The US healthcare payment system processes $1.9 trillion a year, but despite the industry momentum toward completely paperless claims and payments, 80-90% of medical reimbursements are still paid by check.1 For now, most practices, clinics and hospitals still have to deal with getting paper – and a lot of it – as part of their revenue cycle.

Some banks offer an alternative to the inefficient, costly and manual processing of paper-based receivables: a digital lockbox. This service combines traditional lockbox mail processing with the latest digital document imaging to help providers deal with incoming paper and accelerate their cash flow. Here’s how a digital lockbox works:

1. Collections mail is received, opened & sorted by the digital lockbox vendor.	2. Checks are totaled & deposited.	3. Documents – checks, EOBs & other – are scanned, indexed & stored online.	4. Electronic copies of documents accessed online by staff.

Healthcare providers who use a digital lockbox essentially outsource the handling of their mail and depositing of remittances to the lockbox service provider. As a result, they report a range of benefits:

• Improved cash flow. The most significant benefit of the service is the elimination of “desktop” float. A digital lockbox vendor usually deposits your money faster than you can, often the same day checks are received. No staff time is spent preparing deposits and no one has to find time to run the deposit to the bank.
• Back-office productivity. Paper handling is virtually eliminated because of the tools available to work with the electronic document images:
  • Search: powerful search tools let staff easily locate documents online by searching for data on the documents such as date, amount, name, payer or potentially any available field of information on the original documents.
  • Annotations: a set of tools for working with the electronic document images. Annotation tools can dramatically streamline the process of working secondary or denied claim issues. Without changing the stored document, you have the ability to make notes, apply “stamps” and conceal other patient data for HIPAA compliancy, as is often required with multi-patient EOBs. Compare this to the process of searching files, manually copying EOBs then using a black magic marker to blackout data before you can share the document with a third party. Annotation tools enable tremendous efficiency gains in this process.
• Business continuity. Payments are deposited in your account even in the event of a disaster. Critical collections documents are also backed up and available via the internet. A change of address should not threaten your cash flow while you wait for payers to find you at your new location.
• Risk of fraud minimized. Using a digital lockbox creates a beneficial separation of duties. Office staff no longer handle insurance payments, and a digital lockbox provides an audit trail.
• Reduced paper storage. With collections documents stored online, there is no need to store the paper copies. Use the free space to generate more revenue.
• Improved patient service. Patient inquiries may be answered during initial contact because staff can quickly find the needed reference documents online. No more call backs, telephone tag and spending time in the storage room looking for a copy of a filed, paper EOB.

Most digital lockbox vendors provide this solution as a service, which means you don’t have to install new scanners or special software to use it. This also means that you can activate this service and start getting the benefits in a very short period of time without having to be a computer systems guru. Some thoughts and characteristics you should look for in an ideal digital lockbox vendor:

• Experience. In addition to the ability to process high volumes of work, a vendor that has a deep understanding of the medical practice industry will have a product that caters to your specific set of needs.
• Processing:
  • Ask about the processing error rate and resolution process.
  • The indexing of appropriate data fields on your documents is what makes them searchable. The ability to customize the fields that are indexed will increase the significance of this tool for you.
  • Having access to your documents online is a big part of the digital lockbox value proposition. Understand how long the vendor will keep your documents online before archiving them.
  • Since your documents will be stored on the vendor’s servers, make sure they have adequate backup procedures for their digital lockbox service and that they test them regularly.
• Access to cash. Understand how long it takes for your checks to be retrieved and deposited. The best vendors do it sameday – one of the core benefits of a digital lockbox service.

A digital lockbox works for any healthcare provider, regardless of size. If you are looking for ways to save time and money in processing payments, consider the addition of a digital lockbox.