Solutions for making the Switch from Paper to Electronic Payments
At first glance it’s hard to imagine a provider wouldn’t clamor to receive payments through Electronic Funds Transfer (EFT.) The phrase itself connotes a seamless transfer of monies owed for services rendered. Providers receiving prompt, direct payment—that’s a great thing.
Adoption of EFT benefits not just providers; it benefits payers, patients and the public at large. Cutting the paper and going electronic is a win-win, win-win.
First and foremost, EFT provides significant cost savings. Across the board, all participants in the revenue cycle see notable savings/increased profitability long term with EFT. Savings are achieved through the elimination of costs for supplies and labor for printing, mailing, sorting and hand processing (keying, sending, filing, etc). EFT saves money lost through errors common to traditional funds transfer. When money is transferred electronically, checks don’t get lost in the mail, manual entry mistakes are avoided, and cash flows more smoothly. These savings are seen during payables and receivables—and at every point in the revenue cycle in between.
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Billions of Dollars Could be Saved
The healthcare industry would realize nearly $30,000,000,000 in savings if total electronic conversion were to fully occur. Approximately $11,000,000,000 would be saved if just EFT were adopted industry wide. This data comes from the US Healthcare Efficiency Index™, a forum for monitoring the industry’s progress from a paper-based system to an electronic one. Who would benefit from the healthcare system saving billions of dollars by running more efficiently? Everyone.
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Naturally, EFT is also a major time saver, and we all know time is a valuable currency in our fast-paced industry. When staff members don’t have to deal with the aforementioned printing, mailing, sorting, hand processing or manual keying, they work more efficiently and productively on tasks that are of greater, more lasting value. There’s no lag time waiting on mail delivery, check clearances, funds to be released or payments to post. Work flow and cash flow are improved.
It’s also worth noting that EFT is not only a leaner process, it’s a greener one as well. Cutting paper out of the process will measurably reduce the environmental impact of paying and receiving funds. Trimming waste ultimately results in less rubbish in landfills, as well as less precious square footage swallowed in storing documentation and copies.
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A Leaner System. A Greener World.
Going electronic saves trees by reducing the amount of paper needed. to run the system. The US Healthcare Efficiency Index™ estimates that we would eliminate the need for 4,969,875,000 sheets of paper annually by adopting an electronic system.
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With all these long term benefits in addition to the immediate potential for seamless payment, it’s a wonder total adoption of EFT has yet to occur. However for many providers, “seamless” isn’t always what it, well, seems. There are some key issues that must be addressed in order to make EFT the optimal choice for all providers.
The most common barrier is the expense involved in acquiring the needed technology just to get started. Even if a provider desires the long term savings of electronic payment, they may find the initial investment cost prohibitive. From large groups to small clinics, all providers have to invest in technology, even though their resources may be disparate. Though more and more affordable solutions for payment review, reconciliation and posting are appearing in the marketplace, the perception that technology is expensive is deeply rooted and challenging to overcome.
Another issue is lack of consistent, standardized data between payers and providers or allowed variances even when standardized code sets exist. With so many players in the game, it’s challenging to get everyone speaking the same coding language or requiring the same data during remittance. In addition, payments are often not processed electronically because providers did not initiate the claim electronically; every step of the process must tactically lead to the next.
Thankfully, the healthcare industry as a whole, motivated by the potential savings benefits reaching well into the billions, is addressing these issues with responsive solutions.
Most notably, standardization is proving to be immensely helpful. There’s a growing trend in payers standardizing electronic payments to their providers. As payers standardize the process, more providers will be able to make the transition, and everyone will benefit from economies of scale that come into play to help defray costs.
Additionally, HIPAA has mandated code sets to help standardize the process, though variances still exist in an industry as vast and complex as this. Certainly vendors—clearinghouses in the business of electronic data transmission—have been at the forefront of this transition and have developed technology to aid in the translation of data. Innovations and standardization will ultimately work together to navigate the process.
All said and done, it’s time to get on board and join the forward motion. While some industry professionals are somewhat set in their ways, preferring to keep the paper they’ve known and trusted rather than convert, the fact is the industry’s arrived at a ‘lead, follow or get out of the way’ juncture. As a matter of fact, the state of Minnesota is now the first to require all healthcare payers and providers to submit claims, eligibility and payments electronically. Other states may likely follow suit.
In the interim, we can all be assured by the ongoing transitions of colleagues in the industry. Some providers have already made great headway, and thankfully we can learn from each other.
Want more details about the efficiency of the healthcare system? Visit www.ushealthcareindex.com. Ready to cut the paper in your practice? Contact us today to talk about solutions.
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