For hospitals in the modern digital era, revenue cycle management presents a huge set of challenges. The nature of the healthcare industry gives rise to many difficulties for providers in terms of billing, receiving payment, and accounting. And the unique issues surrounding the COVID-19 pandemic have made these challenges even greater.
Fortunately, there are technological solutions to these problems. For those hospitals who know the third-party providers to partner with, they can smoothly navigate the troubled waters of payment processing.
Common Payment Challenges Facing Hospitals
Seeking recovery from insurance providers for healthcare claims is obviously critical for hospitals. But just as critical is dealing with the complex logistics of billing for claims and accounting for payment. This is especially true when the vast majority of this activity is handled electronically. Below are some of the more common payment challenges.
Billing for Both Hospital and Professional Fees
Many hospitals have handled their billing for hospital and professional fees by combining those functions into one department – the central billing office (CBO). The CBO serves as a one-stop hub where patients and payers alike can contact the hospital regarding all their fees.
While there are many advantages to centralized billing, CBOs face the difficulties of dealing with multiple billing systems. CBOs often need different computer output files that are specific to those systems. And if the CBO utilizes an outsourced billing agency, they may need different output files for that agency as well.
Difficulties in Splitting 835 Remittance Files
Hospitals also face many challenges with processing electronic remittance advice (ERAs), also known as 835s – the electronic transactions that provide claims payment information. A single 835 often includes payment information for several claims, resulting in a large file that is difficult to process.
CBOs often address this challenge by splitting the 835 remittance files, then grouping them into more useful categories – such as by payer, payment system, etc. However, the 835 splitting process poses a technological challenge all by itself.
Matching Remittances with Claims and Payments
When a hospital submits a claim to an insurer, it typically takes weeks or months for the remittance payment to be made. Then the actual payment, whether made by check or via an electronic funds transaction (EFT) to the hospital’s account, often arrives at a different time than the ERA. The overall result is payments arriving at different and unpredictable times within the revenue cycle, along with the administrative hurdle of matching claims to payments.
Dealing with Non-Electronic Paperwork
Much of the payment process still remains in the realm of non-electronic paperwork. This includes correspondence, explanations of benefits (EOBs), and patient payments by check. How can a hospital effectively handle old-school paperwork with a system that is primarily electronic?
Potential Solutions to Hospital Payment Issues
Modern technology that deals with patient payment reconciliation can tackle these challenges, in a number of ways:
- Reconciliation of Bank Deposits: Software that can automatically reconcile bank deposits with remittances can deal with the “administrative matching” problem. And the software should be able to deal with both NACHA files (for batches of ACH payments) and BAI2 files (for other transactions).
- Matching Payments to Patient Statements: Matching payments to patient statements is also critical. Hospital software that integrates with the hospital’s statement provider in a HIPAA-compliant fashion is best.
- Automated Delivery of Remittance Posting Files: When remittances are posted, the posting files should be scheduled for automatic delivery on a daily basis.
- Converting Paper Documents to Remittance Files: Hospitals typically maintain “lockbox” accounts at their banks, which act as collection accounts for check payments. The bank then creates an electronic “lockbox file” for transmission to the hospital, which contains the remittance information. The hospital’s software should be able to convert lockbox files to 835 posting files.
PayX is a patient payment reconciliation solution that performs all of the functions above. Powered by the CareView payment platform, in partnership with Big Data Healthcare, Inc., PayX works with a hospital’s existing statement provider to streamline payment processing.
While electronic payment processing poses many challenges for hospitals, there is simply no turning back to a paper-based system. Fortunately, a technological solution like PayX can overcome these hurdles and help hospitals maximize revenue. To see how BillingTree, the company behind the CareView platform, can enhance your payment processing, request a demo today. And contact Big Data Healthcare, Inc. to explore their unique set of business automation solutions.