Healthcare payments is the electronic payment from a health plan to a doctor, clinic or hospital, together with the details of what each payment covers. In the United States, the payment is usually a bank transfer called an EFT, an electronic funds transfer. The details come in a separate file called an electronic remittance advice, or ERA. Companies in this business pay providers on behalf of many health plans. Some have engineers in Hyderabad.
Why are the details so important? One payment from an insurer often pays dozens or hundreds of claims at once. Some claims are paid in full, some are reduced and some are denied. Without the details, the clinic cannot tell which patient's bill has been paid, or how much each patient still owes.
Consider a children's clinic in Nashville, Tennessee, in the United States. On Friday, its bank account receives one deposit of $18,460 from an insurer. On the same day, its revenue cycle management (RCM) system receives the ERA, through a healthcare clearinghouse. The ERA lists 112 claims. For each one, it gives the amount billed, the amount allowed by the contract, the amount paid and the amount the patient owes. For reduced or denied claims, it gives a standard reason code. The RCM system matches the deposit against the 112 claims and checks that they add up to $18,460. This matching is called reconciliation. Then the system bills each family for its share.
The payment begins at the insurer. Claims adjudication decides each claim, and payment integrity checks the amount. The payment company then groups the approved claims for each provider into one payment and one ERA. The money moves through the banking system. Inside a bank, such transfers pass through a payment hub, the one system through which the bank sends and receives every kind of payment.
Some payments are made in another way. Some insurers pay with a virtual card, a card number used once for one payment. The clinic types it into its card machine. This is quick for the insurer, but the clinic pays a card fee of a few per cent. So many clinics ask to be paid by EFT instead.
In India, the job is simpler but similar. After a cashless claim, an Indian insurer or TPA pays the hospital by NEFT, and sends a settlement letter that explains the amount and any deductions. These payments are also moving onto the National Health Claims Exchange (NHCX), with the payment details in a standard format.