How Interoperability Can Boost Revenue Cycle Results

The annual cost of administrative and process inefficiencies in the U.S. healthcare system has reached into the billions, with billing, coding, physician administrative activities, and insurance administration being the primary drivers. Provider organizations spend approximately $39 billion each year and dedicate an average of 59 FTEs just to comply with hundreds of administrative regulations and requirements.

Think of the progress we could make in improving the lives of our patients, the investments we could make in state-of-the-art equipment and facilities, and how greatly we could expand access to care if we could redirect the billions spent each year on administrative waste towards innovation and direct patient care.

Current gaps in processes

 According to an article in HFMA Magazine, the top use cases for costly waste and inefficiency include:

These are all costs that could be significantly reduced through more effective interoperability. But how do we create an environment that addresses these inefficiencies while developing an interconnected infrastructure for the benefit of payers and providers?

Certainly, FHIR gives us a good opportunity to work from a common protocol and set of standards when we talk about the payload of transactions on a network. However, FHIR itself does not translate into interoperability. FHIR is just the payload; it's what's inside the envelope when we exchange data. How an envelope moves through the enterprise and across the industry, and how it’s kept updated is based on the ability to create a dynamic, interoperable network.

We’re currently spending way too much energy creating point-to-point interactions across a mesh of an ecosystem and not enough energy creating a shared environment where payers and providers can work from the same platform of knowledge.

Use Cases for a Decentralized Peer-to-Peer Network

One of the biggest issues with today’s EDI transactions, according to the director of revenue cycle management at a large health system, is a lack of consensus. “EDI transactions, the 270/271 especially, have been out there for 20 years or more, yet we know there are limitations with their use as a vehicle to support the exchange of information between parties.”

We have a unique problem that is very well positioned to be solved by a decentralized peer-to-peer network in that there are multiple stakeholders who are part of the insurance coverage determination process. In other words, all participants on the network would be able to work within the same system using the same set of requirements—as if they were all the same organization—through a consensus-based network.

Consider eligibility verification and prior authorizations. While 94% of medical eligibility verification transactions are now conducted electronically, nearly half a billion are still conducted manually each year. According to the 2023 CAQH Index, the volume of eligibility verification transactions increased by 18% in 2023, while medical spending on the transactions increased by 60%, now estimated at $43 billion. This represents the largest share of annual administrative medical spending at 51%. Providers can save 16 minutes per eligibility transaction by going electronic while saving the industry $9.3 billion a year.

The adoption of electronic prior authorizations lags far behind eligibility. According to the 2023 CAQH Index, just 31% of prior authorizations are fully electronic. Spending on prior authorizations increased by 30% in 2023, reaching $1.3 billion annually. Providers could save 11 minutes per prior authorization by going electronic while saving the industry $474 million each year.

The 2023 CAQH Index reports that the time providers spend on conducting transactions increased by 14% in 2023, much of it due to increased volumes and staffing shortages. This resulted in a 77% increase in total medical spending, now estimated at $82.7 billion annually. The average manual transaction now costs $7.19 compared to $3.45 for electronic. Adopting electronic transactions could save the industry $16.4 billion annually.

Instead, providers and payers could leverage an application built on a decentralized, peer-to-peer network to conduct eligibility verifications and prior authorizations—without the need for time-consuming back and forth faxes, emails, and phone calls. With this type of network, the entity conducting the inquiry receives the most up-to-date information based on a number of data elements that are relevant to them.

For example, a primary care provider, a specialist, and a hospital would all receive information based on data elements that are specific to their specific scenario. This would be based on the type of provider, the kind of procedure, the type of facility, the patient’s remaining deductible, and the patient’s out-of-pocket responsibility, and more. It’s basically an “if/then” inquiry. If the inquirer is a surgeon, and if the procedure is covered in the patient’s benefit plan, and if the patient’s deductible has been met, and if the provider is in network, and if all prior authorization requirements are met, then this is what the provider will be paid and what the patient will owe.

The senior director of revenue cycle transformation at a large, multispecialty academic medical center believes that we have a misconception that patients don’t want to be bothered with the financial impact of a service at the time the service is rendered. “In the past we thought we were doing patients a favor by not approaching them about their financial responsibility. Then the patient receives a bill several months later and tries to remember even having the service and then figure out if the bill is legitimate.”

By giving patients an accurate amount that they will owe at or before the time of service, patients have the information they need to make more informed decisions about how to pay for their care. It also enables providers to collect on bills or set up payment plans, which can help reduce the cost to collect and write-offs, as well as surprise bills for the patient.

