• Practice Solutions

Cost-Benefit Analysis of Paper vs. Electronic Claims

For the longest time paper claims were the dominant method of being reimbursed. Even to this day many mental health providers still utilize paper claims. However, this will present an issue in the next 5 years. The reason is that many insurance companies are beginning to adopt policies that restrict the use of paper claims.

Outside of payer policies, paper claims have become expensive and require significantly more cost to the practice owner than electronic claims. Don't believe me?

Here is the cost-benefit analysis to prove it:

1. Paper Claims Cost More Money

Here is a breakdown of the costs of paper claims:

CMS-1500-02/12 forms = $8.00 per 100 claims or .13 cents per claim

Envelopes = $21.50 per 500 or .23 cents per envelope

Postage = .48 per stamp

Assuming you batch 7 claims into an envelope that requires 1 stamp, you spend $3.00. Assuming you submit claims for 48 weeks (4 weeks of vacation) you spend $336.00 a year submitting submitting claims.

However, using an EHR you can spend .98 cents to send 7 claims. This saves you $2.02 or $289.00 a year!

2. Paper Claims Cost More Time

Here is a breakdown of the time you spend on paper claims:

2 minutes to print

3 minutes to sign

5 minutes to fold and stuff

5 minutes to stamp

~10 minutes to mail

Total = 25 Minutes

Assuming you submit claims once a week for 48 weeks (4 weeks of vacation) you spend 20 hours a year submitting claims.

However if you use an EHR, it takes about 30 seconds or 24 minutes a year!


It is clear that if you are spending time and money on paper claims you could be saving considerable amounts of money and time by doing it electronically. It can be hard to make the change to a system if you are unfamiliar with an EHR, but you will be glad when you do. It will help keeping track of claims, it will save you time and money every week, every month, and every year.