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A Comprehensive Remittance Platform: Why It’s Essential

A nexus of industry forces is keeping financial pressures on hospitals and health systems at elevated levels. This situation is driving continual examination of all aspects of revenue cycle management (RCM) in a quest for substantial savings and efficiencies. One key opportunity is improved receivables management, particularly remittance and lockbox services. This article explores current trends and challenges in remittance processing and details a comprehensive platform approach to success.

Trends Impacting the Revenue Cycle

Four of the most prominent trends influencing organizations’ financial health are:

  • Challenges to Business Continuity. The coronavirus pandemic significantly impacted business continuity across all sectors of the economy, but particularly healthcare. Many employees are working remotely, requiring secure access to critical systems to keep processes moving forward. Additionally, the virus triggered short-staffing situations as nurses, doctors and other employees miss work with virus-related illnesses. In both cases, the virus as exacerbated technology and staffing challenges which already existed across the industry.
  • Major Reimbursement Changes. As a recent trends report noted, analysts expect to see continued pressure on margins resulting from the shift to value-based/risk-based contracts.1 The reduction in steadier fee-for-service income is occurring alongside slowing rates of increase in payer reimbursements and price competition from new retail competitors. Together these forces make protecting margins imperative.
  • Rising Consumerism. The “patient as payer” is another formidable force affecting receivables administration. As they face increasing financial obligation from high-deductible plans and rising insurance premiums, patients are bringing a more attentive, consumerist perspective to their care. Organizations are encountering heightened self-pay collection risks, the need to offer options such as patient financing and demands to deliver a positive patient financial experience.
  • Organizational Complexity. The single independent hospital model is fading. Industry economics have driven consolidation and partnerships to create diversified health systems at scale. Moreover, population health management is moving hospital care “outside the four walls” and into varied community relationships.

Navigating these trends is a multifaceted endeavor. “The business side of healthcare must strive to eke every possible penny out of its revenue streams,” observed Susan Morse in a recent article. She also noted increasing top line attention through avoiding revenue leakage, growing patient volume and diversifying the revenue stream.2 The magnitude of these tasks means that incremental improvements in receivables management are not enough. Organizations need to optimize their processes in this environment.

Current Remittance Management Challenges

Despite progress, remittance management remains plagued by issues that slow the path to optimization. Understanding these problems thoroughly is a necessary prelude to developing the right solutions. The challenge is complicated and amplified by the sheer multiplicity of variables involved (Figure 1):

Graphic depicting the four areas that create complexity in remittance management

  • Multiple inputs/payment modes – paper/mail (checks and EOBs), electronic (ACH and 835), online portals, point of service
  • Diverse departments involved
  • Various workflows and transaction types
  • Multiple accounting/billing systems

Change efforts must be pursued across all these variables to yield the optimal result. Specific roadblocks include:

Labor-intensive process

The overall remittance process is still characterized by considerable manual processing. Industry estimates suggest that paper-based remittances account for upwards of half the volume in the average community hospital. Manual reconciliation and reporting create inefficiencies, inconsistent application of policies and potential for errors. The manual process is also contingent on collaboration across departments. For example, the billing team relies on the finance team for accurate bank information needed to post payments in the AR system.

Disparate systems in use

Organizations often function with multiple financial systems due to legacy systems and mergers that combine disparate solutions. Frequently, the systems are not fully integrated. With information siloed and sometimes inaccessible, staff are forced to split aggregated remittances manually, posting each to the appropriate system and working across the various systems to perform reconciliation, adding to the quality and speed of posting. Technology uptake has grown, but a recent survey found that 26% of hospitals still lack “a viable RCM solution” suggesting need for greater “RCM modernization.”3

High cost-to-collect

The twin factors of high labor-intensity and incomplete automation prompt productivity drain. High direct costs are incurred, with added soft costs that include inability to dedicate staff to priority or new projects.

Inconsistent insurance reimbursements

Additional cost burdens originate from inconsistencies in the insurance remittance stream. A common example involves payer credit cards. Credit card payments add labor costs on top of the cards’ processing and clearing house fees, which essentially result in hospitals paying in order to get paid. RCM staff can spend hours each week working with insurance companies to covert card payments to less costly ACH payments. Even if ACH payments are set up, staff will find that insurance companies will unexpectedly revert to credit card payments.

Information gaps

The current state of receivables management leaves considerable gaps in breadth and consistency of data acquisition along with difficulty obtaining unified data views. Remittance management optimization is hindered, and organizations are potentially disadvantaged relative to emerging data-savvy retail competition.