Coordination of benefits (COB) is another process fraught with administrative waste and inefficiencies that could benefit from a decentralized, peer-to-peer network. COB processes often cause cogs in the revenue cycle on the back end that can lead to delays in reimbursement and excessive rework. Because of the latency of data, there can be a long lag in getting updated information on multiple coverages or changes in coverage status. COB works better if all parties have full insight into multiple enrollments. With a peer-to-peer network, updated enrollment information on each participating member/patient is already in the system and can be accessed by all participants on the network.

Imagine a decentralized, peer-to-peer network that allows payers to co-develop processes to streamline coordination of benefits. Working together, payers can develop the rules, processes, and the analytics that provide greater standardization and insight into primary, secondary, and tertiary coverage for network participants. Today, what is a heavy administrative burden that can result in costly, labor-intensive denials, instead becomes a simple network inquiry that facilitates faster, more accurate claims.

How it works

The foundational benefit of a decentralized, peer-to-peer network is the concept of connecting once to many instead of one to one. Instead of having to build and maintain separate connections to a myriad of different services, trading partners, and counterparties within the industry, all network participants have access to a shared base of knowledge.

In the network, payers and providers submit data to the cloud where it becomes discoverable based on permissions that are set by each participating organization. Users connect to the network via the cloud, where the ID keychain and master index locate the information requested, match it to the data available, and then deliver it to the requestor. The network design provides certification, cybersecurity, and compliance.

Where we go from here

No one could have imagined Amazon before the Internet was invented. With a decentralized, peer-to-peer network, the sky’s the limit in terms of innovation in healthcare. The use cases discussed in this blog are just the tip of the iceberg. We’re now at the point where we need to look beyond just transactions. Working in partnership with payers, providers, vendors, banks, and other stakeholders will allow us to see the full potential of a network from a different lens—one that enables us to truly optimize the patient/member experience.

The more organizations we add to the network, the value grows exponentially because the connections grow exponentially. It’s not 0 to 10 growth; it’s 10 squared. The more connections you have, the more chances for innovation. And the more innovation you have, the more chances there are to achieve true transformation and “eureka” moments.

Time to act is now

Advancing administrative interoperability is the only way we will ever reduce the cost of healthcare and achieve long-term revenue improvements. We have to ask ourselves what value we could generate if we weren’t spending billions of dollars on administrative waste and how that would enable us to make things better for the patient. A secure, decentralized, peer-to-peer blockchain-enabled network provides the infrastructure that can make that happen.

The real challenge that we're trying to solve is how to accomplish this in a decentralized, shared manner. Anyone can build a walled garden. We could say, here's all the perfect use cases we want to tackle and then set about building proprietary, closed technology that everyone has to connect into. In this scenario we'd never hit the point where we reach mass adoption because not everyone wants to work within another organization’s walled garden.

Instead, we must build an ecosystem where everyone can participate and get equal access to the information they need when they need it with permission—all on a single, secure network. As the revenue cycle director at one healthcare system said, “When you start looking at what this type of network allows you to do, it is really a transformational approach to sharing data. And it’s going to fundamentally change the way payers and providers interact going forward.”

Learn about Avaneer Coverage Direct here

How healthcare can become more interoperable with a decentralized network

The back-office administration  of healthcare is fragmented and full of manual, inefficient processes that impact patient care, provider reimbursement, and costs. These processes are a result of our inability to connect effectively. While payers and providers have invested millions in multiple platforms and legacy systems, many still lack full integration and interoperable functionality.

The annual cost of administrative inefficiencies in the U.S. healthcare system has reached into the billions, with billing, coding, physician administrative activities, and insurance administration being primary drivers.

An ecosystem full of obstacles

The challenges of today’s outdated interoperability architecture are significant. From a connectivity standpoint, partner connectivity and workflows require multiple vendors and system integrations. From a data management standpoint, today’s interoperability systems require numerous third parties to support, which has led to a lack of traceability, control, and auditability, as well as security issues. These third parties must aggregate, store, and repurpose data, which means they control the redistribution to payers, providers, and partners. Because of this, payers and providers have little control over when, where, and how they can access it.

Most healthcare organizations have invested in digital and interoperability strategies that, ultimately, have narrow potential and limited scalability. The high costs to maintain connections to multiple third parties require payers and providers to implement and maintain numerous single-use, point-to-point connections.

We now have a web of interconnected systems that don’t easily adapt to evolving trading partner business needs. This has resulted in a wide array of custom, proprietary integration requirements for APIs and third-party platforms—all of which further deteriorate our industry’s quest for interoperability and administrative efficiencies.

