Payments: Imperial Bank of CA Helps Dentists Extract Payments

Faced with about $60 billion in uncollectible debt each year, the healthcare industry is searching for ways to get customers to pay up. For Imperial Bank of California, this phenomenon presented an opportunity to help some of its clientsoin this case, independent dentists in Washingtonoextract more payments from patients while the bank benefits from additional revenue generated by increased credit card transactions. "We looked at it as an accounts receivable problem," says Michael Sims, svp of Imperial's healthcare technology group. "Through a combination of using standard credit card technology and access to insurance eligibility, you can cut accounts receivable."

The first implementation of Imperial Bank's Receivables Payment Manager service is in conjunction with Washington Dental Services, the largest provider of dental benefits in the state of Washington. The system enables a dentist's office to determine insurance eligibility for each patient, including co-payment charges and deductible amounts, by entering the patient's social security number into a Hypercom T7GQ point-of-sale (POS) terminal with an integrated QWERTY keyboard.

The eligibility and payment information is printed out, and patients have an option of paying with cash, check, credit card or debit card. The system also takes advantage of Visa and MasterCard programs, like Visa's Easy Pay, that allow patients to have their credit cards automatically charged each month. The patient signs a contract printed by the terminal defining the parameters of credit card payment. "It gives a 'not to exceed' dollar amount and a 'not to exceed' time frame," Sims says. "Every month that dentist's office recalls that (information) out of the machine, because it holds it resident in the machine, and instead of sending out a paper bill which costs $20 he just punches in the information and gets payment within 24 hours."

Imperial estimates that dentists collecting $350,000 to $400,000 in revenue each year could save between $35,000 and $40,000 in costs by reducing time spent verifying insurance eligibility, eliminating the costs of mailing bills to patients and increasing credit card payments that might have otherwise eventually been written off as bad debt.

Benefits to the bank are equally great. Imperial Bank is the merchant processor of all credit card transactions of participating dentists; in addition, each office pays the bank $39.95 per month for the service. Sims declined to reveal revenue projections for the project, but says that even while the project was in beta testing, the credit card revenue per office increased 20 percent. "The national average for all businesses that accept credit cards is 27 percent (of transactions)," he says. "Obviously, the goal is to get in that range some place. How long it will take? We have no idea."

Presently, Imperial Bank's Receivables Payment Manager service is used in about 25 dental offices in Washington, Sims says, but the potential for growth is exponential. About 3,000 dentists are members of the Washington Dental Services DMO, and Imperial is working to add insurance companies to its list of participating organizations. "There may end up being Prudential or Cignaoa whole slew of insurance companies," says Sims. "Eventually, we hope to have the greater part of the insurance industry covered."

Imperial Bank is one of the industry's few banksopossibly the only one, Sims saysoto have a healthcare technology group, a result of the bank's strategic focus on its business customers. "One of the charges of this group is to find ways to make our clients more efficient, and automating systems makes them much more efficient," he adds.

And while Imperial Bank's Receivables Payments Manager has been implemented by only a handful of dental offices in Washington, Sims says this model is a glimpse of the future of healthcare economics. "These docs have been loaning money to their patients for decades," he says. "Banks loan money, docs don't. We see that as a major shift coming along with automation."

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