Helping doctors accept more credit and debit card payments could increase profits for ISOs and agents, but teaching medical office staff and patients how such systems work presents challenges.
To address those difficulties, TransEngen Inc., a Wilton, Conn.-based health care payments processor, on Dec. 20 agreed to a strategic relationship with Vantiv LLC.
Cincinnati-based Vantiv, formerly Fifth Third Processing Solutions LLC, has been building its health care payments operation over the last year. It has identified health care as one of the payment industry’s fastest-growing channels.
The firm plans to add TransEngen’s Healthcare Virtual Payments System to the range of services it offers, Vantiv said in a press release.
The deal underscores the need for health care providers to find new payment processes to cope with the growing burden of out-of-pocket consumer health care costs and the declining use of checks for routine payments, experts say.
“With the shift to more consumer-directed payments, medical providers are experiencing a substantial financial burden from outstanding patient receivables,” Bill Weingart, Vantiv chief product officer, said in the release. TransEngen’s product “offers a proven way to increase patient collections and revenues and a health care platform to expand upon in the future,” he added.
Health care providers can install TransEngen’s Healthcare Virtual Payments System in a medical office’s established billing and payment systems. Using modules connected to health-insurance companies, TransEngen’s product enables medical providers to generate a “near-exact” estimate of the total cost of proposed health care services quickly before the services are administered, Mike Pileggi, TransEngen sales manager, tells ISO&Agent Weekly.
Health care providers can then process patients’ payments or arrange for payment not covered by insurance and set up automated, no-interest, recurring payment plans, Pileggi says. Patients can choose to pay by cash, check, bank account deductions via the automated clearinghouse system, or by credit or debit cards, he says.
Integrating credit and debit cards into medical offices’ upfront payment plans tends to triple the volume of most offices’ credit and debit card payments, resulting in faster and more complete payment collection for medical offices, Pileggi says.
“Introducing cards to the mix (with TransEngen’s product) means that doctors’ offices get paid much faster because it is a guaranteed payment versus sending out bills or waiting to get patients’ bank-account details,” he says. Medical offices typically see a “dramatic” increase in collectible revenue after implementing TransEngen’s system, Pileggi says.
But medical-office personnel are often reluctant to change their processes, Pileggi says. And patients often balk at providing their payment information up front, before services are administered.
“It takes time to explain the new procedure to patients, and medical offices are stretched thin so there is a challenge there in educating people about how it all works,” Pileggi says.
Vantiv, which already has begun building a health care payments sales force, is primed to help close that gap, he says.
Once a medical office has adopted TransEngen’s system, it becomes less likely to switch to another system, unlike merchants in other industries such as hospitality, where payment-processing provider turnover is higher, he says.
“Health care payments is a tougher product to explain and sell, but the client turnover is relatively low because the results generally are much better than the previous systems doctors’ offices were using,” Pileggi says.
TransEngen’s product costs medical offices a flat fee of $30 to $40 per month, depending on the size of the practice, he says. Vantiv charges medical-office clients a separate per-transaction processing fee that varies based on negotiations, he says.
So far some 15,000 medical offices nationwide are using TransEngen’s product, which is “just a tiny fraction” of the potential market, Pileggi says.
“The sad thing is that if health care is a $60 billion market, we have only tapped about $100 million of it so far, and that’s primarily because it’s such a tough channel to break into,” Pileggi says.
