Exante Financial Services Helps Health Plans, Providers Go Electronic for Payments and Statements

Health care payers seeking to reduce the administrative costs that paper remittance and payment drive into the billing process now have a tool to help them improve their current paper processes and move them toward the adoption of an electronic reimbursement and remittance process: Exante Electronic Payments and Statements Solution.

Ingenix announced on June 20 that it would offer the Exante Electronic Payments and Statements Solution to health insurance plans nationwide, with the ultimate goal of moving payers to an entirely electronic process in the near future. Although electronic reimbursement and remittance is estimated to save payers between 20 percent and 50 percent of print billing costs, electronic payments currently represent less than 10 percent of all payments.
 
“By migrating to electronic payments, the health care industry and consumers will benefit greatly through savings in cost and time,” said Dave Ostler, executive vice president of Ingenix. “Working with Exante, we want to bring convenience and efficiency to health care.”

The Exante Electronic Payments and Statements Solution should save payers money even before they complete a transition to an electronic system. For example, payers can gain greater efficiency for print-based operations by using Exante’s print facility, which processes more than 1.2 billion images and mails more than 250 million envelopes annually. The Exante print solution saves payers money by printing in volume, pre-sorting and bundling payments to providers.  

Payers, providers will help each other reach e-goals

Transitioning away from paper billing may seem challenging, but because providers increasingly are participating in electronic payment, payers immediately can reap the benefits of such a move, explained Jim Koji, vice president of product management, Exante Financial Services. For many payers, he indicated, 20 percent to 50 percent of claims volume originates from providers already enrolled in the Exante Electronic Payments and Statements Solution.

“How providers get paid is very similar to direct deposit for payroll,” Koji said. “What payers offer to the provider with an electronic process is more predictable payment, better cash flow, cost savings and a system that ties in well to practice management systems.”  
 
Currently more than 42,000 provider tax identification numbers (TINs) are enrolled in Exante’s Electronic Payments and Statements Solution. Exante processes more than 8 million claims and over $1.5 billion in electronic fund transfers each month. The company also offers provider enrollment services, partners with payers to identify and target new enrollees, and uses integrated marketing campaigns to motivate paper-based providers to switch to electronic processing.

“To grow the network, when a new payer joins, we go to the providers in that plan and encourage them to sign on,” Koji said. “And if we have a large number of providers in specific regions that want electronic payment, we can then go to the plan to see if they will support their providers by joining us. It’s a continuous loop.”

Print-to-electronic path goes faster with proper support

Exante offers an integrated solution for payers as they migrate from paper to electronic reimbursements. Through use of Exante’s high-volume printing facility, payers realize savings in print efficiencies right away. Further, because payers can reimburse both print and electronic claims from a single-payer data file, they are starting down the electronic path in a seamless manner.

“For the payer, eliminating the costs of the paper process – paper, envelopes, stamps, printing, etc. – immediately makes things more efficient and improves provider relations,” Koji said. “This is wanted and needed in the marketplace.”

For plans just getting started, Exante can conduct a custom assessment of a plan’s reimbursement and remittance cost structure and savings opportunity by reviewing the following: a list of provider TINs and, if available, related claims volume by provider; an adjudicated data file representing a day or week of claims payments (which will be used to determine the potential for claims consolidation and savings); and current printing volume and expense.

With all three pieces of the process – electronic-based payments, paper-based payments, and banking operations – Exante provides a turnkey solution to plans and providers. “But we can also be bank- or print-agnostic,” Koji said, “so if a payer does not want to change its bank it should be aware that we offer flexibility and will work with any vendor so the payer can still take advantage of Exante’s solution.”

Reducing print costs results in big savings

Exante research shows that the average cost of mailing a check and provider remittance advice ranges from 50 cents to $1.50 per item. “When you multiply that by millions of claims,” Koji said, “it is very significant.”

Although plans often recognize that they are spending a lot for paper billing, they may not fully understand that moving to an all-electronic system eliminates many cost centers in the payment and statement process. Payers moving to an electronic system will save money on:

• Paper
• Postage
• Manual labor processes
• Printing equipment
• Floor space
• Raw material holding charges
• Banking fees
• Voided/returned checks
• Claim status call inquiries
• Calls related to voided/lost/stolen checks
• Vendor account management.

How does the Electronic Payments and Statements solution work?

Payers who adopt the Electronic Payments and Statements Solution send their adjudicated claim payment files to Exante in a HIPAA ANSI X-12 835 format, which drives both print and electronic transactions. The file is validated and split into compliant and noncompliant claim payments.

Exante provides reporting back to the payer related to the level of compliance for the 835 file. Along with this reporting are detailed error explanations, which will help the payer target noncompliant errors for improvement.

Exante then runs the payer file through a consolidation engine to combine multiple payments to the same provider into one payment. The electronic remittance advice (ERA) is delivered to the provider directly (or through a clearinghouse) or returned to the payer. Payers can deliver payment to Exante Bank by transferring funds via automated clearing house (ACH) or electronic funds transfer (EFT). Exante Bank breaks the transfer down to the provider level and electronically transfers payment to the provider’s bank account.

Other products in the marketplace may solve the ERA or EFT pieces of the electronic puzzle, but that is only a partial solution, according to Exante. “Having separate ERA and EFT solutions does not help providers, and can actually increase the difficulty of reconciling payments,” says Koji. “Only a fully integrated solution can drive down administrative costs.”

Regardless of size, payers benefit

Going electronic offers payers of every size substantial savings. To examine the return on investment (ROI) and the financial impact of electronic reimbursements and remittances for payers, Exante collaborated with an independent research organization to prepare a report on this subject: A Cure for Health Care Payer’s Paper Dependency. Researchers estimate that small payer groups (150,000 members), medium-sized payer groups (750,000 members) and large payer groups (1.5 million members) all would achieve significant savings from a reduction in paper-based costs.

The breakdown of cumulative, projected savings and the ROI for a five-year study period are as follows:

• Small payers – a projected net benefit of just under $1 million and an ROI of 57 percent, with a payback period of nine months;
• Large and medium-sized payers – a projected net benefit of more than $5 million with a payback period of two months. Exante estimates that medium-sized payers can see an ROI of 46 percent and large payers can see an ROI of 66 percent – both with a payback period of two months.

These numbers demonstrate that lower costs are indeed part of the electronic payment equation, and that electronic payment is a win-win, cost-cutting strategy for payers, providers, and health care consumers.

“We founded Exante because we saw an opportunity to revolutionize health care finance and introduce a better way of doing business,” said John Prince, chief executive officer of Exante. “Working with Ingenix will help us deliver faster, easier and more profitable payment systems to customers and help lower costs for millions of consumers.”

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