Meeting AP Challenges in Healthcare
Accounts payable is subject to a lot of strange rules and regulations. Few industries feel this pain as well as businesses in healthcare. AP in healthcare faces a series of unique set of challenges because of information laws like HIPAA and coding systems like ICD-10. Paperwork and payments come from a wide variety of different insurance companies, as well as the federal government for Medicare and Medicaid reimbursements. How can healthcare companies improve their turnaround time and reduce processing costs while still complying with all the necessary regulations?
Holistic Project Scope: To truly solve the problems in Accounts Payable, you have to look beyond it. Just analyzing your AP processes leaves out several key areas that can cause major dysfunction–Intake, Payment, and Purchasing. In a healthcare setting, it can be difficult to utilize purchase orders effectively but many companies have been able to automate some of their purchasing processes. Having an automated intake process can greatly improve your turnaround times for invoice processing. If you can’t automate, consider outsourcing this process to a third party who can make use of a larger scanning space and better equipment to do the job more efficiently. Payment automation has the potential to save hours off of your AP process every day. Look under all the rocks and find some of the hidden information that’s costing you money.
Onboarding Electronic Receipt: Even with the restrictions of HIPAA, there are lots of ways you can bring invoices with sensitive information in without using paper. Many healthcare companies report receiving half of their volume or more in paper invoices. Much of this could be automated through a standardized EDI process that goes through a secure FTP server. In addition, incorporating secure email servers will allow your suppliers to send invoices through their email account instead! Any amount of digital intake has the capacity to improve your AP department’s turnaround time while reducing cost quickly.
Simplify and Automate Routing: One of the biggest problems healthcare companies face are long AP cycles that keep their cash flow off balance. Some of this approval is necessary but systems can easily become overly complex when some people just need to be made aware of an invoice’s receipt and have no real approval authority. Where possible, cut your approval chains down. Work with suppliers to have identifying information, like department codes or people’s names, printed on their invoices so that invoices can find their home more easily. ERP software can struggle with the complexity of routing needed but there are other AP automation software packages that allow you to construct varying routes and authority delegation so you can accelerate the process.
Although healthcare is a special industry, you have access to the tools you need to help your company’s AP department succeed. You may decide that working with a third party provider is going to be the best solution for you but be sure to do your research. Not all providers are prepared to handle these requirements. Finding the right partner is critical to your ongoing improvement.