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Physician Practices Reap Benefits by Paying Bills Online


Numerous benefits are waiting for physician offices that make the switch to an electronic bill payment format, but, inevitably, with the promises come pitfalls.

Millions of consumers pay routine household bills online. According to the 2007 Consumer Bill Payment Survey, online bill payments exceeded payments made by paper check for the first time in 2006. And a survey conducted by CheckFree Analytic Research Services during the same time period found that 56 percent of U.S. households pay at least one bill online each month.

So, if it’s good for consumers, why not physician practices?

“Mainstream society has kind of paved the way for physician offices to [pay bills online],” says Mike Brennan, a practice management consultant with EthosPartners Healthcare Management Group. “Paying bills online has become well accepted in mainstream society, but physician offices have been a little bit slow to jump on board.”

Significant benefits

Online bill payment can benefit physician practices in a number of ways. It can reduce costly credit card fees; lower the number of manpower hours needed to write checks and reconcile bank statements; eliminate employee error associated with paying by check; and help control the risk of fraud.

Jorge Rey, information security manager with Kaufman, Rossin & Co., explains that paying bills online helps reduce expenses in two areas: hard costs, such as stamps and paper; and soft costs, including the time it takes office personnel to write a check and prepare it for mailing. “If you do everything online, you’re going to save on time,” Rey says. “And time is money.”

There are additional benefits of paying bills online. Physicians have access to their accounts 24 hours a day, seven days a week. There’s a convenience factor because bills can be paid at noon, or at midnight. Access to financial information is available on a real-time basis as opposed to waiting for a monthly statement in the mail. And, says Brennan, paying bills electronically provides a better audit trail than paper.

“A check or a credit card receipt can get lost quickly,” he explains. “But with an electronic document there’s an audit trail. You can’t remove it. So, I think there’s a better tracking system.”

A few caveatsRey cautions that paying bills online opens physician practices to phishing scams; emails that mirror what your bank might send, but they’re fake. They’re sent by fraud artists in an attempt to get people to put their user ID and password on a fake website. Armed with that information, they can easily access your accounts.

It’s also important to monitor your online activity. Software like Quicken can help physician practices develop reports to monitor cash flow and better adhere to budgets. Routine monitoring can also help deter fraud. Physicians place a great deal of trust in the member of their staff who is responsible for making online payments on their behalf. However, the higher the trust, the greater the risk.

“The bookkeeper could be sending checks to his or her personal bank account,” says Rey. “If the doctor doesn’t know what payments are being made, it increases the risk of fraud.”

Brennan agrees, and he points out that for too many physicians, the entire billing and revenue cycle occurs in a black box. “Billing gets done, there’s a certain amount that is contractually written off, and there are things that are denied, and physicians are typically not very astute in that. They rely heavily on staff for that, so, [paying bills online] can potentially increase this black box syndrome.”

First steps

For physicians considering making the switch to online bill paying, Brennan suggests two important first steps. He recommends you start by analyzing your existing workflow; understand current processes so that when you take a four-step process down to a two-step process via online payments, you realize the value you’re gaining. “To appreciate the end, you have to understand the current status.”

He also suggests you begin with the end goal in mind. “The end gain here is to do what?” Brennan asks, rhetorically. “Make it more convenient for your patient, make it more efficient for your practice, and make it more cost effective for your organization. Decreasing waste and redundancy is absolutely critical.”

In addition, make certain that you rely on an organization with the expertise to help you properly set up your online bill payment system. The key here, Brennan says, is that your bill paying operation links with existing practice management software. “That’s where the windfall occurs,” he explains. “A single keystroke now takes care of three workflows: your system to the bank, the bank back to your system, and then reconciling. Instead of three independent workflows, it’s now a single workflow.”

Ed Rabinowitz is a veteran healthcare writer and reporter. He welcomes comments at edwardr@frontiernet.net.

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