Practice Management software and the Merchant Service Account problem

The more than 300 Practice Management Software vendors in the United States help practices – that range in size from individual doctors to multi-office groups made up of thousands of healthcare professionals – manage their most important operations, both clinically and financially.  

Attuned to the government’s drive to capture critical data and make it available online along with providing greater cost transparency, these vendors are offering payment portals, tangential to their core software. These electronic mail slots are intended to let patients see their statements online and then pay their bills through this technology using their debit or credit cards.  

Unfortunately, with every payment portal that comes online, every practice is required to establish a merchant service account. In simplest terms, a merchant service account is a specialized account provided by a bank or other financial institution to enable online transactions. This account, which enables credit card transactions, is an agreement between the practice and the bank that contractually binds the practice to obey the regulations established by the bank.

To secure the agreement, a practice needs to complete an MSA application form which, amazingly, typically numbers 18 pages or more. Imagine the office manager of a medical practice taking time out of his or her day to handle that! The list of questions that must be answered run the gamut from the practice’s address to its checking account number, the principal’s SSN, Employer ID Number and much more (and those are the easy ones). Let’s not forget the need to get a voided check on the account to be used, a copy of the driver’s license of application signatory, a detailed list of services offered, credit card processing statements of the previous three months, a copy of the articles of incorporation, as well as business tax returns and business financial statements. All in all it’s almost as much paperwork as that which you waded through when you closed on a house…and you remember how much work that was.

In the end, the unfortunate reality is a Practice Management software vendor often sees a deal unravel because of the problems associated with getting a merchant service account in place. But it doesn’t have to be that way.  There must be a better solution.

My issue isn’t with the role of a merchant service account or with the very real need to provide patients with a safe, secure and simple way to pay for healthcare services online. My problem is with the process of setting up a merchant service account or, for that matter, going through nearly the same time-consuming process should changes occur.

A solution that can work for all involved resides within the Practice Management software itself. A practice needs a universal merchant services account like PayPal or Square for all its practices that automatically receives, posts and reconciles payments back into the Practice Management system. This eliminates the merchant services account set-up problem and makes the Practice Management software all the more useful to the practices using it. The best part is such an approach could cut down on the amount of paper and time used to bill patients, reconcile patient balances and more.  

For the sake of the practices using their software and their potential clients, Practice Management software vendors should find and fit the sort of solution I’ve sketched out above into their systems.  Their practices and their patients will thank them for it.