While First Data announced a major step towards a paperless transaction program, one of the biggest health debit card companies, MBI, has announced that it will expand into the Consumer Directed Healthcare software market.
MBI will provide all of the software designs that are required for health plans and TPAs to set up HSA-HRA-FSA combinations or HSAs alone.
MBI of Waltham MA also announced a new deal with Mellon Financial to supply MBI customers with CDH software with or without debit cards. The move puts MBI in direct competition with companies like CareGain, the biggest CDH software specialty firm, and Evolution Benefits which is also a major debit card company. Several smaller firms are also selling multi-option CDH products, and the move indicates the market is likely to expand rapidly.
First Data Moving Aggressively
A new pilot project was announced in New York by the biggest debit/credit card transaction processor in the U.S. First Data Corporation officials said they are preparing a program that will allow physicians in the New York metropolitan area to submit claims using debit cards only.
If the pilot program is successful, the company plans to expand it nationwide in 2006.
The announcement was made by company execs at the AHIP conference in New York
According to reports, the program can make it possible to reduce or eliminate paper claims, including EOBs, by 2007.
The program is an attractive way of gaining physician support for CDHC. Physician support is critical to the success of CDHC.
A patient would present the physician with a MasterCard or Visa card tied to a CDHC program. When the physician's office swipes the card, it goes directly to the health plan where two dozen plan-specific calculations are made instantaneously. The machine spits out a new wide receipt which is an instant EOB. There is no more need to send any further information to either the patient or the doctor.
According to some observers, this will enable health insurers to have the same debit card capabilities as banks, adding another cost savings and attribute to the card.
In recent months, experts have predicted that this one technical advance could change the whole debate over HSAs and make it much easier for both plans and physicians to deal with HSAs, HRAs, FSAs and existing benefits structure. Companies that design multi-account software products like MBI, CareGain, Evolution Health, and a half dozen others will be major beneficiaries of the changeover.
Major Player In The Game
First Data handles almost all credit card transactions in the U.S. today for everything from ATMs at 23 major banks to most online purchases, will charge tiny transaction fees that are dramatically-lower than most of today's vendors and be seen as miniscule compared with the administrative savings. The fees can also be split between physicians and their health plans, or paid willingly by health plans in many cases to secure physician loyalty and reduce paperwork.
Physician concern over the potential increase in patient bad debt under HSAs will be dramatically-reduced by the new IT advance if the project succeeds. Physician offices will know exactly how much a patient has left in their HSA before they leave the office, and the tie-in to credit cards will allow patients to finance their services instead incurring bad debt.
The holy grail of a paperless claims system is the ability of physician offices to receive an instant response from a health plan or TPA approving a claim and telling the nurse exactly how much the patient owes, with a receipt attached. First Data Corporation announced at the AHIP meeting that it is just over one year away from doing exactly that.