Health Care Payments Make Way for Mobile

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The Affordable Care Act's individual mandate will hasten individual responsibility for health care procurement and payments, making mobile apps increasingly important.

"In this environment, people are going to want fast and more access to data, such as what funds are available, their balance and what payments they owe. It's the sort of thing people didn't think too much about years ago," says Tom Torre, CEO of Alegeus Technologies, company that provides health care debit card payments and an administrative platform for FSAs, HSAs and other tax-related benefits accounts, processing about $18 billion in health care payments annually. "Having all of that information about an account on a mobile device is really valuable."

About 20 new clients have signed up for Alegeus' mobile app over the past three months, Torre says. The app provides account access on iOS or Android devices. Consumers can view plan details, review transactions, upload receipts and submit claims.

Health care payments lag other types of payments in technology due to the complexity of the transactions—most payments are still executed by automated clearing house transfers and paper checks, so even debit cards are still emerging in health care, Torre says.

"[The latest] version of our mobile app has the ability to facilitate mobile payments, but right now the infrastructure in the market is nascent and there is the struggle between [Near Field Communication chips] and QR codes," Torre says, adding Alegeus is flexible about its support of mobile payments models. "Health care payments will follow the retail market so you have to be ready for that."

American Benefits Group, a third-party administrator which provides an integrated platform for consumer-direct health care accounts, COBRA and direct billing, recently licensed Alegeus' mobile technology to add another channel to access account information.

"The mobile app provides information regardless of your time or location. The two things that people are most attached to include their health and wealth, and that's where we're seeing interest in mobile technology to manage health care," says Bob Cummings, a managing principal for American Benefits Group.

A number of health care payment providers are developing new Web and mobile technology, mostly to reduce paper, ease payments and provide access to multiple health care accounts via a single card.

Alegeus, for example, recently partnered with corporate payments provider Wex to develop a virtual card for health care claims. Among other companies, health care payment provider PaySpan this spring released the United Benefits Card, which replaces member ID cards, paper checks and other cards used to access and pay for health care. Simplee, a medical bill tracking company, has built personal financial tools for health care payments.

And PayZang, a merchant services provider, has developed health care payments software that establishes virtual terminals on computers for processing mobile debit and credit card payments.

There's an existing base of mobile technology in the health insurance industry that can be used as a springboard to add mobile payments. UnitedHealth, Humana, Cigna, Blue Cross and Blue Shield and Aetna have mobile apps that provide basic account information, HSA management, and GPS-driven location service, according to Gartner.

Technology that enables mobile transactions is a hot topic of discussion, given the growth of individual enrollment in health care plans driven by health care reform and general market trends, says Christina Lucero, a principal research analyst for health care at Gartner.

"The mobile payment piece is really new and will be the component that the health care market will latch onto because of the individual enrollment plans. The consumers will want to make payments for the day-to-day items and will want to make premium payments as well," she says, adding the Affordable Care Act is just one factor that will contribute to the adoption of mobile payments. "There are [about 24 million] people that won't qualify for the law's health care exchanges, and they will need to buy plans and make payments."

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