Other industries have relied on banking automation to improve the speed and efficiency of payment processes and reduce transaction costs. Can health care optimize electronic payment posting and remittance data exchanges for similar benefit? In this roundtable, healthcare providers and a banking representative explore the potential roles of banking in health care. They describe their experiences and expectations of ideal lockbox and other banking transactions, and weigh potential benefits and challenges associated with implementing the banking industry's technology solutions.
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Moderator: Lockboxes have been a tool in the healthcare industry for several years with limited acceptance, in this new age of consumerism, some hospitals are examining electronic remittance as a foundation for an electronic claims processing process for payer and consumer payments and for other process and posting improvements. What has been your experience in this area, and what do you see as primary benefits and challenges associated with using a lockbox for receiving payment?
Robert Hemker: We have explored the plusses and minuses of using a lockbox to shorten the posting cycle. Cost was a primary consideration when we decided not to get a lockbox.
On the plus side, though, a lockbox could help us better deploy the resources that are going into the reconciliation process and could improve the timeliness of posting. So we're keeping the lockbox option open, it's just not a clear hands-down solution.
Mary Lee DeCoster: We use a lockbox for consumer and insurance payments. More than half of our business comes from Arizona Medicaid plans, which cannot send us payments electronically. So the lockbox helps us save a day. As a safety net healthcare system, my organization counts cash very closely, and the lockbox makes a difference. But we want more services from our lockbox. We can't yet accept electronic payments from our self-paying patients, so we're still doing a lot of manual posting. We have seven cash posters in addition to the lockbox. To me, there's something wrong with that picture.
Belle Butler: We also use a lockbox. The primary benefit of the lockbox is in managing high volume. We have approximately 2,500 patient payments per month that come in through the lockbox. Payments from some of our smaller payers also come in through the lockbox; they're not all electronic. The lockbox does give us a bit more control on the cash side. And it's preferable to having our accounting department handle the checks. Ideally, all of our payments would come in electronically and we wouldn't have to do any manual posting.
Michael Bernick: We don't use a lockbox; we probably don't have quite enough volume for it to make a real difference for us.
Fred Pigeon: We don't use a lockbox, either. We looked into it and concluded that the expenses associated with the lockbox were not warranted. We did want to find a way to regain the day we lost while the armored truck was delivering checks to the bank, however, so we bought a desktop deposit system and recaptured that day.
Brian Kay: We've looked into the feasibility of getting a lockbox, but concluded that our cashier's office is a better solution. They handle mail-in payments as well as payments from walk-ins. So there really isn't any additional cost for processing the mail-in payments, since we want to keep an open cashier's window, whereas there would be cost associated with a lockbox.
Janey Ladd: Our self-pay patient base is so small that a lockbox is not cost-effective.
Scott Nelson: We use a lockbox for patient payments. Most payers send us an electronic remittance advice and the money goes directly to the bank. But we don't have that capability for patient payments, so that's where our lockbox comes in.
Overall, we don't have any trouble with the lockbox for patient payments. Occasionally payers will make changes or upgrades that will take a while to straighten out, but that's a minor inconvenience.
Moderator: Has anyone tried to automate the reconciliation process, so that payments and remittances are matched before payments are posted?
Robert Hemker: You can't take advantage of electronic reconciliation technology unless you have electronic posting on the bank side as well as the lockbox side.
Mary Lee DeCoster: We have occasional discrepancies between the lockbox and the deposit. Being a veteran patient accounts professional, I regard the lockbox report with a fair degree of skepticism--we double-check it.
Fred Pigeon: That's right. For electronic remittance posting, we verify that the remittance matches the electronic fund deposit before it's posted. And we have a spreadsheet where we document what we posted. Then we have someone else look at what was posted, and then we have the accountants check that. So we build in manual checkpoints throughout the process.
Moderator: What would it mean to your organization to have automated posting and reconciliation processes?
Catherine Warren: I think it's important to define what we mean by automated posting and reconciliation. Until very recently, traditional lockbox services have not added significant value for hospitals. The manual posting and intervention issues that people here are describing have limited the value the lockbox can deliver. But newer medical lockbox technology can offer hospitals benefits that go beyond fast deposit services. These benefits include imaging the paper, capturing the data on the EOBs [explanation of benefits] and re-associating the EOBs with the deposit so that you're getting the data when the dollars come in. In some cases, you could actually get the data converted to an 835 [the HIPAA healthcare claim payment/advice transaction set] or a file that can be delivered to your patient accounting or other receivables system. You may even be able to reconcile the data with your open claims file. In health care, we're starting to be able to do invoice matching, as other industries do. So that's what a fully automated process would look like: the payment comes into the lockbox, the check is matched with the data, which could be paper if you're not getting ERAs [electronic remittance advices], and all of that is converted into an ERA from the bank to you.
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