PatientPay's Health Care Paper Fix: Automate Payments and Insurance

By David Heun
August 31, 2016

Health care stands to benefit from automated and easier-to-understand billing and payments, but PatientPay is betting that ridding the system of paper is required on the benefits end as well.

PatientPay's online and mobile platform, called PatientPay Paperless, matches the explanation of benefits with the bill to provide visibility into what the patient owes and what the insurance company will cover.

"Digitizing the process in the manner PatientPay is approaching it is tackling the two toughest issues, the first being the convenience of the online channel," said Michael Trilli, senior health care analyst for Aite Group.

All providers using PatientPay or a similar service will likely see bills paid faster because it is a payment process that caters to the patients' lifestlyes, Trilli said.

"What will drive this over the edge and be coveted by patients is it will build trust through simplification," Trilli added. "Aligning the explanation of benefits with the statement sounds easy, but it has not been done before because it is hard."

Durham, N.C.-based PatientPay, currently serving 40,000 providers, says 75% of patients receiving an electronic bill through its services will pay that bill immediately, cutting back significantly on the current average of three bills and reminders being mailed to patients and providers waiting 120 days for payment.

Any company that finds a way to present the medical bill statement in a way that consumers can understand will be solving "a huge problem" that strips away the industry verbiage and creates a statement of debits and credits that resonates with consumers, Trilli said.

PatientPay began tackling this problem five years ago, which may have been a little too early to catch the attention of the health care industry, company CEO Tom Furr said.

But the company was convinced that it was onto something, considering most industries were advancing electronic billing through computers, laptops, tablets and smartphones, but the healthcare industry was still sending 90% of its bills in paper form through the U.S. postal service.

"Clinically, health care is the most innovative industry in the world, but operationally in business it is one of the most antiquated," Furr said.

In the past, many payments came electronically to providers from insurance companies, but because of the Affordable Care Act and high-deductible insurance plans, more patients are making payments. However, the health care industry has not fully converted those patient payments to an electronic system.

"It's coming, but it is slow and frustrating," Furr said of the elimination of paper bills. "Basic stuff just doesn't resonate sometimes, but people want to pay this way," Furr added, noting that 20% of payments through PatientPay already are coming via a browser-based mobile app.

Hospitals or ambulatory groups using PatientPay, which is integrated into their current billing systems, send bills to patients through e-mail, aggregating all of the patient bills in one file for easier payment. Patients choose the payment method they will use through PatientPay, whether it is an HSA card, debit card or credit card.

"The payment plans are built into the system and customized for the group we are working with," Furr said. "It allows a patient to pay over several months with an HSA card or they can pay part with an HSA card and part with another account."

By building a PCI-compliant system for patient payments within the health care architecture designed for accepting insurance company payments, PatientPay feels it is on the right track for the industry's future payment methods.

In its health care trends report for 2015, InstaMed found 72% of consumers prefer electronic payment methods such as payment cards, ACH or digital wallets to cover health care costs. InstaMed also operates as an electronic health care payments network.

The various mobile wallets such as Apple, Samsung or Android Pay are becoming part of the health care equation.

Apple Pay has been making some inroads with various providers and plans by offering security in mobile payments and parlaying its strong interest in health care through its health app and its various monitoring features. 

PatientPay has been prepared for other options in health care payments by also providing clients with point of sale terminals and card readers for mag-stripe or EMV chip transactions in addition to its e-billing and payment services.

"We might have gotten in a little early, but figured if we can survive the early days and come out on the other end, we learn a whole lot in the process," Furr said. "We have a lot of work to do because health care is slow to move, but it is evolving because they have to now."

As for the goal of ridding the industry of unneeded paper, health care in general has advanced that cause past the early-adopter phase and "into the early majority phase," said Aite's Trilli.

"It does take a while to notice a reduction in paper," Trilli said. "I would characterize the rate of change in health care as normal with an industry conversion from paper bill presentment to digital because it simply takes time."

The technology is not a novelty anymore and companies like PatientPay or Health Payment Systems, which is another one-statement, one-payment provider, are seeing increased adoption, Trilli added.

"But it is not as simple as just dropping it into place," he said. "It's a business strategy required to understand which patient populations to try first, expanding to others later and fitting it into an overall collections strategy."