Study: Electronic processing of medical claims on the rise, speeding process

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Electronic processing of medical insurance claims has tripled in the last decade, which has brought about a number of efficiency gains for providers in all areas, according to a new study from America’s Health Insurance Plans (AHIP).

The study found that three-quarters of the claims are currently processed electronically which represents a rise of 24 percent from 1995. As a result, healthcare providers are seeing 98 percent of claims being processed within four weeks of submittal. In fact, the data show that insurers often process a majority of claims within a week of receipt, AHIP said.“The concerted efforts of health insurance plans to speed claims payment and cut administrative costs have already led to significant improvement and savings,” said Karen Ignagni, president and CEO, AHIP.

Beyond time savings, the study shows that there are cost savings as well. For instance, it costs an insurance company an average of 85 cents to process a “clean” claim electronically, which compares favorably to $1.58 for a paper claim. As a result, the shift to electronic submission and processing saves consumers several billion dollars each year, Ignagni said.

The last four years has seen a boom in electronic submittal of claims. Only 44 percent of claims were processed this way in 2002, however now the industry has hit 75 percent.

“These data clearly show the best way to speed claims payment and to further reduce administrative costs is not through costly, new ‘prompt pay’ mandates, but rather to continue encouraging greater use of electronic claims submission,” Ignagni saidThe study is based on compiled data from nearly 25 million claim transactions by a sample of 26 health insurance companies of various sizes throughout the United States.