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Organizations are faced with a variety of choices when it comes to

potential electronic payment solutions. Finding the right product

for an organization is more than checking a capabilities list; it also

needs to include evaluating service quality, implementation timelines

and associated integration costs. This report will educate the user on important

considerations when conducting a vendor review.

Electronic Adoption – Is it Really Happening?Indeed, it is. The change is occurring, in part, due to the regulatory development

of global operating rules related to the transmission of electronic funds transfer

(EFT) and Electronic Remittance (ERA). 1 Effective on January 1, 2014, the proposed

new operating rules in development by CORE/CAQH in response to Section

1104 of the Affordable Care Act (ACA) is the driver for the insurance industry to

become compliant. This legislation compels healthcare payers to have the ability to

transmit electronic payments to any provider that requests transmission of payment

and remittance data in this manner. Under the proposed new rules, each health plan

will be required to attest to their compliance with significant penalties as a deterrent.

As these requirements and rules further develop, many health plans will rely

Considerations When Evaluating Vendor Solutions for Electronic Adoption and Compliance

Written by Jennifer Plake and Tom Davis

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on their payment administrator to

assist with this compliance. As the

payer steps in, many may find they

need help from a third party vendor

who has already achieved CORE

certification. When choosing a vendor

partner, there are several important

factors to consider.

• Do your homework –

Multi vs. Single Source Solutions

• Vulnerabilities and security risks

• Timeline for achieving compliance

Do Your Homework – Multi vs Single Source Solutions

Multi-Source Solutions Some

vendors appear to offer everything

you need. However, when more closely

examined, these vendors specialize in

only one payment resolution method.

As an example, there are many

electronic vendors offering a virtual

card driven solution. EFT capabilities,

which deliver the compliance you

seek, are often limited with insignificant

levels of providers actually enrolled to

be paid in this manner. This creates risk

and may introduce new complications

in your workflow as often time the

burden will fall back upon the payer

to engage and enroll providers or

seek additional vendors to provide the

needed EFT adoption.

These suppliers seem attractive

at first because they offer a lucrative

revenue-sharing option, generated

from the virtual card. However, the

virtual card is only a single piece

of evaluating a sustainable long-

term solution. When conducting

your vendor evaluation, important

considerations should be:

• Do they have online support for

providers to easily sign up for

compliant EFT/ERA and opt-out

of virtual cards?

• Do the various payment options

require a separate and distinct

funding process?

• Can they produce a compliant

EFT/ERA from your data file?

• How many EFT providers do

they have enrolled?

• How do they enroll

EFT/ERA providers?

Payers evaluating these solutions

should also pay close attention to the

implementation plan and payment

reconciliation workflows. Many times

multi-source solutions issue and

settle payments from three separate

sources. Your internal workflow can

become cumbersome and require

additional support to reconcile all of

your payments. Be sure to request a

documented Implementation Plan with

timelines and resource expectations.

You can avoid a failed or stalled

implementation by using a well-defined

implementation plan to set proper

expectations. However, be aware of

indicators that you are implementing

multiple payment processes with a

single vendor. If the vendor issues and

settles payments from different sources

based on payment modality, daily

workflows and processes may become

more complex from your current state.

While quality multi-source

products can produce beneficial

results, expenses can climb if you have

to add two or more multi-source

vendors that each solve a single

need. The payer may feel they need

to reinvent themselves in order to

accommodate each vendor’s separate

methodologies. Be confident that

you do not need to implement a

short-term or incomplete solution. A

multi-source solution usually cannot

manage all of your payments without

complicating your daily operations.

Single Source Solutions Single

Source solution vendors can manage

all of your payments and offer the

payer a steady reconciliation process.

A single source solution will preclude

a payer from interfacing with multiple

vendors, banks or other interfaces of

the payment stream. Effective solutions

should include important features

such as the ability to link the real-time

payment status to the adjudication

system detail and originating funding

event. This simply means that a payer

can locate all relevant details for all

payments through a single data source

including images of cancelled checks.

