New Healthcare Lockbox solution improves receivables management

Treasury Management
October 2013

Banks have traditionally offered healthcare providers a standard lockbox solution in which they collect mailed remittances, open the mail, deposit the checks and forward the remittance documents to the provider. Banks have also captured images of remittance documents, such as checks and Explanation of Benefit (EOB) forms, and enabled healthcare providers to research the images online on an intraday basis and post payments, all from the same system.

In addition to collecting insurance payments via wholesale lockbox, banks have allowed healthcare providers to collect patient payments mailed in with a scannable coupon through their retail lockbox services.

Beyond these traditional capabilities, Capital One Bank® now offers two new Healthcare Lockbox enhancements to assist healthcare providers with some of today’s pressing receivables management challenges unique to their industry.

New auto-posting feature

One of these enhancements is the ability to automatically post insurance payments to a patient accounting system using an EDI 835, the standard electronic file format for healthcare claim payment advices.

Capital One now has the technology to extract the necessary data from each check, EOB or Explanation of Payment (EOP), and translate it into an 835 posting file. "The healthcare provider can use this file to automatically update its patient accounting system," explains Marsha Montgomery, senior vice president and product director, Treasury Management.

"If the provider is already receiving electronic 835 files directly from some of its insurance payers, those files can be consolidated into the 835 posting file we create from document images captured as part of the lockbox process," Montgomery says.

This enhanced lockbox feature also supports the development of a more complete and accurate 835 file. The service allows the healthcare provider to send its EDI 837 claim file to the bank, which uses the information in the 837 to match claim data against the payment record. In this way, Capital One can verify information, make corrections and add any missing information. This matching process is designed to improve the provider’s automatic accounts receivable posting rate.

Healthcare Lockbox enables hospitals and medical practices to accelerate cash flow and improve Days Sales Outstanding (DSO) by more efficiently processing remittance checks and depositing them into the provider’s bank account. In addition, this new automated posting capability can reduce the manual keying of EOB/EOP information, and improve the accuracy and speed of payment posting.

Healthcare Lockbox web portal

The second notable enhancement to Capital One’s Healthcare Lockbox is a web portal that — in addition to enabling providers to download 835 posting files — allows them to research claims and view the images of the checks and EOB/EOPs that have been processed. "Providers can use this web portal feature to search for remittance data, and research claims and denial information," says Lauren Farrell, senior vice president and senior director, receivables products.

"Using the Healthcare Lockbox web portal, a provider can search for information by claim or by payment," Farrell reports. "This simplified research process can speed reconcilement of each payment with the associated claim, which further increases administrative efficiency."

Each day, healthcare providers are faced with the need to reconcile individual checks with EOBs representing multiple payments, and more than half of checks are sent to them with an electronic remittance, further complicating matters. "Capital One’s enhanced Healthcare Lockbox solution helps providers address these difficult reconciliation challenges," Farrell says.

This article is for informational purposes only, does not constitute the rendering of legal, accounting or other professional services by Capital One, N.A., or any of its subsidiaries or affiliates, and is given without any warranty whatsoever. Normal credit qualifications apply. Products and services offered by Capital One, N.A. © 2014 Capital One.
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