Like a specialist working with a primary care doctor, US Bank takes a tag-team approach to bundling commercial lending with payments and processing automation.

"The commercial lending group will bring us in to demonstrate our capabilities to the provider," says Ralph Bernstein, svp of healthcare payment solutions at US Bank, who says his combination of lockbox and payment technology with treasury management and other services keyed a recent client win.

Not surprising. An increasing number of banks are finding that delivering a bundle of traditional financial services with treasury management and IT is the newest way to compete for healthcare provider customers as payments messaging automation becomes a commodity.

Red Gillen, a senior analyst at Celent, recently finished a study that found paper-to-electronic processing of EOBs-a staple of healthcare payments automation-is becoming commoditized; side-by-side analysis found many vendors essentially offer the same EOB paper-to-electronic conversion functionality.

"And in the Senate [healthcare reform bill], there's language that calls for the healthcare industry to standardize electronic messaging formats," Gillen says. This would force insurers to use the same electronic remittance procedures, which would further commoditized the technology, since the four or five systems payers use to handle different formats would be unnecessary. Beyond IT projects by payers and insurers to update claims systems, the legislation should make remittance efficient and standard.

But as one product becomes commoditized, another innovation emerges. Banks are finding new traction with revenue cycle management (RCM). Managing revenue is harder now because HSAs and other self-directed payment plans make managing the timing and amount of payments tough for providers. About five percent of healthcare payments came from patients about three years ago; a percentage that will hit about 20 percent in the next couple of years, says Stuart Hanson, vp of healthcare solutions at Fifth Third Bank.

"The more we can do to help the accounts receivable and revenue cycle process, the better it is on a number of fronts," he says. "More providers are looking to their banks and solution providers to provide back-end systems and accounting systems. That's opened a lot of doors for clients that are very comfortable with the old way."

Fifth Third, whose healthcare RCM technology includes the bank's RevLink product, plans to use technology to speed payment negotiation and, in a reverse play, as a springboard to providing traditional financing to providers. Hanson says, "We have extensive credit relationships with providers, so with these providers [RCM] is a great place to enter [for an expanded relationship]."

At US Bank, Bernstein's unit provides a Web-based payment tool that facilitates up-front collection of patient payables; integrates data with patient account systems; and offers other functions such as eligibility, estimation, one-time payment, payment plans and patient financing. Patients also have access to their accounts, and can view statements, pay bills and update insurance information online. These services are pitched along with the bank's commercial lending group, which writes lines of credit and works with hospitals on bond issues, and/or the bank's treasury management group-which works with hospitals on lockbox needs.

There's also potential for vendors such as Emdeon, InstaMed and others that focus on automating healthcare records processing to partner with banks (Fifth Third and US Bank did not disclose tech partners). Emdeon is looking to form partnerships with banks to allow banks to provide end-to-end automated payments processing, which would help with tasks such as matching the dollar amounts of payments and remittance statements.

"A bank doesn't want another bank to be able to do that for a healthcare provider, because that bank can get a foot in the door for that client," says Tom Turi, svp, financial services for Emdeon.

Firms that provide collections technology, such as InstaMed, hope reducing chargeoffs can be another lure. It offers clearinghouse services, payments estimations, transaction processing, claims submission, return mail capabilities and online mail options as a means to aid healthcare patient collections.

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