5 ways to use payments strategically
January 12, 2013 in Medical Technology
Here’s a dirty little secret about healthcare: Money is a really big deal. Practices need to be reimbursed, the lights need to be kept on, and even doctors need to get paid. Managing the flow of cash in any business can be a head-scratching affair, but with a myriad of patients, providers and payers, the revenue cycle in healthcare is fraught with black holes that gobble up dollars.
According to Kevin Arner, CEO of PaySpan, one of the biggest hurdles to jump is transitioning to electronic payments across the board. Using electronic payments strategically “expedites the exchange of funds and ultimately provides a more detailed reconciliation in the payment stage,” Arner says. He points out while that electronic payments are standard in other businesses, they “have been overlooked” in the healthcare world for many.
1. Use and promote electronic payments. Most people wouldn’t believe how many practices still don’t handle plastic. Arner says providers who use non-automated forms of payment will see “problems manifest in long AR cycles, cash flow constraints” and other means of tracking and generating revenue. By beginning the financial dialogue with a patient early and doing so electronically, Arner says a healthcare provider will end up getting the full reimbursement. He notes that the older model of payment, where a payer transfers funds and leaves it at that, can hurt providers, who may find that they can claim more reimbursements after the treatment has ended. By adopting and promoting an electronic system, and by engaging payers and patients alike, the resulting dialogue and good records ensure a more open revenue flow.
Getting all the players on board isn’t as much of a hurdle as one might think. Arner says that it can be “as simple as requesting electronic payments from the payers and from the patients.” Almost all payers are able to submit payments through a third-party electronic payment system, and a vast majority of patients would be happy to whip out the plastic. “It’s surprising how few providers petition and reach out to payers for electronic payment,” says Arner.
2. Incorporate fraud and abuse prevention technology. As the process of paying a provider electronically becomes more widespread, so will the complacency surrounding it. When transferring money to a doctor is as easy as buying an app, “The easier it is for people to become less attentive to errors like fraud and abuse,” says Arner. Best, then, to hit hard and fast and establish a strong security regimen sooner rather than later. The good news is that because so many other industries have been using electronic payments for a long time, there’s a wide range of industry standards that have been established. The trick, says Arner, is being sure to adhere to them and holding your partners accountable to the same standards. “It’s important to utilize partners that are compliant with security standards, and [who have] all of their technology up to date.”