Reduce Healthcare Payment Processing Costs with an Automated Solution
Author: Blake Sorrell, Director, Healthcare Banking
Healthcare providers face a variety of challenges when paying vendors, including long payment cycles, uneven cash flow and high costs. Part of the problem lies with outdated and inefficient payment processes.
Paper checks remain one of the most common ways that healthcare providers pay vendors. Because check payments are time-consuming and require a lot of manual work, providers face higher costs. These include the time needed for processing and reconciliation as well as the expense of printing, mailing and delivering checks.
Providers also experience higher error rates with manual AP processes. One report indicates that accounts payable errors cost the industry up to $6 billion annually, while invoice issues add up to $40 billion.
The proficiency associated with digital payments reduces error rates as well as days to payment, allowing both providers and suppliers to reconcile accounts more quickly and improve cash flow management.
However, digitizing healthcare payment processes isn’t always a straight and easy path to efficiency or cost savings. Providers must onboard vendors into payment systems and ensure compliance with payment regulations. There is also the challenge of maintaining accurate, up-to-date payment information.
This is where automated payment solutions, such as FNBO GHX ePay, can help by removing many of the hassles providers face when implementing a new system and initiating electronic payments to vendors.
Getting Started with GHX ePay
Built for a niche network of medical supply vendors, GHX ePay was created to address the unique AP needs of healthcare providers. The solution supports multiple payment methods, including ACH and credit cards.
With diverse payment rails available, FNBO GHX ePay makes it possible for hospitals and facilities to meet the individual payment preferences of their suppliers. While vendors typically prefer ACH and direct deposit payments, the introduction of virtual cards is changing the game in the healthcare space. Virtual cards help reduce fraud by providing businesses with a randomly generated, one-time use number. All while allowing the supplier to access funds immediately upon payment.
Within the GHX ePay network, providers can efficiently and safely pay vendors who prefer a card settlement, using FNBO’s virtual card technology.
Some of the largest medical supply vendors are in the GHX ePay network, including those that only accept ACH payments. For those vendors, FNBO GHX ePay uses an expedited ACH with terms that allow the vendor to receive funds more rapidly and in turn gives the provider a rebate. Instead of paying these vendors with a check or typical ACH, making a payment through the ePay program allows the provider to create a revenue stream where there otherwise wouldn’t be one.
With FNBO GHX ePay, suppliers and providers both receive the benefits of automation, including a single batch file for processing. Providers compile a single file from their accounting system of all vendors requiring payment, including amounts. The program matches suppliers to their preferred payment type and makes the payment accordingly, on the provider’s behalf.
Hospitals then receive a report for each vendor, eliminating the need for manual reconciliation.
Likewise, healthcare suppliers receive a single payment file for all of the providers on their ePay network, enabling faster reconciliation.
Overall, FNBO GHX ePay reduces the effort expended by providers when processing payments by as much as 80%. Best of all, there are no fees or startup costs when signing up for ePay through FNBO, making it possible for healthcare providers to reduce supplier payment headaches, while efficiently raising the bottom line.
Interested in learning more or getting started with FNBO GHX ePay? Contact our team.
FNBO Healthcare Banking offers a full suite of revenue cycle and accounts payable solutions that allow our customers to focus their time and resources on what matters most – providing the best possible healthcare services throughout our communities. We offer financing for working capital, new construction, renovations, equipment acquisitions, medical lockbox, accounts payable solutions and patient financing.
About the Author
Blake is a Director of Healthcare Banking, working with hospitals to contain costs, improve controls and accelerate revenue cycles. He believes that stronger financial management can mitigate many concerns around profitability, allowing administrators to focus more on patient outcomes. Blake is proud to be a part of the FNBO community—one that meets the definition of a “great big, small bank”—and strives for the personal touch in all of his banking relationships.
The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.