Electronic Fund Transfers (EFTs,) also known as ACH or direct deposit, are a great way to save time and money.
When a practice uses EFTs, they’re paid faster. Their staff works less on billing. And there are fewer headaches for everyone involved.
so why aren’t more practices using them?
Many providers who aren’t using EFTs simply don’t understand why they’re so valuable, or they don’t understand how to get started.
The problem with checks
There’s a lot that goes into the preparation of a check deposit from the practice’s standpoint, especially for larger groups with multiple locations. These large groups tend to have one central admin location, a PO box where the mail comes.
To deposit checks, a staff member must go to that PO box to collect the checks. They need to sign each one. They need to scan in the Explanation of Benefits (EOBs) that come along with the checks. And they need to virtually deposit the checks, or take them to the bank if you’re old school.
Even for smaller practices with only one location, this could, in theory, be a part-time job. With dozens of checks coming in each week, this adds up to a lot of time. (Not to mention a lot of unnecessary paper waste!)
The problems with lockboxes
One alternative to paying a staff member to manage your checks is to have a lockbox service. As part of the service, a company collects, signs, scans, and deposits your checks for you.
The downside to lockboxes is the expense. It costs a pretty penny to pursue this route! We have a practice that does this and the company charges them for every piece they scan…even the envelopes.
This is a good option to consider if you have no other choice but to receive physical mail and don’t want to pay someone administratively to process your checks. But it’s not the best choice.
The problem with loadable credit cards
Some insurance companies will send the practice a reloadable credit card and then transfer the balance of what is owed each payment period.
While this sounds good at first, remember that practices have to pay for this service. They also lose money with each transaction because they have to pay credit card fees.
Most practice software doesn’t have a ‘virtual pay’ option to signify this type of payment from insurance companies. They are forced to complete the payment just as they do for patients who pay with credit cards.
As a result, they pay credit card fees for the insurance payments. This also makes it hard to differentiate between patient income and payments from insurance companies — which complicates the books.
The solution
Instead of a physical check coming to the practice, instead of paying for a lockbox service, and instead of having a reloadable credit card, EFTs send the payment straight into your bank account.
Insurance companies want to move away from the extra administrative work that checks require on their end, so most are very accommodating when it comes to setting up EFTs.
One organization that can make it easier for you is the CAQH EnrollHub. This is a free system that has a number of good connections to insurance companies. Not all of them are connected but many large carriers, including the “Big 5,” are. CAQH EnrollHub allows you to create an account, set up your banking information, and connect you to the insurance companies. If your bank information expires, you can easily update it.
You’ll have to reach out to the smaller carriers individually, or contact a clearinghouse to help you navigate that. If you have a good clearinghouse (like Inlera!) they’ll help you with the paperwork to help get you connected. They’ll fill out as much as possible and send the paperwork to you to finish it up with your banking info.
It takes very little time to get it all rolling with EFTs and is so worth it in the long run. It usually takes anywhere from 4-6 weeks to complete the process, but we have some providers that see their next checks coming electronically within a week or two.
How do you receive your insurance payments — check, credit, or EFT? What do you like or dislike about the way you’re currently receiving payments? If you accept EFTs, when did you make the switch? Are you happy you did?
Our white paper 5 Strategies to Accelerate Cash Flow & Increase Profits shares more solutions to simplify your practice and increase your cashflow. Click here to download your free copy.
Jasmine Vializ is the President and CEO of Inlera, a billing and practice management company designed to increase the quality of healthcare by helping doctors to prioritize their patients while boosting their bottom line.