Additional important distinctions

should focus on a long-term vision

of migrating providers to electronic

payments without exclusive

dependence upon a virtual card. Payers

should ask very specific questions

about the number of providers

enrolled for EFT and for specifics

on their population of Provider Tax

ID’s. If the vendor cannot confirm a

match of 25% or greater, the program

will very likely achieve substandard

results. ERA capabilities should also

be properly vetted in this discussion.

Confirm the vendor’s capabilities to

produce a compliant 835 from your

current extract or print file. Ask specific

questions about their experience

with different adjudication systems,

current production volumes and if any

crosswalk or tables will be required.

Any vendor under consideration

should have well-documented

implementation plans and weekly

accountability calls. Newly

implemented payers will be a very

important reference point to confirm

associated implementation timelines.

The implementation team should have

the ability to manage and lead the

customer through a fully customized

implementation that accounts for

unique customers or plan designs.

18 The Self-Insurer | www.sipconline.net

The result of these efforts is a refined, streamlined daily operation and workflow.

A quality decision under a single source platform should include:

• Market leadership in virtual card and EFT/ERA distribution

• Provider payment preference management

• Compliant EFT/ERA from your existing data file

• Single resource for reconciling all payments – card, check and EFT

• Implementation results that can be verified through client references

Consider Vulnerabilities and Security Risks A critical step in the evaluation process is security. In healthcare payment

processing there are many possible exposures such as private health information

and banking transaction details. In your evaluation, ask how personal health

information is protected and how security breaches and financial loss are avoided.

Established vendors are comfortable providing documented support of their

security infrastructure and software protocols along with backup, failure and

redundancy programs. Further, they can offer a voluntary third party audit of

their organization proving their claims. This level of scrutiny compliance with not

only healthcare regulatory procedures such as HIPAA and ACA, but financial

transactions are protected as well through FDIC insured payments and Payment

Card Industry Data Security Standards (PCI DSS) compliance.

With the aforementioned mandate and operating rules, third party payment

services have quickly become a growth industry with many new entrants. Proper

due diligence should include specific questions about a vendors growth and

scalability. Companies committed for

the long-term should conduct regular

assessments and ensure that growth is

aligned with infrastructure capabilities.

In a world where Fortune

100 companies are subject to

data breaches, it is imperative to

understand what measures a vendor

takes to protect your data. With

user interfaces and provider portals,

there are often many access points

that expose a company to potential

breaches. Vulnerability testing and

regular static scans are indicators that

your vendor is taking the necessary

precautionary measure.

If the vendor uses a series of

vendors themselves to provide

their services, be cautious that all

parties maintain the same level of

security standards. Distinct lines of

responsibility and liability should be

clearly defined in contracts.

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Timeline for Achieving Compliance Achieving compliance quickly can be a real possibility. Once the due diligence

process is complete and you have narrowed your vendor selection, you can

verify your selections are CORE certified if you have not already by going to

http://corecertification.caqh.org/CORE_organizations. Each health plan can

begin achieving compliance on day one of production with a CORE Phase III

Certified vendor.

A fully engaged payer and vendor can complete an implementation in 6-7 weeks.

If your due diligence indicates that your vendor selection cannot perform within

these parameters with validated references, this may be an indication

to consider other options.

Electronic payment solutions range in quality and effectiveness. To ensure

your organization partners with a vendor that can deliver the capabilities your

organization needs ask the following questions: Do they provide a single source

solution to handle all of my payments seamlessly? Can they provide documented

support of their security infrastructure and programs? Does their solution allow

my company to achieve compliance quickly? If the answer to each of these

questions is yes, then you have found a quality vendor. ■

Tom Davis is the Executive Vice

President of Business Development

and Jennifer Plake is the Strategic Sales

Associate at ECHO Health, Inc., a

leading provider of electronic healthcare

payment solutions. Serving more than

50,000 ERISA health plans and fully

insured groups, ECHO processes more

than $10 billion in payments annually

to providers and members through

industry-leading payers. Founded

in 1997, ECHO is a privately held

company located in Westlake, Ohio.