Software, Not Spreadsheets, Solves Healthcare’s Cash Flow Bottlenecks

For smaller healthcare providers, manual processes dominate the back office — and when it comes to reconciling remittances with deposits, pain points emerge that rival any sprain or bruise. Cash flows suffer. Productivity suffers too, because staff are so intricately involved in maintaining and updating files and other data.

Dee Harding, chief product officer at Fifth Third Bank’s Big Data Healthcare subsidiary, told PYMNTS in a recent interview that as providers receive payments for services that have been rendered, complexity reigns. She noted that healthcare payers often send one electronic remittance advice file for posting and will send several checks within that file. But when they deposit the money into an organization’s bank accounts they are sending one deposit per check number.

“This creates a ‘many to one’ reconciliation that creates a barrier for our clients,” she said. There are a number of paths that these smaller healthcare companies take, Harding said — and none of them seem optimal. Some firms don’t have the resources to even attempt to tackle reconciliation at the time that they receive that remittance advice — they just go ahead and post it.

“They may come back to it at a later time, or they may have someone else in the organization try to reconcile, or they may just post to get that money to alleviate their accounts receivable and move on,” Harding said.

Other firms, she said, set up their own manual processes — logging into the bank account, pulling down all the depository information into an Excel spreadsheet, and then that spreadsheet gets passed around, to the cash posting team and to others.

“At that point, the cash posting team is trying to fumble through that electronic remittance advice, trying to figure out what, what checks they can actually post out of that,” Harding said.

Still other healthcare entities, she said, opt to work with consultants or outside vendors, giving rise to macro, super-spreadsheets, complete with multiple tabs. The spreadsheets are tinkered with by several stakeholders, become unwieldy and sometimes ineffective at finding out where payments are, and where they should be.

All told, she said, with the manual reconciliation processes just described, hours are spent in grappling with several bank accounts and data flows, she said. Clearing houses and electronic medical records systems (which have created their own reconciliation processes) lift at least some of the burdens, but they have their own limitations — such as a finite number of bank accounts that can be loaded … and things are not fully automated.

What Forward-Thinking Firms Do

Forward-thinking firms, Harding said, are seeking software options that (as provided by firms such as Big Data Healthcare) break down these barriers — handling multiple bank accounts and feeds from multiple clearing houses.

“It’s software that brings all of the pieces into one area and provides the transparency for all deposits, all remittance advice. It can even bring in some cash posting reports from those electronic medical records for reconciliation,” she said, adding that that single point of access, through intelligent data automation “is going to give the client one area to really focus on and should offer some automation of those paper processes.”

Along the way the dependency on paper is lessened — not just the paper explanations of benefits and other details but the papers tied to correspondence between providers, payers and even patients — so there’s no confusion amid the data flows.

As to the positive ripple effects: Reconciling the deposit to the remittance advice, and even to what’s being posted within the system, means firms accelerate their cash flow, Harding said.

“Having a system that actually allows you to assign the correct general ledger account to these transactions is really where we see the industry going,” she said.

The post Software, Not Spreadsheets, Solves Healthcare’s Cash Flow Bottlenecks appeared first on PYMNTS.com.