Healthcare Payment & Remittance
Medical Banking - Best Practices
Art Conklin, Director of FirstProxy and
Electronic Payment Services
Electronic Healthcare Payment Session Objectives
• Overview of medical banking models in the
healthcare payment and remittance marketplace
• Exploring best practices with an eye on:
–
–
–
–
ROI
Inter-operability
Auditing
Reconciliation
• Context – emerging marketplace
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The Electronic Healthcare Payment
Critical Success Factors
Connectivity is the key
• Transaction flow controls
• Operational efficiencies,
savings and profitable
revenues.
• Reconcile billed to paid.
• Reconcile financial to
administrative, the ERA to
the EFT.
• Efficient Customer Support
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The Electronic Healthcare Payment
Managing the Critical Control Points
Fitting the pieces together
• Transaction standards
• Systematic reconciliation
• On-line ERA management
•
•
•
•
4
tools
Consistent operational
practices, such as
enrollment
Linking ERA and EFT
Meaningful adjudication
codes
Purging the paper and
handling
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Healthcare Electronic Payment Models
• Standard healthcare claim and payment
– Provider to Plan to Provider
• Combining the administrative (ERA) and financial
payment transactions (EFT)
– Outsourcing payment components
• Consumer driven plans and healthcare funds
– Greater member responsibility for selecting services &
allocating payment.
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Standard Electronic Healthcare Payment Cycle
Provider
Healtcare service
to patient
Payment
ERA/EFT Reconciliation
Claims Submission
Clearinghouse
Claim
Payment
Life
Cycle
Clearinghouse
Payment
Remittance Advice
EFT/Check
Payer
Adjudication
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ACH
The Standard Electronic Healthcare Payment Model
• Clearinghouses process 835 from Payer to
Provider’s
• Payer’s bank processes EFT to Provider’s bank
• Support Vendor Intermediaries
• On-line management & support tools.
• Building partnerships to provide quality, value add
products & services.
• Priced to produce savings and profitable
revenues.
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Combining Administration and Financial Transactions
FirstProxy
USPS
Print
and mail
ERA
Provider Database
EFT
Reconciled
ERA
Payer
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Electronic
payment
Healthcare
Provider
Combining the Electronic Healthcare Payment’s Administration
and Financial Transactions
FirstProxy
• EFT capability through ERA.
• ERA-EFT reconciliation.
• Single management tool for both payment
transactions.
• Consistent operational workflow
• Efficiencies multiplied
• Fully outsourced payment functions
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Combining the Electronic Healthcare Payment’s Administration
and Financial Transactions - Challenges
FirstProxy
• Realignment of traditional partnerships in
managing healthcare payments.
• Slower than expected market acceptance to
outsourcing payment function.
• Final completion of Phase 1 of HIPAA
Transactions
• Recognition of value equation
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Electronic Payments in Consumer Driven Health Plans and Funds
Card swipe
Provider
Healthcare service
to patient
Payment
Eligibility / benefit
verification
Clearinghouse
ACH
Authorization / funds transfer
Fund / plan eligibility – fund withdrawal
Fund
Payment
Life
Cycle
Clearinghouse
ACH
Payment
Remittance Advice
EFT/Check
Fund / Plan
Administrator
ERA = Electronic Remittance Advice
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Electronic Payments in Consumer Driven Health Plans and Funds
• Multi purpose benefit card is emerging to handle
member payment responsibilities in consumer
driven health plans and funds.
– Credit / Debit of accounts
– Administrative transactions, e.g. eligibility / benefit
verification.
• Fits into provider workflow.
• Newer technology for POS devices permits for
larger data requirements.
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Electronic Payments in Consumer Driven Health Plans and Funds
Value Add Opportunities
• Credit funds beyond debit accounts.
• Claim submission as component.
• Integrated eligibility and benefit verification to
determine who is responsible for what of the
treatment costs.
• Advance payment for plan’s payment
responsibility.
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Electronic Healthcare Payment Summary
• Electronic payment with value-added services (i.e.
Web management tool).
• ERA/EFT combination via strategic partnership.
• Multi-purpose benefit card support.
• Value add products & services where
opportunities exist.
• Priced according to value.
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Appendices
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Traditional Electronic Payment Workflow
ERA/EFT Process
Payer Gateway
data translator
(ANSI 835), ANSI
edits connectivity
Payer claims
receipt
Claims
adjudication
ERA
preparation
Payer Gateway
data translator
(ANSI 835), ANSI
edits connectivity
Payer banking
interface
Clearinghouse
batching,
consolidation
and/or splitting
logic
Payer Gateway
data translator
(ANSI 835), ANSI
edits connectivity
Accounts
Payable
Funds transfer
Reconciliation
Banking institution
EFT transaction
creation and routing
Provider bank
Online
EPP
Network
Manual posting
PMS posting
software
Provider claims
submission
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Provider
Accounts
Receivable
Provider’s
proprietary
software posting
ERA
preparation
Clearinghouse
batching,
consolidation
and/or splitting
logic
Payer Gateway
data translator
(ANSI 835), ANSI
edits connectivity
Healthcare Account Debit Flow
POS Technology
Payer Gateway data
translator
(eligibility/benefit
verification –
ANSI 270/271)
edits connectivity
Eligibility /
benefit plan
Payer Gateway
data translator
(ANSI 835), ANSI
edits connectivity
Enrollment /
plan and fund
set-up
Payer banking
interface
Funds transfer
Payer Gateway data
translator
(eligibility/benefit
verification –
ANSI 270/271)
edits connectivity
Financial debt
Banking institution
EFT transaction
creation and routing
Provider bank
Funds
transfer
Plan Sponsor
Fund
Provider office POS
(card swipe) device
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Plan Sponsor
Gateway –
data translator
(ANSI 834), ANSI
edits connectivity
Plan Sponsor
Gateway –
data translator
(ANSI 834), ANSI
edits connectivity
ERA = Electronic Remittance Advice
Summary
• ProxyMed is the nation’s ONLY full suite of healthcare
business solutions, offering beginning-to-end solutions.
• Transform the remittance advice and payment process from
paper-based to electronic, resulting in:
– Automated healthcare claims payment and settlement processes
– Improved efficiency
– Reduced costs
• Verify eligibility and benefit information prior to
administering healthcare services, resulting in:
– Improved administrative overhead
– Better cash management
– Expedited payment
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ProxyMed Can Help You Achieve Success By…
• Enabling you to focus on core competencies
• Maximizing profits through increased efficiencies
• Expediting payment process
• Increasing productivity by reallocating resources
• Functioning as your single source for all administrative
transactions
• Enabling you to focus on core competencies
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www.proxymed.com