Manual transactions, administrative burdens, poor interoperability, and costly and ineffective legacy systems have led to increased total processing spend, provider burnout, poorer outcomes, and limited innovation.

A new kind of interoperability in healthcare

Instead of continuing to add fixes on top of a broken system, healthcare needs to create a new, better system—a system built with a new kind of interoperability.

The term interoperability has different meanings. While we can all agree that sharing data is at the heart of the definition, there are disparities in what that looks like. For example, Fast Healthcare Interoperability Resource (FHIR) has given us a common set of protocols and standards for a payload of transactions on a network. Still, alone, FHIR does not give us full interoperability.

In a truly interoperable healthcare system, data would not need to be requested, aggregated, and validated each time it is needed. Instead, it would be continuously refreshed, always current, and accessible in real time via a secure, decentralized network to those who are permissioned to access it.

What is a decentralized network?

The typical network design consists of a primary server that manages all the information and activities on the network. On a decentralized network, there can be multiple servers acting as primary servers. They each manage information on their own while still connecting with each other. In this way, they “balance the load and distribute the work across the system.” This helps improve network resiliency and data redundancy; if one node goes down, the others are unaffected. Likewise, because data exists in multiple locations throughout a decentralized network, it cannot be changed in one place without changing it across the network.

decentralized network

Benefits a decentralized network can deliver include:

Eliminating data silos and resolving payer-provider friction

Payers and providers have made progress in improving data accessibility throughout their own enterprises but remain challenged to seamlessly make data accessible between organizations. That lack of data fluidity has led to an industry with a complete lack of transparency that has led to friction, distrust, and data hoarding.

With a decentralized network, payers and providers achieve complete transparency and data fluidity, and they do it without involving third parties. This allows for enriched transactions, providing more actionable patient and procedure-level specificity and clarity. Without a third party, payers and providers require fewer transactions to support operational workflows, while improved data insight supports more effective data management strategies.

This new way of transacting healthcare is not just redesigning current processes. It’s not just about streamlining the way we currently do things. It’s about disrupting how we conduct healthcare and doing things differently. It is about simplifying the business of healthcare.

A new era of interoperability

While we’ve made progress on the road toward interoperability, we have to ask ourselves if our current trajectory can get us where we need to be. Avaneer Health sees a new way forward. We are building a digital ecosystem that accelerates change and enables us to reinvent how healthcare operates. Our decentralized network is now live, and we invite you to join us as we reimagine healthcare together.

Reinventing the Back Office to Deliver on the Patient-Centric Promise

Healthcare organizations have talked for years about the importance of the patient experience. Yet, they've experienced several challenges that have kept our patient-centric promise from becoming a reality.

The promise of a patient-centric ecosystem has been the topic of discussion for years. However, healthcare organizations have experienced numerous challenges that have kept our patient-centric promise from becoming a reality. Most people have at least one personal story about a time when our ability to receive timely care for ourselves or a loved one was inhibited by an outdated, ineffective administrative process.

Consider the patient who has recently changed health plans. She wasn’t feeling well and made an appointment to see her primary care provider. When she arrived at the office, she realized she hadn’t yet received her insurance card from the new health plan. She also remembered that when she signed up for her new plan, she canceled her secondary insurance coverage. She thought the coverage might still be active through the end of the month but wasn’t sure. She didn’t have that card either as she didn’t think she’d need it any longer.

Because of the lack of information, the front desk staff had no way of knowing what the patient’s new insurance would cover, what her co-pays and deductibles were, or whether the secondary insurance might still pay a part of the visit. The patient was told she would need to pay the entire amount of the visit up front and then work it out with her insurance companies on her own after the visit.

It is unfortunate that our healthcare ecosystem is so dependent on a patient’s memory and a physical insurance card to be able to ascertain a patient’s primary and secondary coverage information, along with their financial responsibility. These issues can also impact claims processes and increase manual work for both providers and payers. This is just one of many examples of how administrative processes make it difficult to deliver on the patient-centric promise.

Where’s the disconnect?

These administrative processes need to be improved. We know the answer: healthcare systems need to become more interoperable. While we have made progress, research from the ONC shows that in 2019, more than one in every three physicians still relies solely on fax (paper or electronic) or standard mail to share patient information like ultrasound results with providers outside their organization. In fact, just 34% engaged in bidirectional electronic sharing of patient information. Why?

A significant challenge to achieving interoperability is that healthcare’s current data-sharing infrastructure is built upon one-to-one connections. These connections are expensive and resource-heavy to implement and maintain. The result is a lack of transparency that has caused distrust between payers and providers. At the same time, providers are faced with increasingly complex payer requirements that are hard to keep up with, which adds to their already overwhelming administrative load.

