Few debate the fact that the U.S. healthcare system badly needs reform. Or perhaps reinvention is a better word. For all of its 21st-century brilliance, the American healthcare system of billing and payments, for example, is still extensively mired in 20th-century business processes.
That’s less than ideal almost by definition – and, in the time of COVID-19, it’s quite a lot less. Getting money to patients and practitioners instantly has now taken on an urgency that commerce alone couldn’t seem to generate. Better late than never.
“The COVID-19 pandemic is taking its toll across the healthcare sector, and from a payments standpoint, the legacy mechanisms in place today to pay out the increased number of claims disbursements — check and ACH — are far from ideal,” Drew Edwards, CEO at Ingo Money, told PYMNTS. “Checks are costly to health insurers and can take weeks to arrive to the intended recipient. ACH, while faster, may still not be fast enough.”
Noting that lower-income populations are disproportionately affected, Edwards said, “[The opportunity] lies in an instant payments solution. A 75 percent share of disbursements recipients in a recent PYMNTS study said they wanted to receive instant payments because they gain instant access to funds. Businesses and banks across industries, including [auto and property insurance], are beginning to make the shift. These companies [are] paving the way, and healthcare is the next insurance type primed for innovation.”
PYMNTS’ June 2020 Disbursements Tracker®, done in collaboration with Ingo Money, goes deep into the healthcare conundrum, observing that “the virus’ impact has reverberated well beyond overwhelmed hospitals and overworked caregivers, and is now throwing everything from everyday medical inquiries to billings and disbursements processes into question.”
A Healthy Platform Ecosystem
The Electronic Health Records (EHR) initiative is an early (critics might say “obsolete on launch”) attempt at digital transformation, freeing healthcare data from its paper prison. That’s still the dream, with FinTechs, banks and Big Tech firms all trying to provide “the” solution.
Meanwhile, venture capital (VC) investment dollars are flowing toward payments platforms that can quickly digitize healthcare disbursements in COVID’s terrible wake, speeding funds where they’re needed.
“Physician and customer frustrations with healthcare payment processes are not new, but the pandemic appears to have highlighted the systems' weak points,” the Tracker states. “Lagging server speeds, billing complexities and paper checks’ time-consuming paths are pain points that the pandemic has exacerbated for both insurers and healthcare providers.”
That’s where platforms sidestep old medical office filing systems with API grace.
“By leveraging an instant payments platform that delivers choice, consumers can select where they want their healthcare claim payments sent – immediately to bank accounts they own, to prepaid cards or even mobile wallet accounts,” Ingo’s Edwards told PYMNTS. “There are challenges to execution, [as] healthcare payments involve multiple parties, consideration of [Health Insurance Portability and Accountability Act] privacy rules and document sharing for an explanation of benefits. ... The evolution is upon us as industries move toward a fully digital experience that can provide customers with the best possible experience.”
ACH Ain’t What It Used to Be
Digital ACH was the fastest way known to healthcare providers and insurers, but ACH isn’t as alluring in the presence of real-time payments and platforms that facilitate transactions.
“Providers are now creating systems that can electronically store these details alongside other medical information, but they must be sure they are implementing authentication tools that can keep up with instant payment methods,” according to the new Disbursements Tracker®.
“Many are still adjusting to ACH disbursements that run on legacy systems tailored for check claim payments or employees manually verifying details on paper documents,” the report said. “These providers may have to completely overhaul their operations in the near future – especially as interest in telehealth solutions leads to more data stored and shared on payment networks.”