Every February a practice manager somewhere adds up how many hours the front desk spent on hold with payers in January. It is always more than anyone expected. Last week CAQH put a national number on that experience. Its 2023 Index, the eleventh annual edition, was released on January 30, 2024, and the headline is that spending on the administrative transactions it tracks rose about 50 percent year over year on the medical side, even though more of those transactions are now electronic than ever.
That sounds contradictory until you read the detail. The Index attributes the increase to staffing shortages, hybrid work, security requirements and, above all, the time each transaction now takes. Provider staff time on administrative transactions rose 14 percent on average. In other words, the work got harder per transaction, and there was more of it.
Key takeaways
- The 2023 CAQH Index puts spending on the nine tracked transactions at about $89 billion a year, with about $18.3 billion still available by moving the remaining manual work to fully electronic transactions.
- Medical spending on those transactions rose about 50 percent year over year, driven by staff time per transaction, which rose 14 percent.
- Claim submission is nearly all electronic; prior authorization is still mostly manual. Nothing in the ranking has changed in years.
- For a small practice the money is in eligibility, remittance and claim status, in that order. Prior authorization is the hardest to fix and should not be first.
- Most practices already pay for the electronic transactions they are not using. The fix is enrollment and habit, not new software.
The numbers worth remembering
| Finding | Figure from the 2023 Index |
|---|---|
| Annual spending on the nine tracked transactions (medical and dental) | About $89 billion, which the Index describes as roughly 22 percent of what the U.S. spends on administrative complexity in healthcare |
| Savings available from moving remaining manual and partially electronic transactions to fully electronic | About $18.3 billion per year |
| Savings already achieved through automation to date | About $193 billion per year avoided |
| Change in medical spending on tracked transactions | Up about 50 percent year over year |
| Change in provider staff time per transaction | Up about 14 percent on average |
The nine transactions are eligibility and benefit verification, prior authorization, claim submission, attachments, coordination of benefits, claim status inquiry, remittance advice, claim payment and acknowledgements. As in prior years, claim submission is nearly all electronic and prior authorization is the least automated, with only about a third of medical prior authorizations fully electronic. Nothing in that ranking surprised us.
How to read this from a practice's chair
National savings figures are abstract. The useful exercise is to translate the Index's logic to one practice. CAQH consistently finds that a manual transaction costs a provider several times what the same transaction costs when done electronically, mostly in staff minutes. A phone eligibility check takes a person 10 to 15 minutes including hold time. A batch 270/271 check takes seconds and the person never touches it unless there is an exception.
Take a three-provider practice with 60 visits a day. If eligibility is checked by phone or by logging into six different payer portals, that is somewhere between 6 and 10 staff hours a day. If it is run as a batch two days ahead through the practice management system, the same work is 30 to 45 minutes of exception handling. The difference is roughly one full-time employee. That is the Index's $18 billion, one practice at a time.
The same arithmetic applies to every row. Here are the staff times we use as a rule of thumb when we audit a practice's workflow. They are our observations, not CAQH's published figures, and your numbers will differ; the point is the ratio.
| Transaction | Manual (phone, portal, paper) | Electronic (standard transaction) | Where the time goes when it is manual |
|---|---|---|---|
| Eligibility check | 10 to 15 minutes by phone; 3 to 5 minutes per portal | Seconds; exceptions only | Hold time, portal logins, retyping the result into the chart |
| Claim status | 15 to 25 minutes by phone per claim | Automatic polling, no staff time | Hold time; most calls confirm the claim is simply in process |
| Remittance posting | 3 to 6 minutes per claim from a paper EOB | Auto-posted; 30 seconds per exception | Keying line items, reconciling to checks, filing paper |
| Prior authorization | 20 to 45 minutes per request by fax or phone | Still mostly portal; the standard 278 is rarely usable | Gathering records, resubmitting, chasing status |
Which transactions to automate first
Not all nine transactions are equal for a small practice. Our order of priority, based on what we see in audits:
- Eligibility and benefits (270/271). Highest volume, easiest to automate, and the transaction that prevents the most denials. Every practice management system supports it. If yours is not running batch eligibility 48 hours ahead, start here.
- Remittance advice (835) and payment (EFT). Auto-posting removes hours of manual payment entry and reduces posting errors. Enroll for ERA and EFT with every payer that offers it, and stop accepting paper checks with paper EOBs where you can.
- Claim status (276/277). The Index has shown for years that claim status is the transaction practices still do by phone even when the electronic version is available. Set the clearinghouse to poll status automatically at day 15 and day 30, and only call for claims the payer has not acknowledged.
- Prior authorization (278). The least automated transaction nationally and the hardest to fix, because payers accept the standard transaction inconsistently. The federal prior authorization rule released last month sets an API deadline of 2027 for covered payers. Until then, use payer portals over fax and keep one log of every request.
- Attachments (275). Adoption remains low. Most practices will keep uploading documentation through portals for a while yet.
The mistakes that keep transactions manual
In our experience three habits keep a practice in the manual column even when the technology is paid for.
The exception becomes the rule. One payer does not return usable benefit detail through the 271, so the front desk calls that payer. Within a year they call every payer "to be sure". Fix: define which payers require a manual check and list them; everything else stays electronic.
Nobody enrolls. ERA and EFT require enrollment with each payer, often with a signed form and a bank letter. The forms sit in a folder. Fix: one person owns payer enrollment for electronic transactions, with a list of the top 20 payers and a status for each.
The vendor setup was never finished. The clearinghouse offers real-time eligibility, claim status polling and ERA auto-posting, and the practice turned on claims submission at go-live and nothing else. Fix: ask your clearinghouse for a report of which transactions you are enrolled for, by payer. You may be surprised.
What the Index says about security
This year's report is the first to name security requirements as a driver of administrative cost. Multifactor authentication, portal lockouts and identity verification all add minutes. We think this is a cost worth paying, but it is a real cost, and it argues for fewer portals rather than more. Every payer portal your staff logs into is another set of credentials to manage. A clearinghouse that consolidates eligibility and status for most payers is, among other things, a security simplification.
Questions we hear
Our practice management system charges per transaction. Is electronic still cheaper?
Almost always. A per-transaction fee measured in cents compares against staff time measured in dollars. Where practices get into trouble is running eligibility on every patient every day, including patients with no appointment. Run it against the schedule, not the database.
Do payers actually want electronic transactions?
The Index shows payers save too, and most large payers actively push providers toward electronic channels. Where a payer does not support a transaction, the cost lands on you, and that is a fair point to raise at contract time.
We are a two-provider practice. Does any of this scale down to us?
Yes, and the ratio is often worse for you, because one front desk person does everything. If that person spends two hours a day on hold, that is a quarter of your front desk capacity. If you want a second view of which transactions are still manual in your practice, the Revelrex RCM audit includes a transaction workflow review, and practices using Revelrex billing receive ERA, EFT and eligibility enrollment as part of onboarding.
What to do this month
- Ask your clearinghouse for your transaction enrollment report by payer and identify which of the top 20 payers lack ERA, EFT, real-time eligibility or claim status.
- Time the front desk for one week: minutes on hold with payers, by payer. It is the single most persuasive number for a practice owner.
- Count the payer portals your staff use weekly. If it is more than eight, ask which could be replaced by a clearinghouse transaction.
- Set a batch eligibility run for all appointments 48 hours out, and a second run the morning of the visit for same-day changes.
- Pick the three payers with the most phone time and submit ERA and EFT enrollment for them before the end of the month.
