The Council for Affordable Quality Healthcare (CAQH) published its 2023 Index Reportwhich measures the adoption of HIPAA electronic transaction standards across the healthcare industry. The CAQH Index Report’s findings are based on data collected from surveys of industry stakeholders. 

The purpose of the HIPAA electronic standards, which were established in 1996, is to transition from manual, often paper-based, transactions to a standardized electronic transaction. The transactions included in the report are: 

  • Eligibility and Benefit Verification (270/271) 
  • Prior Authorization (278) 
  • Claim Submission (837) 
  • Attachments (275) 
  • Acknowledgments (277) 
  • Coordination of Benefits (837) 
  • Claim Status Inquiry (276/277) 
  • Claim Payment (837) 
  • Remittance Advice (835) 

According to the report, adoption increased for most of these transactions. The only exceptions were Coordination of Benefits and Claim Payment which saw a one and two percent drop, respectively. 

While adoption of the Claim Payment transaction declined by two percent (from 75% to 73%), overall claim payment volume increased by nine percent for the medical industry with an eight percent increase in EFT volume. Despite the decline in Claim Payment adoption, the report shows a five percent increase in the adoption of electronic remittance advice to 88%. 

The report defines adoption based on medical and dental plan reported volumes. Transaction adoption is classified into three modes: 

  • Fully Electronic — Transactions conducted using a HIPAA-mandated standard, unless otherwise specified. 
  • Partially Electronic — Transactions conducted using web portals and interactive voice response (IVR) systems. 
  • Fully Manual (Manual) — Transactions requiring end-to-end human interaction such as telephone, mail, fax, and email. 

The total transaction volume is estimated based on the proportion of covered lives represented by participating medical plans. 

Most transactions are widely utilized, with seven of the nine transactions having an adoption rate over 74%. Prior Authorization and Attachments are the two transactions with low utilization rates of 31% and 29%, respectively. 

The report acknowledges that “prior authorization continues to be one of the most burdensome administrative tasks for providers.” It goes on to highlight that “the medical industry spent 30 percent more, or $1.3 billion, on prior authorizations compared to the previous year because of the increase in volume. Although spending for this transaction is one of the lowest, the unit cost to conduct this transaction using the HIPAA standard is one of the highest for providers, approximately six dollars per transaction.” 

Attachments are understandably underutilized because there is no federally adopted electronic standard for this transaction. CMS did propose an Attachments standard in 2023 but has yet to finalize the regulation adoption of the standard. 

The report estimates that the healthcare industry could save $16.4 billion by fully adopting electronic transactions. 

ADVOCATE will share additional information with clients and friends as it becomes available on this and other Federal Health Policies.   

Kirk Reinitz, President