Electronic data interchange (EDI) continues to make the healthcare industry more efficient.
Besides living up to HIPAA by streamlining claims processing and payment safely, EDI lays the groundwork for efficiency and
tomorrow's clinical data exchanges, all while reducing paper.
Past studies demonstrate the efficacy of EDI. A 2006 America's Health Insurance Plans (AHIP) report found electronic submission
of health insurance claims had more than tripled in the last decade, reducing administrative costs, and allowing 98% of claims
to be processed within 30 days of receipt. The percentage of claims received electronically was 75% in 2006, up from 44% in
2002.
These findings indicate electronic claims are less costly to process than paper claims, with the average cost of processing
a clean electronic claim at 85 cents, nearly half the $1.58 cost of processing a clean paper claim. AHIP also found that claims
requiring manual or other review cost $2.05 on average to process. Savings from a fully-loaded electronic system appear to
be promising and could reduce a practice's annual insurance administration costs by more than $42,000 per physician, according
to a January 2006 Milliman study. A new study last year released by the Cooperative Exchange (CE), the leading association for the healthcare transaction clearinghouse,
sheds new light on claims transactions, revealing just how big a footprint EDI has.
CE's executive director collected, assessed, and compiled data from eight study participants who shared aggregate 2007 claims
data for this survey. The report details specific trend data on electronic claims submission, including the number of claims
sent electronically, how many submitting provider organizations are using electronic claims, and the dollar amount those transactions
represent.
Methodology:
Totals were submitted for unique claims submitted by medical professional claims (837p) and by institutions (837i). Duplicate
claims, such as claims that traversed multiple clearinghouses before arriving at a payer were excluded. Initial claims to
a secondary payer were counted, as they represent a distinct transaction. Totals were submitted for the number of submitting
(billing) providers offices versus individual providers. Members who accepted transactions directly from a PMIS (patient management
information system) or other primary source included these claims as well. Finally, members reported the total dollar value
of fees submitted on unique claims; the fee values of secondary claims were excluded.
Results:
In all, the eight clearinghouses submitted more than 400 million unique claims from more than 100,000 providers representing
more than half a trillion dollars. The average fee submitted per claims was $174.30 for a professional claim and $3,740.02
for an institutional claim. (The study excluded dental claims.)
Total dollar value for 837 (p) was $50 billion and $472 billion for 837 (i).
And while impressive, the number of claim transactions reported only represents health industry claims and does not report
on the additional transaction sets that include eligibility, remittances, treatment authorization and claim status.
The CE survey supports:
- Expansion of EDI usage, especially at the physician level where it is estimated that 35% to 40% of physicians still rely on
paper claims submissions. Once appropriate systems are in place, EDI usage can show a short term improvement for this group
in revenue management.
- Consistency of formats to allow for enhanced data sharing and the ability to quickly meet provider and payer needs.
- Enhanced functionality for existing EDI users to not only include claims submissions but also remittance advice, enrollment,
eligibility and other data. It is currently estimated that 30% of payers use expanded transaction sets which provide related
data for eligibility, claims status and electronic remits.
- Innovation within the scope of EDI functions to support the continual refinement of both administrative and clinical aspects
of healthcare and the national drive to healthcare reform.
This survey documents the growing use and greater acceptance of EDI across both institutions and individual providers. Within
the individual provider category, there remains significant room for growth with regard to EDI transactions. Among existing
EDI users, there is an expectation of continued growth in the type of transactions supported by individual clearinghouses.
Tim McMullen is the executive director of Cooperative Exchange
Charlotte Martin is the president and CEO of Gateway EDI
Douglas J. Bilbrey is executive vice president of sales and marketing for the SSI Group, Inc.
