Unfortunately, refund processes tend to be manual, complex and time-consuming for both providers and patients alike, with traditional paper-based methods no longer matching the needs of consumers.
As the number of patients paying out of pocket for healthcare services grows, refunds are taking on even greater importance. Patients often have multiple provider encounters that involve self-pay. Ensuring those dollars are posted accurately and appropriately is important in the provider's relationship with the patient and in the patient's overall journey and experience.
While many providers attempt to collect balances due upfront to relieve the difficulty and stress of collections post-service, the estimates that are available ahead of service or at the time of service aren't always accurate based on which provider is paid first in the line of claim submissions.
Sue Martin, senior vice president of healthcare specialty services for CommerceHealthcare®, spoke about the burdensome nature of patient refunds.
"People must advocate for themselves," Martin said. "That means keeping up with appropriate insurance payments, as well as tracking where their self-pay dollars are being applied and where they may be entitled to refunds."
The traditional paper-based refund process has significant drawbacks. For providers, paper-based processes are inefficient, take more time and require additional labor. These antiquated processes are even more problematic as providers struggle with labor shortages and narrow margins in today's worsening economic climate.
Paper-based processes also are not ideal for patients, especially in an environment where so many consumers engage in online banking due to the convenience. It can be time-consuming to receive refund checks via the mail, and the traditional bank deposit process takes extra time. In addition, paper checks are prone to getting lost.
"We hear about these challenges on a regular basis from clients," Martin said, however, she offers a silver lining through modern technology. It's now possible to offer greater transparency about refunds to providers, payers and patients. CommerceHealthcare® offers its PreferPay® solution, for example, which is a secure, end-to-end automated refund process that integrates with provider solutions.
PreferPay® supports a variety of payment options including direct debit cards, direct deposit to a bank account and traditional paper checks. Offering multiple refund options is a huge step forward that improves providers' patient satisfaction scores.
"Consumers are looking for the same experience in healthcare as they have with their banking and shopping partners," Martin said. "Today, patients often have to wait for a paper refund check to arrive in the mail from their providers. With PreferPay®, they can get the funds owed to them in as little as 30 minutes."
Manual, paper-based systems commonly require multiple solutions and multiple departments to complete the entire patient refund process. Another major concern is the effort associated with escheatment of unclaimed funds.
Transitioning away from paper processes makes sense, but it's important to work with a trusted partner. "You want all the departments involved in the refund process to experience seamless workflows," Martin said. "CommerceHealthcare® works with providers to implement best practices and ultimately migrate to fully digital patient refund functionality."
A current-state review is a good first step on the transition to electronic patient refunds. Martin recommends tracking the costs surrounding check stock, printing and postage, as well as team member time spent processing the checks and following up, which should shed light on potential for return on investment.
Another best practice is to look for a partner and a solution that will work easily with the organization's treasury and receivables teams. Refunds routinely require processing from both accounts receivable and accounts payable for authorization and issuance of payments. These departments also need a workflow for tracking unclaimed payments.
In addition to processing patient refunds, PreferPay® can also streamline process flows that are critical to a strong employee value proposition.
"We've instituted workflows learned from other industries to drive better employee recruitment, retention and overall employee satisfaction," Martin said.
Automated payments also can be useful in areas like clinical trials and contract workers. "Take the automation and think bigger with it," Martin said. "You'll find it to be a true success."
"Implementing technology and automating refund processes that align with consumer preferences is absolutely a win-win for healthcare providers," Martin said. "Find a financial partner that offers a full suite of end-user and consumer satisfaction choices. If you make patients and your employees happy, you will find good success in the marketplace."
Sue Martin, Senior Vice President of healthcare specialty services for CommerceHealthcare®
CommerceHealthcare® has released its fifth annual Healthcare Finance Trends for 2023 report.
The report includes an in-depth analysis of research combined with practice experience and identifies consideration for the industry given multiple intersecting challenges in the year ahead.
The report’s key insights range across regulatory, financial, technological and supply chain considerations.
The full article is accessible at CommerceHealthcare.com, but one trend that will continue to carry importance for healthcare leaders is the need for a digital transformation.
Digital transformation is fundamental to healthcare’s business and care delivery model changes. IBM’s website succinctly captures the goal, “Digital transformation means adopting digital-first customer, business-partner and employee experiences.” A leading forecaster believes 70% of healthcare organizations will rely on digital-first strategies by 2027.1
Transformation efforts need to accelerate. One study showed that “digital, technology and analytics strategies exist for nearly all organizations, yet only 30% have begun to execute on those plans.”2
One functional segment ramping up digital transformation is finance. According to a recent survey, 94% of CFOs and senior leaders stated that such efforts will be at the forefront of financial operations and strategy for 2023-2024, and 79% described it as an “absolute need” for “commercial stabilization and long-term survival of their healthcare organization.”3
Advanced technology is gaining traction. Many see optimization in combining robotic process automation (RPA), artificial intelligence and machine learning to create “intelligent automation.”4Together these technologies create algorithms to automate decisions that guide “robotic” software to perform financial actions and thereby reduce manual labor.
Getting to digital-first in finance and across the enterprise has several critical success factors. These include sustained commitment, a platform-centric mindset and effective governance.
Some assert that few healthcare executives have “created digital strategies that look far enough into the future.”5 Speed of change is also important. Health systems, hospitals, and practices exhibit varying risk appetites and change rates. When asked to self-identify “transformation personas,” a little over half regarded themselves as on the innovative “early mover” end of the spectrum, while the remainder will adapt as technologies prove themselves. Slower organizations will likely need to increase the pace.
Platforms, not point solutions
Implementing enterprise platforms rather than proliferating “point solutions” is obligatory. Organizations must be “prepared to compete in the platform economy as platform-based business models have changed the way we live, work and receive care.”6
There are still too many tools and applications. A survey of top decision-makers at health systems found that 60% use over 50 software solutions just in operations (24% have over 150).6System integration is one answer. Use of application programming interfaces (API) helps this effort substantially. API-first is fast becoming the norm among solution providers, with global API investment expected to nearly triple by 2030.7
Effective governance is vital to constructing a platform-based transformative model and to ensuring wide user adoption. Healthcare has seen the rise of new senior roles such as Chief Digital Officer and Chief Transformation Officer, positions focusing on initiatives like ownership of technology success at the department level and devising user incentives.