As the health care industry eyes new systems to streamline and improve the collection of payments from patients, New York-based Phreesia Inc. is promoting a tablet-like device that records patients’ personal and insurance information and doubles as a card-payment terminal.
The device proposes yet another option to the growing array of software programs certain medical offices are deploying to lock in payment data, often via credit and debit cards, from consumers shouldering more upfront medical costs as high-deductible health insurance policies gain market share (
The wireless PhreesiaPad, approximately the size and weight of a tablet PC, is designed for patients to receive as soon as they check in at a doctor’s office, Chaim Indig, chief executive officer of the firm he co-founded in 2005, tells PaymentsSource.
Instead of manually filling out paperwork with personal information, medical history and insurance details, the patient provides that data by following commands on the PhreesiaPad touch-screen, which links to Web-based software systems medical offices often integrate with their electronic records-management systems.
The PhreesiaPad enables medical providers to verify whether a prospective patient has insurance coverage immediately and which payments, such as co-pays, are due at the time of the service.
Medical offices may request that patients, upon checking in, swipe payment cards through a magnetic stripe card reader attached to the side of the device to ensure payment at the time of service or later, when insurance companies reconcile the final amount the patient owes.
The PhreesiaPad also offers medical providers the option to enable patients carrying a balance to set up plans that would deduct payments monthly from a credit or debit card or a bank account, the company says. Patients also may opt to pay the office directly via cash or check.
So far, only about 25% of hundreds of participating medical offices have opted to use the card-swipe feature, Indig says. But the company’s goal this year is to “significantly” expand the proportion of medical offices deploying the card-swipe feature on PhreesiaPads, through promotions and sales efforts.
“Cards are the preferred channel for medical-office payments, and our device solves a number of their problems at once by eliminating paperwork, guaranteeing payment and speeding everything up,” Indig says.
At physicians’ offices that have deployed the card-swipe feature with the PhreesiaPad, the collection rate of payments due has increased an average of 10%, Indig says.
Phreesia recommends that medical offices obtain approximately 1.5 PhreesiaPads for each physician within a practice, but some practices may require more devices, depending on patient volume, the firm says. The cost of the devices is included in the fees medical offices pay to Phreesia.
The PhreesiaPad easily integrates with widely used medical practice-management software that controls patient medical records, scheduling and billing, a spokesperson says. The device wirelessly transmits data for payment authorization at the time of the swipe; U.S. Bancorp.’s Elavon Inc. unit settles the transactions at the end of each business day, and medical practices receive the funds within 48 hours, the company says.
Phreesia charges physicians a flat processing fee estimated at $1 for every $25 in patient medical-payments it processes. This includes interchange and transaction-processing fees. There is also a monthly service fee charged to practices based on their scope and size, which covers the equipment, support and insurance-coverage verification.
“The cost to doctors varies, but it is definitely less than the total cost of interchange plus billing services, paperwork and other associated costs for services Phreesia replaces,” Indig says.
So far, Phreesia has distributed some 18,000 of the devices to doctors’ offices during its pilot phase and early rollout; this year the company plans to expand to “thousands” more doctors’ offices and clinics, Indig says.
Phreesia, which is selling the device through its own dedicated sales force and through third-party channels, recently inked a five-year alliance with Elavon as the firm’s exclusive payment processor. U.S. Bancorp is the sponsoring bank. The company’s Phreesia Payment Services also is a registered independent sales organization of U.S. Bank.
The firm last year achieved certification status as a Level 1 Service Provider compliant with the Payment Card Industry Data Security Standard for the PhreesiaPad, which Morganville, N.J.-based Aurora Multimedia Co. manufactures.
“In addition to guaranteeing that doctors will be paid for services performed, Phreesia also sets physicians free from the hassles of PCI compliance because we store the payment card data in our systems,” Indig says.
Since its launch, Phreesia has accumulated more than $45 million in venture-capital funds. Investors include BlueCross BlueShield Venture Partners L.P., Polaris Venture Partners, Sandbox Industries Inc. and HLM Venture Partners.
Indig envisions broad adoption of the PhreesiaPad, but the medical-payments market is alive with competition from rivals, including Total System Services Inc., which recently began marketing First Paid, a card-based health care payment service, through TSYS Merchant Solutions.
And as competing systems to collect health care payments mushroom, it may undermine a broader goal of streamlining overall payments processes for payers, health care payments analysts suggest.
Indeed, while the new card-based payment systems are likely to increase medical offices’ payment-collection rates, “widespread adoption is limited by (market) fragmentation,” says Shubham Singhal, a McKinsey & Co. consultant who studies health care payments trends.