What’s Required: A Comprehensive Platform

Partial or limited solutions are inadequate to address the complex matrix of issues described here. Automation that brings immediate benefits and long-term value requires more than an app or a point solution. Even the EHR has not proven sufficient. Observers cite “a lack of technology revenue cycle directors want and need from their EHR.”4

The right solution calls for a comprehensive remittance and payment platform. CommerceHealthcare® recommends organizations seek a blend of requirements from the classic platform framework of People, Process and Technology.


The foundation is a unified system that automates all remittance types, from checks to paper EOBs to ERAs/ EFTs. Integrated with patient financial and document management systems, the technology should create efficient, paperless workflows through automatic payment posting, unbundling aggregated remittances and directing each to the appropriate financial system. It should provide full reconciliation functionality as well as reporting and audit trail tools.

Additionally, the technology should utilize internet-based payment processing systems, enabling staff to work remotely and keep key financial operations moving forward. During the coronavirus pandemic, healthcare providers who leveraged internet-based platforms fared better than those with processes that are server based, or dependent on a localized network.5 Providers at the forefront of technology adoption, those that are utilizing automation and internet-based payment processing, are experiencing fewer challenges and less disruption to their revenue cycle operations.

Three additional platform requirements are vital:

  • Scalability. Look for evidence that 95% or more of transactions are reliably processed electronically to avoid “automation leakage.”
  • Ease of implementation. With IT departments stretched thin and experiencing EHR upgrade fatigue, hospitals want solutions that have no code to load/test, require minimal internal FTEs and are fully maintained by the vendor.
  • Security. A key feature is role-based access; providing RCM staff visibility to bank information and funds without full access to the system. Enabling the revenue cycle and finance teams to collaborate while reducing manual processes.



The technology should underpin a consistent exception-based workflow that minimizes manual interventions, checks and workarounds. Review should only be directed to those remittances truly needing assessment, ensuring maximum productivity and smooth processing. The process should also be scalable, fostering organizational growth.


The automation behind a platform is critical, but one area often overlooked by providers is the level of support provided in conjunction with the technology. There are three additional areas providers should consider when evaluating a remittance platform.

  • Healthcare experience. Many firms in the remittance management space serve multiple markets. Consequently, staff may not possess the healthcare experience that builds understanding of the industry’s unique revenue cycle workflow requirements and how technology must both respect an organization’s existing process while also improving it.
  • Financial expertise. Banking experience backed by access to an array of financial services is a major plus for a comprehensive remittance platform. For instance, an organization may find opportunities to enhance its broader receivables management or leverage a patient financing program to improve its self-pay segment. A financially sound banking partner can quickly offer tailored choices.
  • Ability to add value. The platform’s support team should become an extension of your internal team, fostering optimization in two ways:
    • Surveillance. Patient and payer changes, along with shifting regulatory requirements, make it imperative to have knowledgeable partners monitoring the process and able to “see ahead” to recommend enhancements that fit changing scenarios.
    • Change management. Beyond recommendations, experienced partners can advocate effectively for change with staff as well as help implement – and maintain – workflow and system improvements.


Comprehensive Platform, Comprehensive Gains

The benefits of a truly comprehensive remittance management platform are far-reaching:

  • Significantly reduced cost to collect through automation.
  • Greater accountability. For example, remittance staff may bypass functions such as prebalancing and matching, and providing cleaner activity to Finance. A solid platform provides full workflow visibility to determine where such inefficiencies arise.
  • Sustainable gains. Consistent execution of exception-based workflow maintains automation and consolidates benefits over time, while surveillance to anticipate changes helps organizations “future-proof” their platforms.
  • Increased staff satisfaction. Internet-based payment processing systems, which provide remote access for employees, can positively impact employee satisfaction and engagement. Healthcare providers can also leverage it as a strong recruitment tool.


There is no need to settle for partial solutions. The platform approach described here is proven and brings the right mix of people, process and technology to achieve optimal results. The result is a path that is both desirable and urgent, helping healthcare providers alleviate today’s financial pressures.


  1. K. Halloran, “Market Outlook: Trends and Longer-Term Perspective,” HFMA Annual Conference presentation, 2019.
  2. S. Morse, “Hospital Revenue Cycle: Ready for Change But Facing Big Challenges,” Healthcare Finance News, April 1, 2019.
  3. M. Haglund, “Revenue Cycle Management in the Value-Based Era: It’s a Whole New Ball Game,” Healthcare Innovation, September/October 2019.
  4. S. Morse, “Hospital Revenue Cycle: Ready for Change But Facing Big Challenges,” Healthcare Finance News, April 1, 2019.
  5. A. Pecci, “The Revenue Cycle and COVID-19: 3 Issues, 3 Responses,” HealthLeaders, March 26, 2020.