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A previous post detailed the latest trends in healthcare payments impacting how providers do business and best practices for providers to meet those challenges.  However, the latest trends in healthcare payments present unique challenges for payers, which they must adequately prepare for – or risk consumer dissatisfaction and lost revenue.

Data from the 2013 Trends in Healthcare Payments Annual Report demonstrates that healthcare payments industry is evolving and outlines how payers can manage these changes. In particular, healthcare consumerism and provider adoption of ERA/EFT will be crucial areas to increase focus. Below are trends featured in the report and best practices for payers to prepare for the future.

Click here to download the report.

Opportunities for Consumerism

If given the option of various methods to pay their healthcare bills, 79 percent of consumers indicated that they would pay online through their health plan website.

As patient payment responsibility increases, patients are quickly becoming consumers who are sensitive to their healthcare costs. However, the healthcare industry does not successfully set payment expectations with patients or offer flexible payment options, which leaves providers struggling to collect and members dissatisfied. To resolve these issues and meet the needs of healthcare consumers, payers must work with providers to help consumers take control of their healthcare payments – or risk further consumer dissatisfaction and lost revenue.

In 2013, 75 percent of payers indicated that they leveraged a web portal for member communications.

The rise of consumerism in the healthcare industry presents unique challenges for payers to improve the member experience. As consumers, members want to manage, pay and understand their healthcare bills in one convenient place. Yet, this expectation has gone widely unmet in healthcare. To address this gap, payers can work with providers to enable their members to simplify their healthcare finances by integrating payment functionality within their member portals. This will ultimately streamline a confusing process to increase member satisfaction.

Click here to read more on the Risks and Opportunities of Healthcare Consumerism for Payers.

Meeting the ERA/EFT Mandate

50 percent of payers indicated that they did not meet the requirements for the CAQH CORE Phase III Operating Rules for supporting ERA/EFT.

While ERA/EFT transactions on the InstaMed Network significantly increased in 2013, many payers are still implementing the technology to meet the ERA/EFT mandate under PPACA. Payers must ensure that they support ERA/EFT in a way that is compliant with the operating rules developed by CAQH CORE. The ERA/EFT mandate requires that payers include the EFT trace number with the remittance to allow easy re-association with the ERA. By accepting these transactions, providers can reconcile payments and remittances automatically, which reduces hours of manual administrative work and the risk of posting errors.

73 percent of all payer payments processed on the InstaMed Network are ERA/EFT payments.

When evaluating how to achieve ERA/EFT, one of the first decisions a payer will make is to “build or buy” – whether to use internal resources to build ERA/EFT capability or to buy from a third-party vendor. Irrespective of which model a payer follows to achieve compliance with PPACA, there are several key considerations that should be included in the project scope from the beginning:

  • Provider Adoption
    Reach providers easily to enroll them in ERA/EFT quickly and minimize print and mail costs.
  • Financial Controls and Daily Monitoring
    Establish dedicated resources and processes to monitor all payment activity on a daily basis, support financial regulatory requirements, protect against fraud when enrolling providers, and support bank account changes and Know Your Customer (KYC) verifications in a timely manner.
  • Compliance Requirements
    To avoid penalties, identify resources to understand the reform mandate and verify that the payer is compliant.
  • Third-Party Relationships
    If payers choose to work with a vendor, they need to make sure they know who they are buying from and any downstream, third-party relationships that the vendor may require to deliver a complete solution. It is crucial for a payer to understand all of the relationships in scope, which will help to assess points of failure, risks and the continuity of service for dealing with difficult issues that arise in an electronic processing environment.

Click here to read more on the Key Considerations for Achieving ERA/EFT.

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