Future of healthcare payments

Slowly but surely, big changes are coming to health care payments. As a heavily regulated industry, health care providers must place the security of patients’ personal and financial information above all else, making it difficult to rapidly adopt new technologies and processes. But change is inevitable, and providers are increasingly seeking out payment solutions that help enhance the convenience, ease and accuracy of the patient payment process while also addressing the demands of patients accustomed to the convenience of payments in consumer markets.

“Health care software and digital payment solutions were developed in different industries and as different platforms, and until now there has been little joint innovation,” explains Andres Jimenez, Director, Healthcare Receivables Product Lead, Global Transaction Services at Bank of America. Consumers, however, expect their health care payments to be efficient and streamlined, integrating seamlessly with other systems in place — from appointment scheduling and pre-consultation to point-of-care collections and post-service. “Now, payment portals are bridging the gap between technologies to seamlessly enhance the patient experience,” Jimenez notes, adding that the newest platforms can integrate with the medical software in a provider’s office, enabling patient payments to be received in real time and automatically processed into the provider’s system — while remaining in compliance with the security and privacy standards required by state and federal regulations. That has allowed for solutions that address some of the biggest challenges within the deeply complex and layered landscape of health care payments.

Collections have become more complex

In the past, major insurers paid nearly all provider charges. These large companies had relatively efficient systems in place for reimbursing doctors. Now, company health care plans have shifted a greater proportion of costs onto individual patients in the form of copays and hefty deductibles. This means that providers have had to take on greater responsibility for the billing and processing of patient payments — as well as for late payments — from many more sources.

“Providers are looking for solutions that make it easier for them to know how much their patients owe and how much the insurance company will pay them while also making it easier and more convenient for patients to make their payments,” says Kevin Kidd, senior vice president, health care strategy at Bank of America, which offers secure healthcare-focused payment technologies and solutions.

Inefficiencies are still prevalent

Compounding the problem, many providers still use a combination of paper invoices and faxes to exchange information about payments. “This creates significant inefficiencies around how much the insurance companies will pay and how much the patient owes,” explains Kidd. “If you don’t know those things, how can you ever collect the right amount?”

An integrated payment solution can offer the provider the opportunity to collect fees, such as copayments, as soon as a patient makes an appointment via the practice’s electronic appointment system. This kind of functionality can result in significant improvements in revenue cycle, with practices no longer having to wait for months for the patient to respond to an invoice post-treatment. 

Patients are seeking convenience

Jimenez goes on to describe how, due to shouldering a greater portion of the financial burden for their medical expenses, patients are more likely to focus on value and convenience in their provider choices. “Younger patients have become accustomed to using smartphones for shopping and paying bills. Consequently, a provider’s ability to offer digital functionality for online registration, bill pay and medical record access could prove instrumental in whether younger patients maintain a close relationship with a particular provider.”

The pandemic also accelerated the shift toward digital payments. An increasing number of patients opted to use telemedicine during the pandemic instead of visiting an office, and payments for telemedicine are almost always digital. Now that patients are returning to in-person office visits, many still prefer to wave a contactless card rather than handle a paper bill and write a check. “There is much more interest in adopting a touch-free workflow,” explains Jimenez. “Contactless digital payments are quickly becoming the recommended norm, and touch-free payment devices can help limit the health care risks associated with physical contact.”

Integrated systems now allow for privacy and security

When medical software companies were first developing their systems, they intentionally left out digital payment processing. This was because of the complex liability and regulatory issues involved in health care privacy, such as the Health Insurance Portability and Accountability Act (HIPAA), which requires that providers keep patients’ personal information safe.

The newest digital platforms, however, store patient data separately from their financial statements, then reconcile their payments with the providers’ financial statements. In addition, payment information is encrypted using multifactor authentication and network segmentation. While payments are covered by the HIPPA legislation, a special exception allows providers to share patient data with the digital payment provider.

New regulations are driving transparency

One reason for the complexity of medical payments is that, for the most part, neither the provider nor patient know the real cost of treatment at the time the patient receives care. Paper forms are submitted to insurance companies, and the provider can’t bill the patient until the insurance company has announced how much it is willing to reimburse. The No Surprise Act, which takes effect in 2022, prohibits out-of-network doctors from submitting large, unexpected bills to patients. It also requires timely, up-to-date, transparent billing information for patients and providers.

Providers are also keen to engage patients outside of their point of care by using secure portals that allow patients to view their records, make appointments and receive payment reminders via text. Kidd says that in the not-too-distant future, patients will be able to pay bills directly from an app on their phone, removing some of the most painful headaches from the medical payments system.

“Health care is just extremely complicated when it comes to payments,” Kidd says. “If a provider can’t collect from a patient, they’re giving up a lot of meaningful revenue. Our goal is to enable and expedite that process.”