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Smart Payment Options

Card payments promise to increase consumer convenience and streamline transaction processing, but for insurers, they represent a new business - with new technology challenges.

Executive Intelligence Series

The Experts

Tom Richards Vice President, Consumer Driven Health Cigna (Philadelphia) Donald Sacco Chief Strategy Officer MyHealthBank (Portland, Ore.) Paul Roma Partner, Healthcare Industry Practice DiamondCluster International (Chicago)

Q: What are the benefits of cards to the health insurance payment process? Where are the opportunities for carriers?

A: Tom Richards, Cigna: Cards are really a convenience mechanism for consumers, particularly for new types of consumer-driven health plans like the health savings account. The cards are particularly attractive for payment of expenses outside of what the normal medical plan might cover. An example may be contact lenses, which most medical plans won't cover. Cards are particularly important on something like a health savings account that reimburses for a wide range of medical expenses beyond what a traditional health insurance plan might pay for, including such things as over-the-counter drugs, contact lenses and dental work that the medical plan wouldn't normally cover.

A: Donald Sacco, MyHealthBank: Debit cards have most typically been used as point-of-service tools by health insurers for use in their consumer-directed health plans (CDHPs). Typically, they are tied to health reimbursement accounts, health-related expenses through flexible spending accounts and in conjunction with the new health savings accounts. The cards offer real-time access to eligibility at the point of service and efficient claims management and adjudication in conjunction with consumer-directed health plans.

A: Paul Roma, DiamondCluster International: Payment cards can improve the efficiency of enrollment, identification and customer service processes, while increasing the success rate of first-time adjudication. Providers will get reimbursed more quickly and accurately due to real-time availability of eligibility and explanation of payments.

Compared to Europe, the U.S. healthcare industry has been slower to implement payment cards widely, primarily because the offerings that will drive adoption have been limited. That trend may soon change as healthcare consumerism becomes more prevalent. Tax-free options, such as the Health Savings Account (HSA), will increase the use of health payment cards for deductibles, coinsurance and other qualified healthcare expenses.

Q: What technology issues do insurers need to address to effectively implement the use of cards for health insurance payments?

Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio

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