complete enrollment forms. Enrollment forms are usually two to four pages long, but some are as long as 10 pages. Reports suggest that providers spend an average of 8 minutes, and in some cases up to 30, on each form. Rarely can medical staff complete a form in a single sitting – it can take days or even weeks to gather the information needed. Payer requirements also change frequently, prompting another round of work. Starting, stopping, and restarting paper forms are common headaches.
- Manually submit enrollments. The largest payers in the U.S. still require providers to send information by mail or fax. In addition to the time spent manually sending papers, packages are often lost or are received in an illegible or unusable format and have to be re-sent. The repetitive and manual nature of enrollments leaves room for human error, even with experienced staff.
- Check enrollment status. After sending paperwork, providers endure a time-consuming and frustrating process for checking on the status of their enrollments. Over a period of weeks or even months, staff will make numerous inquiry calls to payers, often discovering that their submissions were lost or rejected due to error. Meanwhile, those providers continue to treat patients without receiving the correct reimbursements.
- Go back to square one. About 20% of enrollments are rejected due to error, so medical staff must start the process of finding, completing, and submitting forms all over again.
These manually-processed transactions weigh on providers and lead to lack of timely enrollment and status updates can lead to denied claims, missed referrals, and delayed payments. Providers lose 1.1 million labor hours per week – time that could otherwise be spent treating patients – to these processes. For patients, these inefficient processes can create significant challenges in finding the right information in provider directories.
With providers burning out at alarming rates, and the potential for billions of dollars in savings, the industry cannot afford to let the inefficiencies of manual administrative transactions continue. It’s time for providers, payers, and third parties like clearinghouses to standardize, automate and digitize their processes to help remove unnecessary waste that has no place in the business of healthcare.