Digital Payments

As Medical Billing Goes Digital, New Benefits — And Challenges — Arise

Benefits, Challenges of Digital Medical Billing

As the benefits of bringing more digital power to medical billing become clearer, there are other issues and concerns rising that underscore just what a massive — and vital — task it will be to move one of the most important sectors of the payments world away from analog.

The general pitch to make medical billing more digital is this: As people live longer, which can drive up healthcare costs, digitalization can help bring down expenses and lead to better care via more access to data and coordination among various medical professionals, along with other features, according to analysts. As well, digital billing can help reduce healthcare fraud and errors in the $3.5 trillion-per-year healthcare space. One recent estimate said that incorrectly coded claims result in $6.7 billion in annual improper Medicare payments.

Paper Domination

Paper still dominates medical billing.

A survey from the Medical Group Management Association (MGMA) and Navicure found that 77 percent of group practices still do paper-based billing. That’s despite findings that have shown patients are more likely to pay their medical bills if offered online options for doing so, a trend that is stronger with younger patients. Patient satisfaction also increases the likelihood of full repayment of medical expenses.

Doctors’ and dentists’ offices, in fact, are experiencing bumps from digital processes applied to medical billing — especially as younger patients visit medical professionals more frequently. “Sending a paper statement to a millennial or leaving a voicemail is about as useless as a hamburger driving a vehicle,” Max Tselevich, CEO of The Doctor, a medical services management company, recently told a healthcare reporter.

Payments Boost

Sending bills and reminders of payments via emails and texts can result in a 40 percent boost in payments, Tselevich said.

The keys to such billing communication? One is including a phone number via which the patient can reach a live person to ask questions. It also helps to include a digital option to set up a payment plan, and to have clear language and medical practice branding so that patients do not get confused about what they are paying for or who they are paying — common hurdles for prompt repayment of medical bills, according to experts.

In short, medical billing can take lessons from eCommerce and digital financial services providers to reach consumers in ways to which they are accustomed. Even seemingly small steps can help.

“There’s a little sliding bar that you move with your finger to choose what amount of payment you can do today,” Tselevich said about one successful digital billing tool used by medical offices. “Then, it will automatically split it into either monthly or bimonthly payments until your payment is full. It does it automatically by deducting it from your credit card without giving out that credit card info, of course.”

Digital Challenges

That said, the move to digital can spark new challenges for medical offices.

One is the increasing prospect of fraud, of criminals breaking into healthcare IT systems in search of patient data, the scope of which can enable identity theft in ways that are relatively easier than in other sectors.

The last five years, in fact, have brought about a 125 percent increase in cyberattacks and hacking attacks targeted against the healthcare industry, according to one recent study. “Although employee negligence and lost or stolen devices still result in many data breaches, a shift is occurring from accidental loss to intentional targeting of data that reveals individuals’ names, Social Security numbers and other personal information,” the study indicated.

Another challenge is ensuring HIPAA compliance to protect the privacy of patients and avoid legal and reputational troubles. That’s why some cybersecurity and healthcare experts are calling for, or anticipating, more use of blockchain as medical billing and related healthcare tasks become more digital.

“By introducing blockchain technology into the picture, HIPAA compliance becomes simpler because of the added encryption and lack of accessibility to everyone but those who are responsible for uploading information and maintaining its security on the blockchain,” reads one recent, and common, analysis. “When a medical record is signed, it can then be written and/or uploaded to the blockchain, providing undisputed proof that the record cannot be altered. This same logic and application can also be applied to medical bills and clinical trials.”

Transparency Benefit

Making medical billing more digital could have at least an indirect impact on introducing more transparency for consumers into the healthcare process — which, in turn, could lead to greater patient involvement in their medical plans, another factor that experts say could reduce costs and bring more efficiency to the industry.

A recent Reuters report found wide variations in how much leading U.S. hospitals charge for giving patients access to their records — costs that can increase significantly if paper and copying is involved. Not all hospitals were even able to estimate a cost when researchers called, while one said the charge would be north of $500 (it was not clear how many pages were requested for that hospital).

Healthcare for the most part is an industry that embraces the latest technology and procedures. But like so many other industries, paper still plays a big role in payments and billing. More incentives and case studies encouraging a further move to digital keep emerging, though, even as they present their own challenges to be solved.

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