By: Todd Shiver, EVP, TransCentra
The payments landscape is ever-changing, and the variety of ways in which consumers
pay their bills continues to grow. Whether it is a utility, rent, or a hospital
bill, consumers have come to expect options, including online and mobile portals
to make payments. According to the 2012 Trends in Healthcare Payments Annual
Report, of patients surveyed, 72 percent said they would like to pay their healthcare
bills online. To collect more payments, billing services and their clients should
look at consumer trends and best practices used in other industries to expand
payment channels and meet patient payment expectations.
While some patients prefer to make an online payment, others wish to use a
mobile device or to call in with their credit card information. And, although
many believe paper check use is dying, they still make up a majority of the
payments healthcare providers process. As technology evolves, new payment channels
are emerging for consumers to use; therefore, healthcare organizations should
identify ways they can offer and effectively manage these channels. Collecting
and processing payments from each channel in a separate, siloed manner is not
only inefficient, but does not give organizations the accurate or holistic view
of their treasury management.
Unfortunately, for many healthcare organizations, billing and payment processing
is still very much disjointed and layered with inefficiencies due to the continuation
of outdated, manual processes. While some organizations now accept payments
in electronic forms, such as online and mobile, in many ways the healthcare
industry is still transitioning from paper-driven processes to using modern
technology for billing and payments. According to the 2011 Trends in Healthcare
Annual Report, the administrative costs of disbursing payments contributes to
inefficiencies and costs of over $300 billion each year. It is well known that
the healthcare industry has been slower than other verticals to adopt unified
platforms to manage the entire payment lifecycle regardless of how the payment
was made.
Because this industry is very different from others in that patients typically
receive services without paying upfront or showing proof of their ability to
pay, it is crucial for healthcare organizations to have optimal methods in place
for billing and payments processing.
Many of today's healthcare business offices may offer several payment methods,
but are using disparate systems that are serving their own functions, making
the process more difficult. By continuing to use multiple vendor solutions,
they are sacrificing the opportunity to streamline the billing and payments
lifecycle, which can be done by using a unified technology platform.
These processes often include:
- Intake;
- Patient Registration / Demographic Entry / Scheduling;
- EMR / EHR;
- Coding and Charge Entry;
- Claim Creation / Claim Scrubbing / Claim Submission;
- Patient Statements and Payments;
- Remittance Processing;
- Auto vs. Manual Posting;
- AR Follow Up / Denial Management; and
- Bad Debt Recovery.
Healthcare providers, Integrated Delivery Network (IDNs), billing agencies,
and medical lockbox service bureaus are increasingly looking to technology providers
to help them consolidate billing and payments channels, enabling them to accomplish
more with fewer resources, reduce administrative costs, and improve billing
and accounts receivable (AR) collection accuracy. They simply cannot afford
to have a large number of full-time employees dedicated to manual billing and
payments processing. These labor-intensive processes increase AR lag times,
and with the nature of how healthcare providers most often bill - after the
service is given - technology must be in place to make this a more efficient
and cost-effective task.
When it comes to working with technology providers and implementing solutions
for billing and payments, healthcare providers' financial institutions often
offer the resources and treasury management solutions needed. It is imperative
for automation to be at the core of these solutions to prevent processing costs
from continuing to skyrocket. Many providers leveraging all-encompassing solutions
through their banks are benefitting from having an automated, end-to-end revenue
cycle solution, but there are still many that have not sought out or adopted
this approach to managing multiple channels for billing and payments. Be it
institutional or professional settings, there is still an overwhelming need
for a bank-neutral approach focusing on patient statements, patient payments,
and streamlining the entire remittance process from start to finish. Consolidating
the remittance component will make it easier for hospitals and healthcare organizations
to bill customers as well as collect and process the incoming checks, online,
and phone payments they receive in one single feed.
Today's consumer-empowered culture, where consumers require options in how
they interact with businesses, including their doctors, is forcing providers
to embrace technology and address the growing need to consolidate multiple billing
and payment vendors to one single solution. On top of consumer demands, new
and changing industry regulations require the devotion of resources to updating
processes to remain in compliance, creating an even greater need for more efficient
methods of collecting and processing payments as well as gaining complete visibility
into the organization's cash flow. For instance, the industry's transition to
the International Classification of Disease's (ICD) ICD-10 revision, with an
Oct. 1, 2014, deadline is just one pending regulation for which healthcare providers
must allocate resources. This change alone requires significant alterations
to billing and coding practices - entailing software changes, staff training,
and internal testing - and likewise, every new regulatory mandate is becoming
more difficult to manage. Today's cloud- and software as a service (SaaS)- based
technologies have come such a long way, and enlisting a technology partner can
be key for not only better managing billing and payments, but one that makes
system updates based on each new regulation or change can also facilitate easier
compliance.
In addition to ensuring they can process a variety of payment types, healthcare
organizations need to be prepared to accommodate new, evolving payment channels,
especially as electronic, or e-payments, become more prevalent across every
industry. Through the Affordable Care Act (ACA), Congress sought to implement
electronic transactions to reduce costs and improve efficiency, creating more
uniformity in the implementation of standard transactions and by mandating the
adoption of a set of operating rules for each of the Health Insurance Portability
and Accountability Act (HIPAA) transactions. The Electronic Funds Transfer (EFT)
and Electronic Remittance Advice (ERA) operating rules streamline the use of
Remittance Advice (RA) and codes to mitigate risks and pain points such as unnecessary
manual labor, faulty electronic secondary billing, incorrect billing of patients
for co-pays and deductibles, or posting delay.
Today's systems for billing and payments in the healthcare industry are intricate,
expensive, and continue to in many cases be inefficient. The complexity of administering
billing and payment methods and its attendant costs have continued to grow in
response to an environment with outdated, manual processes, but this does not
have to be the case. In identifying ways to reduce and eliminate the burdens
associated with these processes, organizations need to focus on consolidating
disparate vendors and systems in their back offices and partner with a provider
whose transparent solution can handle the entire billing and payments lifecycle.
Todd Shiver serves as Executive Vice President for Norcross, Ga.-based TransCentra,
the leader in multichannel billing and payments solutions and software to companies
nationwide. He has more than 20 years of executive experience in the financial
services industry, serving as either senior vice president or executive vice
president for several leading financial technology companies. With each new
milestone in his career, Shiver has gained valuable insight into sales and marketing
best practices,
allowing him to manage multiple product and service areas with great success.