See how forward-thinking finance teams are future-proofing their organizations through AP automation.
Digital transformations are changing how healthcare providers operate, and patients interact with healthcare organizations. Every healthcare business, from a small specialist’s clinic to a major hospital, has a multitude of complex workflows and tasks that include billing nuances, regulations, manual processes, and a continual flow of patients. Things have only been complicated further by a pandemic and shortage of skilled workers.
Yet, recent studies show that technology-driven innovation enables the delivery of more individualized care, improves the understanding of patients, and will create $350 billion–$410 billion in annual value by 2025. The goal of a paperless system is not to replace humans, but rather, to give healthcare staff the room to focus on providing more personalized care while offering patients better service, greater privacy, and more convenience.
Common examples of digital technologies used in health systems include:
- online appointment scheduling
- electronic medical record systems (EHRs, EMRs, and PHRs)
- self-service patient portals
- electronic check-ins
- telehealth
- so much more…
Healthcare organizations can also use technology like enterprise resource planning (ERP) software to automate administrative tasks and free up staff time for patient care and other important work.
However, even the best ERPs systems may be lacking when it comes to accounts payable and payment processing. In this article, we’ll examine the significant pain points in healthcare accounting, look at the digitization of accounting practices in healthcare, what types of healthcare companies use this technology, and the growing importance of automation for accounting in healthcare.
Who has time for accounting in healthcare?
Your best bet is to get on board with automation. To overcome the top challenges, you need a tailored AP solution.
What is Healthcare Accounting?
Healthcare accounting is essential for tracking and recording a facility’s revenue and cash flow. This critical process ensures a healthcare organization complies with its budget and can maintain accurate records with a clean audit trail.
Biggest Pain Points in Healthcare Accounting
Unlike other industries, there are a lot of spokes in the wheel for healthcare. It’s a spiderweb of interaction with various stakeholders, from providers to patients, pharmaceutical firms, insurance companies, and government agencies. Of course, all of this can complicate your ability to account for every penny. Especially when using a paper-based system that involves manual data entry.
Here are a few of the top pain points organizations face today in healthcare accounting:
Multiple Payers
Payments can get complicated in healthcare since patients aren’t the only ones paying for services. For example, take a single invoice for a visit to a specialist. Payment can come from:
- A patient co-pay
- Private insurance
- Work-sponsored insurance
- Government-backed program
- Supplemental insurance
This means a healthcare professional might end up billing multiple entities in a year. That’s a lot of work if you’re dealing with paper invoices.
Regulatory Compliance
While some industries may cater to one or two regulating bodies, the healthcare industry has many. Healthcare regulators can include:
- HIPAA (The Health Insurance Portability and Accountability Act) – This governs the privacy of patient data. It dictates how and when an insurance company can release health information.
- CHIP (The Children’s Health Insurance Program) – Provides coverage for children from low-income homes.
- ACA (The Affordable Care Act) – This makes it so providers cannot deny care based on a pre-existing condition. They also created a marketplace of subsidized health plans.
As you can see, complying with all of these regulatory agencies for recordkeeping and patient care can get confusing. Careful recordkeeping goes beyond satisfying government mandates. Personal health data must also be secured from theft and fraud. Healthcare firms must employ software that minimizes cyberattacks.
Companies that implement automation have better regulatory compliance. However, updating IT infrastructures is also causing many smaller healthcare companies to sell to larger firms. This is also creating a challenge to market equity, which only hurts the patients.
Unhealthy Consolidation
There has been an increasing number of mergers and acquisitions in the healthcare industry, and gone are the days of the small, rural doctor’s office. Instead, the trends favor major healthcare provider networks. As a result, a growing number of hospitals and smaller businesses are part of a system of facilities run by a central office.
This means many healthcare companies are more likely to deal with a third party for billing, rather than going directly to the source. Small doctor’s offices operating outside these networks face an uphill battle and will need every tool at their disposal to compete with corporate giants. This is where an AP automation solution would fill in the gaps. Reliable accounting data can help smaller healthcare companies make better capital investment decisions.
Why Make the Leap to Healthcare AP Automation?
It’s not so much a leap as a smart skip and a jump. Although many healthcare professionals are reluctant to change their current system, reticence can begin to affect their bottom line. Thus the value of new software must be quickly justified and proven to stakeholders that it can increase efficiency and customer satisfaction.
How can this be done? Here are a few of the main reasons why a healthcare accounting system responds well to digitization:
Greater Transparency
A patient-forward billing process focuses on price transparency. Invoices should be clear and easy to read, with separate line items per charge. Health insurance benefits should be listed and deducted from the total cost.
Global health portals give patients access to medical records, billing, and universal messaging. These systems can provide digital invoices, connecting each bill to the corresponding services provided.
A self-service supplier portal can also offer convenient links to payment that shouldn’t be limited to the patient. All payers can have access.
Faster Payments
Slow payments affect a healthcare organization of any size. The more time-consuming the payment process is for the AP department, the more likely you’ll have late payments. Especially if you’re making global partner payments. This can hurt vendor relationships and eliminates your chances of receiving early payment discounts.
AP automation for healthcare means faster invoice processing all around. Companies enjoy lower overall processing costs, immediate approval of invoices, and happier suppliers. Plus, there are no late payment fees to worry about. You can use healthcare payment technology to schedule electronic payments and even print paper checks.
Stronger Compliance
AP automation software is built for AP staff to oversee compliance and regulatory processes. In fact, compliance is often the most important success metric for finance teams in healthcare.
Automated AP processes feature cloud-based data capture in real-time for all transactions, including invoices, receipt reports, purchase orders, and other supporting documents. Instead of a paper-based process where staff has to hunt for missing paperwork, digital systems instantly connect documents to all users with access. They can also be paired with GL codes.
