Innovations: Online payment portal eases hospital collections

It's not difficult to find patients who are dissatisfied with the healthcare billing process. More than half of insured patients are boggled by their bills, and almost two-thirds are surprised by their out-of-pocket costs, according to a 2014 survey from TransUnion Healthcare.

Kent Ivanoff knows the problem well. He used to work at credit and banking giant Capital One and created several consumer finance startups that were acquired by Capital One. He saw people struggle with mounds of medical paperwork and benefit statements that looked like hieroglyphics. Patients often battle insurers and providers, uncertain about the details behind their medical expenses. Patient-friendly billing practices have long been discussed by groups such as the Healthcare Financial Management Association, but best practices are far from widespread.

Ivanoff wanted to help resolve these conflicts because, he says, most patients want to pay their bills. But in healthcare, they frequently don't know what they owe. “It's a broken, ineffective billing process,” he said.

In 2010, he co-founded Boise, Idaho-based technology company iVinci Health. The firm's main product is VisitPay, an online portal that helps patients manage, pay and finance their healthcare bills, all in one spot.

Ivanoff, iVinci's CEO, developed the technology after a year managing the revenue-cycle process at St. Luke's Health System in Boise. Ivanoff told the system's executives that if they wanted to reduce bad debt and handle the rising tide of high-deductible plans, they had to understand patients' payment patterns.

“He understood that the credit space in healthcare was not managed well and not patient-friendly,” said Jeff Taylor, chief financial officer at St. Luke's, which was iVinci's first client. “Oftentimes, patients don't pay the bill because they are so confused about it.”

VisitPay is different from other hospital-patient billing portals and financial-assistance programs because of its transparency and flexibility, Ivanoff said. Patients sign up for the billing platform with a user name and password. Balances show what the insurer has paid, what the patient has paid and what amount is still due. Patients can link their bank accounts or health-savings accounts to the application and set up automatic payments.

Working through VisitPay is similar to managing student loans or utility bills. But Ivanoff said what separates the portal from others is its branding with the provider's name and logo. There's no perception that an outside collection agency will be chasing after payments. “As far as the patient is concerned, they are dealing with the health system,” Ivanoff said.

Further, health systems can create different financing plans for each patient. For example, people can receive a discount if they pay in full. Or, providers can offer a 12-month, 24-month or longer-term payment option.

From a back-end perspective, the VisitPay platform is fully automated with the hospital's legacy billing systems. It doesn't matter if the organization uses Epic Systems, Cerner Corp. or another revenue-cycle technology firm because they all work, Ivanoff said.

Taylor said he's already seen results. Roughly 70% of patients have rated their billing experience with St. Luke's as good or excellent since VisitPay's adoption, compared with 35% before the portal's availability. There was also a 50% improvement in payment rates since the portal went live, he said.

The growth of health plans with high deductibles and cost-sharing made St. Luke's look more closely at this technology, Taylor said. St. Luke's predicts 20% of its future revenue will come directly from patients.

Several other large health systems have signed on: Intermountain Healthcare in Salt Lake City, Inova Health System in Falls Church, Va., and a health system in the Pacific Northwest, which Ivanoff said he could not yet name, are all using VisitPay.

iVinci raised $5 million this past September—a round of funding that was led by its four client health systems. Ivanoff hopes to sign up five to 10 more systems this year and said his firm is getting “fantastic traction” in the marketplace as more systems want to reduce their bad debt.

“Payers are shifting the burden to patients,” he said. “I don't think that's going to abate.”