With many healthcare offices closed or working with a reduced staff, there’s never been a better time to re-evaluate your health insurance payment method. Making the switch from checks to ACH can result in significant improvements in efficiency, payment transparency and importantly getting funds into your account more quickly and easily.
The Current State of Healthcare Payments
For many decades, healthcare payments have been paper based with lengthy explanations of benefits documents and reimbursement forms, envelopes and checks.
What are the pain points that come with paper checks?
- Arrival time
- Open time
- Time to be accounted for
- Deposit time
- Clearing time
And the clock isn’t the only setback here, as there are monetary losses as well. Consider this: your business may be spending up to $24,540 annually to process checks.
These stats should be setting off alarm bells for everyone. In a world of innovative technology, there are many options to consider that help providers increase their operational productivity.
Checks are still the standard way of business for many, but they have their drawbacks. They are inefficient from an office work standpoint. And can be easily lost in the mail and are a perfect target for criminals. Savvy fraudsters make a living off forging signatures and altering payment amounts.
Luckily, the integration of technology into the payment’s realm is making things better for everyone.
The potential efficiency gains from automating repetitive, administrative tasks is tremendous. By using technology, companies can refocus their workforce on more high-value tasks. The Council for Affordable Quality Healthcare (CAQH), an alliance of health plans and other interested parties, has long been advocating for greater use of electronic healthcare transactions to reduce administrative costs and improve accuracy.
In today’s landscape, there are two primary options for payments.
Virtual cards are a one-time use credit card number for a specific amount and claim. Office staff enters it into a credit card or virtual terminal for payment to the provider’s bank account. Key advantages of this option are the minimal effort to get started and a familiar process. Virtual cards can be downloaded from a portal, faxed or mailed. It’s always recommended to use the portal download option, as fax and mailed virtual cards have higher risk of fraud or error. Zelis’ consolidation feature, allows for all daily card transactions to be combined, reducing time spent keying card numbers – where errors are most likely to occur.
Typically, the cost of the virtual card transaction is made up of three parts: interchange fees, brand fees (such as Mastercard’s) and the payment processor’s markup. Together, these parts make up a “discount rate”. Costs range 3-6% of a payment, plus staff’s very real time cost of keying the card. In addition, there’s also a time delay when paying by virtual card. And while virtual card is faster than check, it’s definitely not the fastest or lowest cost option available.
When an ACH transaction (a.k.a., direct deposit) is processed, funds are automatically deposited to the providers bank account through the Federal Reserve. This option takes little time up front to set up because a provider must share their bank deposit information. However, the savings, speed and efficiency of future payments are completely worth it. ACH makes perfect sense, especially when you consider the benefits:
Compared to virtual cards, the fees are much lower with ACH. And don’t forget about the cost savings that comes from saving your staff’s time. On both sides of the spectrum, for the payer and the provider, paper checks call for administrative work. With ACH, administrative staff get back their valuable time and can use towards something more productive for your office needs.
CAQH and NACHA provide these estimates:
- $4.31: average provider cost per manual claim payment transaction
- 40 minutes: time providers saved by automating key claims management processes
Need more of a business case to switch? Continue reading.
When transfers are made electronically, it provides better transparency into your payments. Almost immediately after the transaction goes through and is received, both parties get a notification.
A Greener Approach
When you think about the ever-growing amount of paper still in the healthcare, do you ever wish there was a better way to conduct business? Going paperless is less of a nuisance and better for the environment.
Because the transfer is made between two banks, ACH has no chance for human error. Glean insights you never knew about with nearly real-time visibility into your finances as transactions clear faster. With healthcare payment complexity on the rise, it’s never been more important to have a system in place that can guarantee accuracy.
Fraudsters are less likely to target ACH than other payment methods. And when you enter your banking details into the portal, there’s no need to be concerned regarding online security. Our single sign-on dashboard is fully encrypted to protect against threats from hackers. In addition, Zelis Payments also uses a pre-note process that tests the banking account before deposits are made. This feature ensures that your funds are sent to only you and not a cyber criminal.
What’s the cost of ACH? Less than 2% of each transaction. And it becomes even more efficient with larger volumes of payments. Need to specify how your payments are made? ACH enables payments to be processed individually by claim, by payer or all payers combined. Whether you’re interested in speed, efficiency or flexibility, ACH is the payment method for you.
ACH: Endless Value for Healthcare Payments Partners
This payment method is on track to become a new standard of doing business. And payments partners such as Zelis Payments are delivering more value every day.
By partnering with Zelis Payments, you can benefit from:
- A compressed revenue cycle because payments can occur up to 20 days faster than with paper checks, enabling cash flow increase and improved business management.
- Enhanced data quality since data coming directly from the payer is detailed and error-free.
- Improved accuracy due to less manual entry.
- More choices for payment and data delivery options to suit your needs depending on your workflow.
- Added services with fraud monitoring, clearing house and bank assistance as well as a dedicated service center to address any of your questions.
Understanding and consolidating data has never been easier with our single sign-on portal. From billing companies, to providers, to hospitals and health systems, all our clients have access to the central portal where they can manage payments to and from multiple payers and payer groups from a single account. All data is aggregated into one location and one file, so you can quickly interpret your information.
Zelis is also CAQH CORE® certified. What’s that mean? Our service has undergone stringent testing and approval for supporting standards that ensure a high volume of effortless transactions across the healthcare industry.
We manage payments for more than 330 payers including health and dental plans, workers’ compensation payers and healthcare benefits administrators, representing over 32,000 individual groups.
How The Future Will Shape Healthcare Payments
Healthcare is ripe for technological disruption. Sure, paying by check works, but that doesn’t mean it’s the best way to do things. The legacy method of paper-based payment is quickly losing support as healthcare becomes more advanced. As adoption of ACH increases and healthcare digitization expands, there should be no doubt that electronic payments will help lead the way.
If improved speed, cost, accuracy or eco-friendliness sound good to you, make the switch to Zelis ACH with the unsurpassed support of Zelis Payment services.