US Bank takes a swing at automating healthcare payments

• Key insights: U.S. Bank has hired payments vet Eric Levine to head healthcare automation at the bank. 
• What's at stake: Healthcare payments are still largely paper-based, but make up about 20% of the U.S. economy. 
• Forward look: U.S. Bank will use a cross-department team to look for uses for AI to improve healthcare finance.. 

Going to a doctor still involves lots of checks, paper bills and manual forms, long after digital payments have overtaken other industries. With new payment technology proliferating, banks and fintechs are stepping up efforts to declutter healthcare transactions. 

 "Healthcare organizations face a lot of headwinds, such as rising labor costs, staff shortages, and the cost of medical supplies," Eric Levine, head of healthcare for payments at U.S. Bancorp, told American Banker. "There is demand for easier payments and a better experience."

The bank is adding senior staff as it accelerates a project that will use AI and other emerging technology to digitize the parts of healthcare that are not directly related to treating patients, such as recordkeeping, documentation, benefits management, invoicing and payments. "The priority is to collect faster with more flexibility to make paying for medical needs just like any other experience," Levin said. 

U.S. Bank's trip to the clinic

Levine, who just joined the bank, reports to Peter Geronimo, an executive vice president who joined U.S. Bank in February. Geronimo leads the bank's payments, merchant and institutional sales division — which manages the healthcare project. 

Levine will lead a team that will develop products for hospitals, healthcare payers, media device manufacturers and life sciences companies. The initiative to add more technology builds on earlier work at U.S. Bank to sell financial services and payments to healthcare providers. 

"There's a broken payment system that we think we have the assets to improve," Geronimo said. "Why are 70% of healthcare payments still made by paper checks? We're going to work to understand that and how we can change it." 

Levine has more than 20 years of experience in payments and related industries. He most recently was at Bank of America, where he worked on payment products for large pharmaceutical and medical device companies. He also had payment executive roles at Citi and JPMorganChase. 

U.S. Bank is building a payment rail that will aim to connect the different parties involved in healthcare, including providers, insurance companies and patients. It will draw on the bank's 2024 acquisition of Salucro, a healthcare-focused online billing company; and internal assets such as U.S. Bank's Elavon payment technology subsidiary.

This cross-department work will enable the bank to pair its healthcare products with existing payment products.  

"We can send patient refunds by Zelle, for example, which is a plus because consumers usually don't know their account numbers by heart," Levine said. 

The bank will additionally seek uses for emerging payment technology such as blockchain and agentic AI. 

"We're looking at how we can create value [earlier] in the revenue cycle," Levine said, adding AI can be used to automate information accrual and processing to shorten the time involved in claims management, invoicing, explanation of benefits and other common healthcare paperwork. 

Healthcare payment fintechs such as Waystar and Nym Health, for example, are using AI to match medical language to billing codes and proactively determine insurance eligibility. 

"AI absolutely offers an opportunity to streamline complexity in healthcare payments, especially around data verification and compliance checks that bog down processes today. It can help automate eligibility and claims processing," Aaron McPherson, principal at AFM Consulting, told American Banker.

Worth the effort

The complex nature of healthcare payments, which includes practitioners, suppliers and different payers, has made it more difficult to introduce automation and other elements of e-commerce that are common in other businesses. 

The size of the market makes it attractive for banks and fintechs. 

Healthcare represents one in every five dollars spent in the U.S. economy, according to research from Peterson/KFF. The costs are split, with the federal government making up 31% of the payments, state and local governments 16%, employers 18% and individuals 6% via insurance plans; and other payers. A four-person family that has employer-sponsored insurance coverage paid an average of $6,296 in premiums and $3,564 in out-of-pocket spending in 2023, according to the most recent Peterson/KFF data. Total healthcare payments in 2024 were $5.3 trillion, according to most recent data from the National Center for Health Statistics, which adds that healthcare costs are growing about 7% yearly. 

Banks are approaching healthcare finance through a mix of internal development, fintech partnerships and buying technology. Fiserv, for example, has developed a payment platform that expands its Clover point of sale system to include healthcare transactions. Banks are also using embedded payments, or data-sharing that enables checkout to be placed inside of nonbank services, to improve healthcare transaction processing.

Among other large banks, JPMorganChase has added cloud-hosted technology to reduce paper in healthcare transactions progressing, and Bank of America has also expanded its outreach to healthcare companies. Large banks have a potential advantage in selling payment technology to healthcare merchants, according to McPherson. "Scale allows them to invest heavily in proprietary AI solutions and integrate them deeply into existing banking infrastructure, which fintechs often struggle to match in regulated environments. They can also leverage existing relationships."