Fewer Human Errors
Accounts payable automation software keeps staff from double-entering data in the back-office system. This helps to avoid duplicate invoices and data-entry errors. Unfortunately, patient billing errors are no joke, especially with all the parties involved. One little mistake can set an AP department back months. The best way to avoid these mistakes is to sync healthcare accounts payable and accounts receivable software and integrate ERP systems.
Additional Benefits of Healthcare Accounts Payable Automation
- Lower cost per invoice
- Take advantage of early payment discounts
- AP knows exact liabilities at all times
- Enhance customer service
What Types of Healthcare Companies Can Use AP Automation?
Every type of business can benefit from healthcare industry solutions. Here are a few ways in which modern healthcare organizations are using AP automation right now:
Traditional Healthcare
Traditional healthcare companies are slower to adopt new technologies. These companies fall within several sectors (services, products, and finance) and treat patients with preventative, curative, palliative, and rehabilitative care. This includes:
- Medical centers
- Hospitals
- Pharma
- Doctor’s offices
- Medical devices
The pain points for these organizations will focus on basic manual tasks, like invoice approval or signing paper checks in person. Yet, 64% of physicians surveyed believe that healthcare technology and the IoT will lower the costs of operations and clinical inefficiencies by up to $100 billion annually.
AP automation will help traditional healthcare companies process invoices faster, automate approval, and eliminate the need for paper checks. As a result, the workload is significantly reduced, and doctors have more time to focus on providing quality care.
Telemed
The pandemic pushed the Telemed industry into another atmosphere. In 2020, the industry stood at approximately $384 billion, a 37% increase since 2011. The market is forecast to increase to over $600 million by 2024.
AP automation goes hand-in-hand with this digitized branch of healthcare. Tipalti specializes in multi-entity payment processing across the globe, providing consistent vendor onboarding with a self-service system. The platform allows you to focus on strategy rather than just making sure people are paid on time.
Wellness Companies
Wellness companies focus on bringing some type of health benefit to healthcare providers or consumers via a website or mobile app. In this way, they operate very similarly to software and tech companies. These companies have basic purchasing approvals backed by a combination of emails and spreadsheets.
Wellness companies can use AP automation as an entry point to other opportunities. Eliminate countless hours of manual work, process faster payments, and have every party onboard with self-service portals that ensure compliance.
How Tipalti Relieves AP Pain Points for Healthcare Organizations
Tipalti is designed to eliminate manual workload, improve AP processes, create strong compliance, and foster better patient care. Here are a few areas in which our solution excels:
Invoice Processing
Tipalti offers a completely integrated solution for invoice management and bill processing. Quickly capture supplier invoices from email and eliminate data entry with OCR and advanced data extraction. Route approvals intelligently, PO match efficiently, and schedule batch payments accurately, every time. Duplicate invoice protection will also immediately alert you when something looks too similar.
Vendor Onboarding
When it comes to effective supplier management, Tipalti has created a universal system. Onboard suppliers with a brandable portal that will:
- Fill out contact detail
- Verify bank data
- Collect and validate IRS and VAT tax IDs
- Empower supplier self-service
- Reduce payment errors
Tipalti enables complete supplier visibility, which reduces status inquiries and leads to happier vendors.
Multi-Entity Management
A healthcare organization can streamline AP and cross-border payments for its business units and global subsidiaries using the Tipalti system. Future-proof your international operations by providing end-to-end automation for multi-entity companies in a single instance. Tipalti helps finance teams manage growth and scale with compliance. This includes reporting to ERPs with multi-entity support like Sage Intacct, NetSuite, and OneWorld.
Compliance and Safety
The Tipalti Detectâ„ feature helps prevent fraud with detailed payee monitoring, which is ideal for global partner business models. Proactively mitigate risk exposure and maintain deep audit trails. The system tracks supplier payment operations to uncover patterns that help identify potential scammers. As a result, Detect has blocked over 7,400 fraudulent payees, saving customers over $4 million.
Integrate Your Healthcare ERP System with Tipalti
Tipalti integrates with some of the leading healthcare ERP systems for healthcare organizations of any size. This includes the following brands:
Growing and Large Enterprises
Small to Midsize Companies
Growing Importance of AP Automation in Healthcare
So, why is AP automation so important? The technology helps to lower overall costs by reducing errors, increasing efficiency, and requiring less overtime. It also lowers stress levels for all workers.
Automation will improve patient outcomes by ensuring processes run smoothly. There is better quality of care, less risk of non-compliance, and an improved patient experience.
As the healthcare industry faces growing challenges, like increasing patients and a dwindling workforce, automation bridges the gap for better productivity and a more satisfied team.
Healthcare Accounts Payable Automation FAQs
What back-office healthcare tasks can be automated?
A variety of AP tasks can benefit from automation, from the end-to-end approval process to PO-matching, vendor onboarding, compliance, payments, and reconciliation.
Can healthcare accounts payable be automated?
Yes. Healthcare accounts payable can be automated in many ways, including vendor payments, cross-border transactions, purchase order matching, invoice capture, supplier management, and more.
How do I get started using Tipalti for my AP automation needs?
If you’re ready to jump off with automating your healthcare payable process, Tipalti is an excellent place to land. Get started with a free demo here.
Conclusion
Healthcare is a complicated business because it deals with life and death. Although it may sound like a stretch to claim that accounting software can improve a patient’s experience, it really boils down to the amount of time saved. Every second counts on a doctor’s watch, and every minute saved, is a minute spared for someone’s care.
AP automation tools like Tipalti can free staff to focus on more important tasks and save the organization money over time to reinvest in health and wellness programs. It’s the type of technology the healthcare industry needs to future-proof for a growing population and leverage resources available now. Get started today!
