AHIP: Payers team up to reduce administrative waste

Unnecessary administrative costs contribute to approximately $800 million in wasted administrative costs associated with coordination of benefits alone each year, according to Robin J. Thomashauer, executive director of the Council for Affordable Quality Healthcare (CAQH).

Reducing waste is always a priority, of course, but it takes on increased importance in the era of healthcare reform--the Affordable Care Act is expected to add $274 billion in administrative costs to the healthcare system through 2022, FierceHealthPayer previously reported, and private insurers can expect to bear the brunt of those costs.

At the America's Health Insurance Plans (AHIP) Institute, executives from three of the nation's largest payers discussed how their individual efforts to modernize business processes led them to work with CAQH, a nonprofit alliance of health plans, to set standards that the rest of the industry could adopt. Here are details on two of these initiatives.

Effective Jan. 1, 2014, Aetna requires all contracted providers to be paid electronically, said Jay Eisenstock, the company's senior director of provider e-solutions. As of now, 76 percent of providers are all electronic, representing 90 percent of Aetna's claims, Eisenstock said.

Most early adopters were large providers, as they were "equally incented to take the inefficiency out of the system," he said, noting that the process of delivering paper checks via lockbox could cost as much as $70 per payment. To make the process worthwhile for smaller providers, Aetna and CAQH developed an enrollment hub that lets providers sign up for electronic file transfer (EFT) from multiple payers.

Meanwhile, Anthem and other insurers spent several years working with CAQH to combine physician credentials, directories, claims payments, authorizations and referral information into a single data source.

This has improved data accuracy, as forms are now updated every three months, while cutting the time it takes Anthem to credential a physician from one year to 45 days, said Kelly Toman, the firm's staff vice president of clinical quality compliance and credentialing. Nearly 99 percent of Anthem's practitioners use the CAQH system, she said, and the insurer processed 115,000 credential applications last year.

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