Paper Checks Continue to Persist in Healthcare Payment Reimbursements
- Paper currently dominates healthcare payments
- Some suggest that providers should adopt digital payments as much as possible
- However, there are clear advantages to healthcare payments by check
As many are aware, healthcare is a complex industry. From the delivery of care for patients to insurance paying the healthcare provider, there are dozens of systems that are being utilized by each party. The result is that, even though there have been innovations across the entire spectrum, paper persists at all levels.
This includes revenue cycle management -- where paper dominates for healthcare payments and explanation of benefits (EOBs). In fact, according to the Council for Affordable Quality Healthcare (CAQH), the healthcare industry is leaving $426 million on the table.
This also includes healthcare payments reimbursements, where providers and insurers still rely on paper checks mailed to patients.
Healthcare Payments Reimbursements and Paper Checks
Payments Dive recently posted an opinion piece by Seton Marshall, chief financial officer at Dash Solutions, where he makes known his position on paper checks for healthcare payment reimbursements.
The persistence of paper checks for patient refunds is not just an inconvenience — it's a symptom of a larger problem that threatens the very sustainability of healthcare organizations.
He goes on to make the case that continued use of paper checks in healthcare is a major issue that impacts the financial health and competitiveness of providers.
Digital disbursements offer immediate cost savings and operational efficiencies. In an age where patients have more choices than ever, providers who offer a seamless financial experience will have a significant competitive advantage.
Additionally, the mailing of checks presents another issue: mail theft related check fraud. Mr. Marshal notes that the mailing of checks is a "liability" with the recent surge in check fraud.
Switching to Digital -- Or Not?
Mr. Marshal notes that adopting digital payment methods can provide significant benefits for healthcare providers -- including cost savings and improved patient satisfaction -- which is crucial in the competitive healthcare market. Additionally, digital payment systems give healthcare providers valuable data that can help them make better business decisions and improve their financial performance.
However, Mr. Marshal is not entirely accurate. OrboGraph's experience with paper EOB to electronic EDI 835 files enables us to have a deeper understanding of healthcare payments. A majority of paper EOBs also include a check. Many healthcare providers utilize technologies to electronify these payments, enabling same-day deposits.
Furthermore, patients have become a healthcare payer, and choose to pay via the method that best suits their financial situation. Healthcare can be quite expensive, and many are more comfortable making larger payments with checks -- which is helpful to providers as credit card/debit card payments come with a 3-5% processing fee.
The healthcare industry will continue to be a complex industry and unavoidably fraught with paper. However, paper checks should not be "villainized"; rather, they should be recognized for what they are -- an accepted and even preferred payment for providers and insurers.