Healthcare providers face uniquely complex payment flows. Firms in other sectors often provide goods and services to clients, then submit invoices and receive payments, but health clinics and hospitals go through less-straightforward approaches to obtaining compensation. These organizations must file claims with insurance carriers after completing treatments, then wait to learn what portion of those services insurance companies will cover and wait to receive funds. Healthcare providers can then either dispute insurance firms’ decisions and seek additional funds or ask patients to pay remaining amounts.
The latter approach can be difficult, however, as patients are likely to be caught off guard by medical bills that arrive long after they have been treated. Some may no longer even be able to pay these medical bills, with many consumers suffering income and job loss
es during the pandemic.
These pressures make it important for healthcare providers to collect payment from their insurance providers as quickly as possible, but sending claims documents in the mail and waiting to receive back paper checks can be slow-moving and cumbersome. The December Digitizing B2B Payments Tracker® examines how modernizing accounts payable (AP), accounts receivable (AR) and claims processes could ease some of these frictions.
Around The B2B Payments Landscape
Healthcare providers frequently wait 30 days or longer to receive compensation for their services, and uncertainty regarding the amount that insurance carriers will cover can make it difficult for hospitals and health clinics to accurately predict their cash flows, states Matt Hawkins, CEO of healthcare payment solutions provider Waystar. Hawkins argues that such strains will prompt the sector to adopt faster, more transparent payments processes, including technologies that enable real-time B2B insurance payouts.
Insurance plan providers looking to modernize may wish to use virtual card payments, John Innes, CEO of payments processing services provider ACH Processing Company, said in a recent PYMNTS interview. He said that these tools can offer faster transactions and more visibility over the payments’ statuses than is possible with other methods like ACH or paper check-based payments. They also provide an extra layer of security over payment methods like checks, as insurance firms and claims processors can transmit single-use payment details providers rather than relying on sensitive bank account information.
Businesses that have embraced digital upgrades appear to be reaping benefits from doing so, according to a recent PYMNTS survey of firms in healthcare and other sectors. Respondents that had automated AR processes said they were now being paid faster and more easily. Businesses with such upgrades in place spent 67 percent less time tracking down overdue payments than those still using manual processes, the report found.
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Why Dental Practices May Be Getting A Taste for B2B Digitization
Dental practitioners must often confront slow-moving processes before getting paid, including submitting claims to insurance carriers, mailing lab images and other supplementary documents to back up their claims and then waiting to receive compensation. Using paper-based methods for these activities can make them take even longer, especially during the pandemic, said Arthur Schoen, vice president of insurance operations and revenue cycle management at dental-focused business support services provider Aspen Dental Management. In the Feature Story, Schoen explained how digitizing payments and updating AR systems can help the dental sector accelerate and smooth its B2B transactions.
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A Digital Cur
e For Healthcare’s AR, AP Ailments
Healthcare providers spend too much time on cumbersome processes for submitting claims and following up on payments’ statuses. Research suggests that physicians and their insurance partners could save time and money by transitioning some of these operations to digital methods, however. The Deep Dive digs into the key AR and AP frictions the medical sector faces and how modernizations can help firms overcome these obstacles.
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About The Tracker
The PYMNTS Digitizing B2B Payments Tracker®, a partnership with Deluxe, examines how digitizing AP and AR could simplify health claims payouts from insurance carriers to physicians.
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