A new way forward

These issues could be mitigated or eliminated through a new type of interoperability that allows all healthcare stakeholders to easily connect to a single, decentralized network and then access, in real time, the needed information without the request/respond processes of today. In a world where this type of interoperability exists, the provider in the above scenario would have been able to easily discover the patient’s new coverage information and find out whether her previous secondary coverage was still in effect—all either before the patient arrived or while she was checking in.

In a fully interoperable healthcare system, data wouldn’t need to be requested, aggregated, and validated each time it’s needed. Instead, it would be continuously refreshed, always current, standardized, and always accessible via a secure and direct peer-to-peer network.

Imagine a coverage solution where every authorized participant would have accurate insurance coverage information through a decentralized peer-to-peer network of payers and providers. Leveraging formats such as FHIR, all data would be standardized and ready to be accessed in their EHR. Payers and providers benefit from improved transparency and reduced costs while patients/members benefit from reduced delays in care and fewer surprise bills. This type of immediate data access would eliminate the payer-provider friction that has plagued our healthcare system for far too long—friction that ends up creating a poor patient experience, reduced outcomes, and increased costs for all. 

Delivering on the promise

At its heart, all healthcare is human. At the center of every procedure, every diagnosis, and every transaction is a human being who expects to be treated with dignity in moments when they are most vulnerable. The only way we will be able to meet that expectation is by improving the back-end processes that support and facilitate high quality care. But that requires us to completely reinvent how healthcare is administered. It’s the only way we will truly transform the care experience.

We invite you to join Avaneer Health as we work to simplify the business of healthcare and deliver on the patient-centric promise. Learn more by contacting us.

Why are we still talking about administrative waste?

Are we STILL talking about administrative waste in the American healthcare system? In a word, yes. Why? There are at least 760 billion “reasons” (dollars) annually. According to the JAMA, the United States wastes almost a quarter of its healthcare spending, somewhere between $760 billion and $935 billion, including an estimated $265.6 billion on administrative complexity.

The U.S. spends more on healthcare than any other country but realizes worse outcomes than most. According to a Commonwealth Fund study from 2019, despite spending 16.9 percent of our GDP on healthcare, the U.S. ranked last among 11 industrialized countries on health case system performance measures. Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom all do better when it comes to leading long, healthy, and productive lives. 

We’ve all heard the adage, the best defense is a good offense. In the game of football, that means keeping the ball away from the other team to prevent them from scoring. That may be an admirable strategy on the gridiron, but it can be devastating in healthcare. 

In our game of healthcare administration, it’s payers versus providers and patient data is the football. We punt the data to the other team but work hard to keep them from holding on to it for too long. The goal is control, but it’s the patient that loses. It’s time to pick a different strategy, one built on trust and centered on the good of the patient. 

What is administrative complexity?

Examples of administrative complexity are many and varied, from having to fill out forms in duplicate, rekeying existing data into a system, or managing data via fax transmissions. Most often, administrative complexity is part of billing and insurance-related (BIR) processes. These processes attempt to answer questions like:

Some estimate that nearly half of all BIR costs are for activities that are unnecessary or duplicative. Remember the football game? To further complicate things, the referees are so nervous that one of the teams is planning on cheating (upcoding) that they keep enacting new rules. This, in turn, leads to the players looking for new creative options to “win” the game.

Why does the system work so poorly?

At its most basic level, the system is broken, and all this money is being spent on workarounds that require human intervention. The multiple, often redundant, connection points increase costs, delay care, and create personal and organizational friction. Most of the organizations involved can’t communicate directly as they have their own unique data structures and no way to share the data, even if they wanted to. (And some don’t. That proprietary data is a key business asset.) 

And, of course, there is the fax. You know, technology that died out everywhere else in the 1990s. Other industries have figured out how to electronically share data securely without losing control of prime business assets. The healthcare industry is still sending faxes. Why?

The answer is deceptively simple. Remove barriers to data sharing with an inclusive network. Connect each participant and gives access to permissioned, updated data. 

Going back to our football analogy: Until we play like a team, we’ll never be able to claim victory over this mess that is the U.S. healthcare system.

We use cookies to give you the best online experience. By agreeing you accept the use of cookies in accordance with our cookie policy.

Privacy Settings saved!
Privacy Settings

When you visit any web site, it may store or retrieve information on your browser, mostly in the form of cookies. Control your personal Cookie Services here.

Decline all Services
Accept all Services