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billing and payment processing is still very much disjointed and layered with inefficiencies due to the continuation of outdated, manual processes.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.