- Healthcare, an industry that lags behind others in technology adoption, is slow to embrace innovative solutions that address business challenges. For payers that want to implement electronic payment systems to improve claims reimbursement, it is likely that provider apprehension is a critical barrier to innovation.
Providers may not move towards an electronic payment system if they feel that the tool will incur additional costs and fees. Seventeen percent of provider practices pay fees in order to use an electronic payment system, according to research from MGMA. In addition, providers may not feel as though an electronic payment system could alleviate their organization’s revenue issues.
What providers may not understand is that commercial payers typically offer multiple electronic payment options to lower administrative costs and reduce delays in claims payments.
Payers that are aiming to increase the use of digital payment systems must educate providers about how these systems work, inform providers of their benefits to their revenue cycle, and communicate e-payment benefits with detailed messaging.
How can payers foster provider adoption of electronic payment systems?
Defining electronic payment terms for new providers
Payers must close the knowledge gap if they wish to see higher rates of electronic payment adoption. Educating partners about available options is an important first step for reducing skepticism and encouraging participation.
An electronic funds transfer (EFT) is the direct deposit claim payment made by a payer to a provider. Many vendors and electronic solutions specialize in EFTs for the purpose centralizing electronic provider payments.
Provider funds are then transferred through an electronic clearing house (ECH) or a virtual credit card (VCC) to securely move payments from a payer to a provider’s bank account.
Electronic data interchange (EDI) is the process by which information and documents are shared from one entity to another. Payers use EDI to reduce the need for paper-based claims submission and to drive down administrative time and costs related to submissions.
An electronic remittance advice (ERA) is a method of delivering claim payment and remittance details to providers. ERA transactions include information such as the status of claims payments, financial errors, and payer responses to claims.
Communicating the benefits of electronic payment systems for providers
Hospitals wait an average of 16 days longer for payments when a claim has been denied. Relying on paper claims processes may extend this wait even further, leaving providers and payers in administrative limbo.
The findings from the 2016 CAHQ Index report on electronic payments reveal significant opportunities for providers to save by switching to electronic strategies.
“On average, each manual transaction costs providers and health plans approximately $3 more than each electronic transaction,” CAQH said. “This cost difference represents an incredible savings opportunity, given the more than three billion manual transactions conducted annually between commercial medical health plans and providers.”
Electronic payment systems can reduce costs for providers and drive a potential industry-wide savings of $240 million just for claims submissions, the report added.
CAQH found that the opportunities for provider savings are exponentially increased if payers and providers move other claims payment processes, such as benefit verification, prior authorization, claims payments, and readmittance, to electronic formats as well.
“Adopting automated processes for just these transactions could result in an estimated $7.9 billion savings for providers,” CAQH said. “Similar to health plans, the greatest savings opportunity for providers is eligibility and benefit verifications, accounting for over $4.3 billion in potential cost savings.”
Across all industries, the use of electronic payments is increasingly rapidly. Over five billion automated clearing house (ACH) EFT transactions occurred in the first quarter of 2018, representing a 5.9 percent increase from the same time in 2017, says the National Automated Clearing House Association (NACHA).
“The ACH Network is a vital component of the US economy,” said NACHA Chief Operating Officer and General Counsel Jane Larimer. “The robust growth demonstrates that the ACH Network provides substantial value to consumers, businesses and financial institutions that need to make payments.”
In healthcare, ACH EFT use has also shown significant growth. In 2014, nearly $876.6 billion in claim payments from payers to providers were completed through ACH EFTs.
How payers, providers are succeeding with electronic payments
Collaborating with industry leaders in payment transactions, and sharing those efforts, have helped payers tailor communications to providers about electronic payment use.
For example, Humana offers an EFT and ERA service to providers called the CAQH EnrollHub that allows providers to submit claims information in one electronic portal. Humana then reviews a claim and sends the finalized reimbursement to a provider’s bank account.
Providers sign up online with their tax information, national provider identifier (NPI), contact information, and bank account details. No fee is required to use the service.
Humana also offers a JPMorgan & Chase single-use VCC account that sends remittance and payment information electronically to providers.
According to the service’s FAQs, the account sends providers’ payment information via email. Providers enrolled in the service can use a code to access payment confirmations and payment updates.
Commercial payers also offer a variety of other e-payment solutions for providers.
Aetna offers electronic claims submissions through a mix of free EFT and ERA services and several vendor options to help providers receive faster payments, including no-fee NaviNet.
An Aetna-provided ERA service called PNT Data delivers electronic transactions between Aetna and providers free of charge. Providers can also access information about claims submissions, financial approvals, processing errors, and payer responses.
Aetna also allows providers to choose from one of several vendors if they have a preferred solution. The payer informs providers they may be subject to user fees if they use these options instead of the NaviNet service.
Payers that are able to achieve network-wide adoption of electronic payment systems can deliver financial and administrative ROI to their providers.
Anthem’s EDI solution processes 93 percent of payer claims and has been able to save significant time and costs for providers submitting claims for reimbursement.
Anthem’s EDI saves providers $10.00 per submitted claim based on reductions in paperwork and manual intervention, the payer says. The EDI also reduces spending on postage and allows claims submissions around the clock.
In addition, the EDI also allows providers to submit local, national, and government-based claims for payment, which is then redirected to the appropriate payer.
Electronic payment systems allow payers and providers to collaboratively improve the claims management process and enhance payment accuracy within a single platform. Digitally-based claims payments may lead to more efficient healthcare systems that allow payers and providers to focus on other organizational improvements.