Creditron and MediStreams are teaming to automate payments processing for small to mid-sized health care practices, which typically manage transactions and consumer records manually.

"There are some problems in health care payments that are not being addressed," says Wally Vogel, CEO of the Toronto-based Creditron. Many small- and medium-sized health care providers view automated systems as too complex, he says.

Creditron will combine its virtual lockbox platform with the Roswell, Ga.-based MediStreams' health care payment processing technology in an effort to reach that segment, as well as larger providers that are still paper-based.

Providers would use the integrated system to scan explanation of benefits (EOB) documents and other papers, converting the forms to a standard ANSI 835 format for posting and electronic transfer. Forms such as Electronic Remittance Advices (ERAs) are stored online in a "plain English" format and can be archived for up to ten years. The product also includes a portal that stores patient payment information, payment trends, receivables information, check processing and electronic deposits.

There is a monthly fee for the service, typically about $50 per month, which includes the use of the cloud for conversion for ANSI 835 and Check 21 electronic check deposit. There is also a transaction fee that varies based on volume.

The companies hope to attract practices with lower claims volumes that wish to automate processing without using a traditional, more manual third-party lockbox provider. Creditron and MediStreams will also sell to banks looking to complement their traditional lockbox services with an automated alternative. 

"Scalability is one of the disadvantages of a traditional lockbox," Vogel says, contending that as a "cloud" solution, Creditron and MediStreams provide health care payments automation at a cost appropriate to a provider's volume. The two companies manage the image conversions and storage remotely from the providers, which use an EOB document compatible scanner that typically costs less than $400, Vogel says.

"This new offering is more of a 'virtual lockbox,' so the set up costs are lower and there is more visibility into the transactions and data," Vogel says.

A number of technology companies are targeting the health care payments space because of the general growth of consumer-direct plans and the Affordable Care Act, which includes mandates to increase transaction and data automation in the health care industry.

PayNearMe, which provides a payment slip with a printed bar code that consumers bring to partner merchants to complete payments, just received a $20 million investment that it will partly use to pursue health care payments.

WEX and Alegeus Technologies are partnering to build a virtual card to automate health care payments, PaySpan offers a bundled card that combines the different cards used in health care, and PayZang is pursing mobile health care payments.

Health care is a complicated market that has space for payments technology providers, says Bernard Golden, a cloud computing consultant.

"As illustrated, building a software system that integrates with the many different providers and suppliers that make up our health care system is extremely complex and requires significant technical capability," Golden says. "An integration system needs to be sponsored by an organization that is technically sophisticated and can afford significant investment."

Smaller providers are particularly challenged, Golden says.

"Smaller providers … will be better served relying on a third party that provides the software systems and allows the smaller provider to focus on its core capability," he says.

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