Fees Lurk in Health Plans' Shift to e-Payments

Christopher Cheney, July 7, 2014

Healthcare providers stand to benefit in several ways from the switch from paper-based payment to electronic payment, but not all e-payment models are created equal.

Healthcare payers portray the industry's historic shift to e-payments as a win-win proposition. But providers fear there may be a snake in the digital transfer Garden of Eden.

A 2012 Institute of Medicine report estimates annual waste in the healthcare system at about $750 billion, with paperwork and administrative bloating tallied at about $190 billion.

Aetna is among the health plan e-payment early adopters, moving at a fast pace to offer e-payment to all of the company's provider partners from hospitals to individual-practice doctors.

"Medicare began requiring electronic payment for all providers effective January 1, 2014. Many other health plans have instituted similar policies," says Jay Eisenstock, head of provider e-solutions at Aetna. "Given the groundswell throughout the industry, we expect the conversion will happen fairly rapidly."

Robert Tennant, senior policy adviser at the DC-based Medical Group Management Association, says e-payment is a welcomed innovation, particularly electronic fund transfers. "We've been asking for this—the provider community— for years," he said, noting the EFT payment model features "one-stop shopping for the provider."

EFT payments include a wealth of information to help providers match bills to individual patients, including tax identification numbers and a "trace" number for each patient billing transaction, Tennant said. "That's a huge leap forward for practices. It used to be manual."

Christopher Cheney

Christopher Cheney is the senior finance editor at HealthLeaders Media.

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