While everyone from your local shop keeper to your cable tv and cell phone carrier is billing customers electronically, one industry is lagging behind in terms of electronic billing – – the medical industry. Bloomberg Business reports that the medical sector is the only industry to see increased paper billing and increased payment by physical check in the 21st century. A recent PricewaterhouseCoopers Health Research Institute report cleverly describes the phenomena as “A Horse-and-Buggy model in a world contemplating driverless cars.”
The current payment system used by many medical providers is an artifact from an earlier age. And the paper checks being cut are not just from patients – insurers are also making paper payments with only about 15% of insurers paying providers electronically. Cigna pays 39% of its payments electronically (on the other side of the coin are companies like Aetna that are sending 80% of payments electronically). Large clearinghouses can really add to that increase of paperless billing statistic. Emdeon, a clearinghouse for many medical health plans, spends 25% of its total revenue each year on postage.
Reasons, other than sheer inertia, cited for the delay in moving to electronic billing include a fragmented medical healthcare system, the financial investment needed to jump into electronic billing, and the lack of incentives among providers. And while there seems to be such reluctance, there does exist impetus to move forward in electronic billing. The Affordable Care Act actually limits how much insurance companies can spend on all items other than medical costs and the law required health plans to be able to pay doctors with electronic transfers by January 2014. And Medicare requires doctors who treat Medicare patients to accept electronic payments.
Systems such as Prime Suite by Greenway and Medisoft and Lytec by McKesson have the capability of electronic remittance (ERA) which helps practices post electronic EOB (explanation of benefits). These are posted in seconds, which saves hours of labor thereby cutting practice administration costs.
Patient Statements is another area also lagging as 99% of physicians send paper statements. Patients then need to send a manual check by mail. Solutions by BillFlash can help practices send electronic statements in seconds and receive electronic payments in a flash, anytime all the time. When loop of sending claims and statements, receiving insurance/patients payments, then posting them seamlessly in system, finally comes to an end, the healthcare industry will shave over 50% of their administrative fees, while increasing efficiency and improving cashflow. We have noticed that the less a practice uses electronic tools, the more likely for that practice to surrender and sell their practice to a larger group, or even a hospital. Companies like Microwize Technology help the small and midsize practice to stay independent and utilize the latest technology. Contact our consultants to get more information. Call 800-955-0321.