Sending bills and customer-facing communication as well as processing payments are a critical function of a health insurance company’s business. This behind-the-scenes operation is one that traditionally requires significant resources and has a widespread impact across an organization. Bill delivery is crucial for two primary reasons. First, these items, whether delivered via paper mail or online through a portal, are an insurance company’s most consistent, direct line of communication to its customers. Second, the manner in which bills are sent and received impacts an organization’s cash flow.
As new payment channels emerge, such as mobile payment tools, how can insurance companies make these options available to consumers without creating an additional burden for themselves? A technology investment is never an easy decision for any organization; however, modern solutions for billing and payments are bringing insurance companies vast and immediate advantages. From improving customer outreach to accelerating payment processing, technology is the key to improving not just a single function, but many aspects of a health insurance company’s business.
Consumers want options
Treasury management for insurance companies – and really any company with a billing function – has become extremely intricate. In many ways, this can be attributed to advancements in technology that have brought about a wide array of payment channels. Consumers are aware of these payment options; they are accustomed to purchasing almost anything using a Smartphone or tablet and want the same convenience when interacting with insurance companies and paying bills. They expect to have access to an online portal and now, even a mobile app to review statements and make payments.
However, the clear demand for online and mobile options does not necessarily mean consumers want communication to be entirely paperless. Ironically, while they expect the convenience of modern, self-service channels, the vast majority also wants to receive a paper statement – regardless of how tech savvy they are. A survey conducted by InfoTrends found that consumers value receiving bills by mail because the physical document acts as a payment reminder and can go into their personal archive. Now, to align with customers’ desires, insurance companies are exploring ways to efficiently deliver bills as well as collect and process payments through multiple channels.
Consolidating payment channels
If we look at the evolution of billing and payment channels over the past 15 years, we see large waves of technology adoption. Some early-adopter companies jumped on board and began offering different payment alternatives initially when they became available. Perhaps they partnered with a company that made it possible for them to accept credit card payments and another to provide an online portal. This approach likely gives consumers what they want – but comes at a cost: added work and complexities for the insurance companies on the back end to manage these various channels.
While choosing specific vendors for specific tasks was the right decision at the time, implementing each channel separately resulted in siloed solutions. Additionally, this method typically creates discrepancies and leads to more exceptions, preventing companies from gaining a holistic and real-time view into their cash flow. With several channels operating separately, it can be almost impossible to see exactly where money is at any given time.
Insurance companies need a better way to achieve balance between delivering online and mobile options and ensuring efficiency and cost effectiveness for the organization. As opposed to separate products, to achieve this requires a solution that handles both the bill delivery and receipt sides of the process as well as consolidates all payment channels, regardless of whether they arrive via paper check or through an app – into one, single stream. It is not just the bill distribution and collection, but also the payment processing step that must be enhanced. Managing just one technology for the entire process solves for the cost burden and can result in an accurate view of a company’s cash flow.
Why update tech now?
Regulatory changes have significantly affected payer and provider programs, making it even more urgent for insurance companies to update their billing processes. If a health care company has three backend systems, for example, it makes resolving exceptions extremely difficult. This usually requires an insurance company to conduct multiple searches to remedy the issue and ensure the payment is applied to the correct system.
Also, in the world of health care insurance, companies are seeing more competition, new or updated plans being offered every year as well as higher customer churn. The resulting changes to internal billing and payment processing systems have made them more complex than ever to manage. Insurance companies enlisting different providers for each channel are finding that this fragmented approach leads to a considerable number of discrepancies, since updates cannot be made instantly across all systems.
For instance, if a member changes the type of product he or she subscribes to, either voluntarily or not; this information must be modified within every channel. If someone changes a payment plan, this information is rarely updated immediately across the board, online and among the various payment channels the member can access. Another example of this occurs commonly when an employee leaves a company and goes from a standard company insurance plan to a Consolidated Omnibus Budget Reconciliation Act (COBRA) plan. Typically, the last thing on his or her mind is to update all of the bank payment channels to switch over to the COBRA enrollment ID right away, creating additional channel-specific exceptions.
Exceptions can also result from channel providers or the payment type being used. For example, in small group insurance, premiums may be paid with wires, where — frequently — beneficiary information is provided in the comments field, and enrollment or plan information is missing, causing exceptions in the payment application process.
These scenarios are common and create repeated exceptions when payments are posted. Insurance companies should adapt their billing and payment methods and consolidate separate channels, ensuring account numbers and customer data are updated at a central point. This can usually be managed by a payment integration provider, which can then coordinate changes to other channel-specific providers as well as perform centralized exception management to resolve inconsistencies. The sources of repeated exceptions can be addressed with rule-based exception handling, which can reduce or eliminate several different types of common exceptions. Adopting these best practices can reduce the bill-to-cash cycle time as well as improve customer satisfaction.
Tips for the modern bill
Investing in paper billing procedures might seem outdated; however, since most customers still want to receive these invoices the old-fashioned way, and bills are a primary communication tool, insurance companies need to look at solutions that include programs to sharpen bill design. This can entail the aesthetics of bills as well as how messages are tailored for a certain customer base or geographic area. When investing in a more modern, consolidated billing strategy, insurance companies would be wise to go the extra mile and add color print to make statements more appealing and serve as stronger marketing tools. Color printing options and composition tools enable insurance companies to design bills to emphasize items of importance or key marketing messages and allow company logos to stand out.
Additionally, new or modified regulations traditionally require insurance companies to send critical communication to their customers. These communication requirements can be standard forms that vary marginally by state (for example, form 1099-HC) or personalized and member-specific plan information (such as renewal and broker packages sent to small group customers).
To reduce the financial burden these mailings usually bring, insurance companies with a progressive solution in place for billing can leverage the monthly statements they already send to add such regulatory communications. By adding an insert with relevant or crucial information to the customer statement, they reduce the number of items sent, cutting both paper and mailing costs. Research shows that 97 percent of transactional mail is opened and read in 2-5 minutes. Therefore, including the critical customer communication within the bill also increases the likelihood that these messages will be read.
Falling in line with consumers’ desire to transact on-the-go via a mobile device, many companies are incorporating quick response, or QR codes into their billing strategies. These matrix barcodes let consumers use an app to view their statements or even pay a bill remotely. This is a cost effective option and shows customers that the organization is on top of technology trends and dedicated to providing a convenient experience. Additionally, this option eliminates the need to enter information manually, reducing the time spent on the back end and decreasing errors and exceptions.
Health insurance companies certainly have full plates; with many moving parts at all times, sending, receiving and processing invoices should not be a challenge, but rather a process that empowers companies to better understand and serve their customers. Identifying one solution to manage the entire lifecycle of a bill, from the time it is sent until the payment is processed, also allows insurance companies to collect valuable, actionable insight on their customer base that can be used to further improve their processes.
It is time to view bills as more than just a notice to customers that payment is due, but instead, as an overall service provided, a communication tool, a marketing tool and in many ways, the primary customer service identity of the company.