The changes coming to our health care laws as a result of the recently upheld Affordable Care Act provide real opportunity for banks to help their physician customers address some of their most pressing business challenges.
According to a recent survey of 673 physicians conducted by MDLinx, doctors cited rising business expenses, administrative hassles and shrinking insurance reimbursements as some of the issues that threaten the financial health of their businesses. How can banks help with these issues? Let’s look at three areas:
1. Health Care Specific Lockbox Services. Today an increasing number of physician groups and hospitals are relying on their banks to provide generalized lockbox services such as the capture of deposits and imaging of related paperwork. With the advent of health care specific lockbox services, health care providers now can expect additional processing of items such as Explanation of Benefits (EOBs) that require special handling or sorting (e.g. zero pay EOBs) and increased use of imaging and optical character recognition to lift remittance data from paper EOBs and checks. The resulting data can be transformed into Electronic Data Interchange (EDI) files for automatic posting to the providers’ systems. In addition, correspondence related to claims can be handled through the lockbox. These combined services can greatly improve the providers’ efficiencies related to posting remittances to their billing systems.
2. Reconciliation Services. Uniquely, banks are the focal point of all payments in the health care revenue cycle. Banks do not, however, receive all the remittance data associated with the payments. In addition to the significant opportunity to aid health-care-provider customers with the conversion of paper EOBs into EDI 835 auto-posting files and the associated check payments that arrive at the lockbox, an increasing percentage of the volume of payments is delivered via electronic funds transfer on the Automated Clearing House (ACH) network. These payments arrive decoupled from the associated electronic remittance advice (ERA), which travels from the insurance companies back to the providers through the health care clearinghouse, through which the claims was originally submitted. By redirecting these ERAs to the banks and having the banks reconcile the payments to these transactions, banks can close a productivity and financial gap for their health-care-provider customers by not only providing an auto-posting file but one that is already reconciled against payments already received and deposited in the providers’ bank account.
3. Patient Payments. An additional service that banks and their lockboxes can provide is the processing of patient payments. Patient payments represent some 14% of all payments to providers and are expected to grow substantially as the new health care law takes effect. With consumers increasingly responsible for a greater share, the volume of individual, manual posting to the providers’ billing systems will, of course, grow. Banks can utilize their lockbox imaging systems, including OCR, to transform the patient pay coupons and check deposit information into a data file for posting against the outstanding patient responsibility.
In the end, outside of the benefits many consumers will experience from the rollout of the new health care law, the greatest opportunity for providers may lie in teaming with their banks. Through automation and the effective use of information technology resources they can reduce business expenses, eliminate administrative hassles like manual posting of payments and maximize visibility into transactions and cash flows as insurance reimbursements continue to shrink and patient responsibility grows.