The Value of Electronic Payments in Health Care

Presented by:Marla K. (Smith) Moszer

Globe UniversityAugust 31, 2011

Key Points to be Covered• The Government’s influence to use

electronic payments in Health Care

• Private payers’ convenience with electronic payments & increased collectability

• The use of electronic payments in a large facility vs. a small facility

• The future of electronic payments in Health Care

Major ConcernsRising Cost of Health

CareIncreasing Political

Control

History of Electronic PaymentsWestern Union 187 1

(2009)

Electronic Data Interchange (EDI) & Electronic Funds Transfers (EFT) 1970’s

Credit Card Payments in the 1980’s

The 1990’s – a time for advancement

Can Electronic Payments Help?

?

The GovernmentHealth Insurance

Portability & Accountability Act (HIPAA) 1996

Administrative Simplification Compliance Act of 2001

Government payments exclusively electronic

Health Care Reform (“ObamaCare”) by 2014

The Private Payer & Electronic Payments

Common Methods of Electronic

Payments

Credit Cards

Automatic recurring debit

Payers in 2016 = $4 trillion

Public Insurance

Private Insurance

Patient Payer

$1,650 How MuchWill

BeWritten

Off?$1,940

$435

Amounts in billions

“77% of providers say patient responsibility is on the rise” (InstaMed, 2011)

(Downey & Hanson, 2011)

Electronic PaymentsLarge vs. Small Facility

Allergy & Asthma Specialty Clinic

Rice Memorial Hospital

The Large Facility

Rice Memorial HospitalWillmar, MN

Jackie Hinderks, Director of Revenue & Reimbursement

“Eliminate paper!”

Jackie Hinderks

Electronic Payments atThe Large Facility

ReceivablesCredit Card Payments

In PersonOnline Payments

Credit CardE-checkDay or Night without

making an extra tripAutomatic Payments

Finance charge less than credit card

Reduces time & paperwork

Electronic Payments at The Large Facility

ReimbursementsElectronic billingPaper Statement Currently

350-page reportAll day to post (Blind et. al., 2007)

Inefficiencies without bundling

“…it always makes sense to do more with less.” – Hinderks

One day, all facilities can be joined electronically.

$35 billion & 2.5 billion

pieces of paper(Blind et. al.,

2007)

Electronic Payments at The Large Facility

PayablesDirect payments to

vendorsDirect deposit of payroll

Prepaid debit card option

No printing or postage with online paystubs

Paycheck gets to the right person

Not lost in the mailMore dependable

The Small FacilityAsthma & Allergy

Specialty Clinic, Willmar, MN

Jim Ellingson, Co-owner/Office Manager

Positive attitude toward electronic payments

Electronic Payments atThe Small Facility

PayablesVendor payments onlineSaves around

$2.00/payment

ReceivablesCredit Card PaymentsRecurring Automatic

PaymentsConvenienceMore Manageable for

PatientSaves Time & Money

Electronic Payments at The Small Facility

ReimbursementsInsurance coding

electronicallySame service applies

payments to accounts automaticallyTakes 3 days to 2 weeks More speedy than self-

payMonthly Fee + 6-month

membership

Electronic Payments atThe Small Facility

Complaints

Reimbursements not instantaneous

Recurring payments can be returnedNSF or Closed AccountLittle extra effort to

collectGovernment involvement

Can’t handle their own debt

Putting the little guys out of business

2008 2009 2010 2011 (1st qtr)

2.70%2.43%

2.26%2.06%

PPD-type Return Rate**

(EPCOR, n.d.)

Electronic PaymentsLarge vs. Small Facility

Small FacilitySpecialty Clinic

Positive review of Electronic Payments

Costs = Expenses Saves Time & Money Little negative to say Pushing for

technological advances to improve efficiencies

Positive review of Electronic Payments

Costs = Expenses Saves Time & Money Less cost efficient for

smaller clinic than large facility

Difficult to keep up with legislation & upgrades

Convenience is worth cost

Large FacilityHospital

Expenditures of theHealth Care Industry

$750 billion

$7.5 billion30¢ on the dollar

1% of administration costs

$2.5 Trillion in Health Care Expenditures

2009(Toutman et. al., 2010)

ConclusionRelationship

Electronic payments Health Care

BenefitsFinancial Compliance

Effectiveness of Collections Health Care Reform

Increasing Efficiency Administrative Simplification

=

Questions

?

Thank youfor your time!

ReferencesBlind, J., Hatch, T., Lauer, E., Lazenby, G., & Slater, J. (2007, June). Provider Tips for Moving to Electronic Payment Receipt and Reconciliation. HFMA Executive Roundtable, (June 2007),

Downey, D. E., & Hanson, S. (2011, April 4). Building a Bridge to Healthcare Payments.NACHA. Retrieved from http://healthcare.nacha.org/financial-institution-resources/presentations/building-a-bridge-to-healthcare-payments-how-banks-providers-work-together/

Ellingson, J. (2011, August 13). Electronic Payments at Asthma & Allergy Specialty Clinic. Interview by M. K. Moszer. Capstone Paper by Marla Moszer. Globe University, Richfield, MN.

ACH Statistics. (n.d.). Retrieved August 27, 2011, from EPCOR website: http://www.epcor.org/imis15/EPCOR/ContentAreas/Resources/NACHA_Rules/ACH_Statistics.aspx

Administrative Simplification Compliance Act Enforcement Reviews. (2005, December 14). Retrieved August 8, 2011, from U.S. Department of Health & Human Services website: https://www.cms.gov/ElectronicBillingEDITrans/04_Administrative%20Simplification%20Compliance%20Act%20Enforcement%20Reviews.asp

Hinderks, J. (2011, August 3). Electronic Payments at Rice Memorial Hospital. Interview by M. K. Moszer. Capstone Paper by Marla Moszer. Globe University, Richfield, MN.

Trends in Healthcare Payments (Annual Report: 2010). (2011, March). Retrieved from InstaMed website: http://www.instamed.com/news-and-events/trends-in-healthcare-payments-annual-report-2010

Troutman, J. W., Lisi, D., & Mayerick, B. C. (2010, April 26). E-Payment Cures for Healthcare.NACHA, Herndon, VA.

History. (2009). Retrieved August 13, 2011, from The Western Union Company website: http://corporate.westernunion.com/history.html

Author Note…This research was conducted as a Capstone project of Marla Moszer being part of her coursework to achieve a Bachelor’s degree in Health Care Management from Globe University. Ms. Moszer is also an Accredited ACH Professional having earned her certification through NACHA in 2007.

Correspondence concerning this article should be addressed to Marla Moszer, 207 Stearns Avenue, Paynesville, MN 56362.

Contact: mikkiart@gmail.com