With some normalcy finally restored to the U.S. healthcare claims processing and provider payment system, there will now be plenty of debate about how to prevent similar catastrophic system failure in the future. Sen. Mark Warner (D-VA) has already introduced proposed legislation that would "require entities to meet minimum cybersecurity standards to be eligible for Medicare accelerated and advance payment programs if the reason for the need for such payments is due to a cybersecurity incident".
The biggest winners of this incident - other than information security vendors and consultants - are probably Availity and Waystar which saw volume increases and customer switches to their networks. Losers are the many providers who watched cash balances drop to zero in some cases, and of course UnitedHealth Group (NYSE: UNH) which acquired Change Healthcare in 2022. UNH was already facing a federal antitrust probe, and we would expect the heat to be turned up significantly as a result of the impossible to miss concentration of market share in UNH businesses.
For a detailed look at the details of the Change cyberattack and repercussions, we recommend checking out episodes 152 and 153 of the MoneyPot Podcast.
The rest of this newsletter touches on Apple Pay, including an insightful writeup from Karen Webster of PYMNTS, a summary of recent vendor partnerships, Epic River's offering for credit unions, new entrant Anatomy, and of course our regular dose of AI. Drop us any topics you'd like to see us cover at info@finmedpartners.com.
PATIENT PAYMENTS
Apple Pay's role in consumer payments continues to grow
We'll cover more about the increasing use of digital wallets in patient payments in a future issue. For now we thought it would be helpful to focus on Apple Pay, as Apple's digital wallet owns a commanding lead over other choices (e.g., Google Pay, Samsung Pay, Walmart Pay).
Karen Webster offered some thoughts in PYMNTS recently about the threat that digital wallets and especially Apple Pay are starting to pose to banks. She writes, "Apple Pay’s integration creates a sticky behavior that increases usage and can drive preference. Consumers don’t see their banks as being that aggregator, at least not now." Consumers/ patients may begin to have a payment relationship with their smartphone and forget about their bank brand. This has long-term implications for card issuers, both for loyalty and the ability to cross-sell other financial products.
The card issuers also have to contend with the toll that Apple charges to run payments through its wallet. According to the antitrust lawsuit filed by President Biden's Justice Department, Apple takes 0.15% for every charge run through Apple Pay. Some may find it hard to believe that banks are actually facing cost pressure from Apple, but the DOJ asserts in its lawsuit that "Apple’s fees are a significant expense for issuing banks and cut into funding for features and benefits that banks might otherwise offer smartphone users."
Roundup of recent healthcare payments partnerships
The movement of money in healthcare requires many players to work with each other, including some that compete in certain areas. Clearinghouses, payment gateways/ processors/ acquirers, patient engagement platforms, lending solutions, letter shops, virtual cards, and tokenization are all components that integrate in different ways to financial software, practice management systems, front desk staff, and call centers.
The following deals connecting different parts of the healthcare payments ecosystem were publicized recently:
Zelis and Availity Announce Strategic Alliance (read more)
eIVF and Rectangle Health Partner to Streamline Payments (read more)
PatientNow and CareCredit Expand Partnership (read more)
Waystar and MEDITECH Announce Partnership (read more)
RevSpring Announces Financing Solution with iVitaFi (read more)
TrustCommerce now Integrated with Practice Fusion (read more)
Raintree Adds Availity as Strategic Partner (read more)
CAPITAL MARKETS
REPAY in play?
REPAY (NASDAQ: RPAY), an integrated payment processing solution serving multiple verticals including healthcare, may be looking to go private. According to four banking sources which spoke to a writer at FORTUNE in early March, REPAY has reached out to PE firms about selling the company. REPAY acquired payment processor BillingTree in 2021 for $503 million. BillingTree worked with the Healthcare, Credit Union, Accounts Receivable Management (ARM), and Energy industries. It served healthcare clients through its CareView payments and software platform, which it described as "streamlining patient communication, promoting patient engagement, and allowing customers to accept all forms of payment".
Epic River, a Fort Collins, CO-based fintech, offers patient financing as part of its lending-as-a-service platform. Earlier this month, the company announced a new digital lending platform specifically tailored for credit unions. Epic River's goal is to enable credit unions to grow loan volume by working with local healthcare providers. According to one credit union executive who has utilized the new offering, "Our loan portfolio has skyrocketed, while our hospital partner has been able to improve cash flow and provide affordable patient payment options. It has truly been a win-win-win for our credit union, the healthcare provider and patients they serve."
Anatomy aims to automate financial workflows for providers
Source: Anatomy.com
At Fintech Meetup last month we learned of some interesting new companies. One is called Anatomy Financial, which is based in San Francisco and describes itself as providing a "suite of financial automation solutions to support any healthcare organization that bills insurance, including medical or dental practices, MSOs/DSOs, billing/revenue cycle management companies, and digital health providers." (Curious what the founders paid to buy the domain anatomy.com!)
Anatomy's endgame is not entirely clear, since so far it would appear to be offering the same type of automated revenue cycle services as a company such as athenahealth. Since its founding 25 years ago, athenahealth has differentiated itself by perfecting the automation of mundane workflows and paper-based processes so that smaller medical groups could gain access to industrial scale efficiencies. athena's offerings, while leading edge and a great value for practices able to take full advantage of their power, are considered pricey.
Perhaps Anatomy will target smaller provider organizations with a lower-priced solution that is "unbundled" and doesn't require purchase of an entire cloud-based practice management/ billing system such as athenaCollector.
HIMSS 2024 - All AI all the time. Plus Epic's approach to AI.
We did not attend HIMSS this year, so we had to hear about it from others. We heard the top three themes were #1 AI, #2 AI and #3 AI. Healthcare Dive Senior Reporter Rebecca Pifer wrote afterwards that she had "never attended a conference as dominated by one single theme as HIMSS was by artificial intelligence." Her summary after the show runs through some key takeaways regarding AI. One observation we have about AI so far - especially Gen AI - is that except for potential operational efficiencies, nothing concrete is emerging yet for healthcare payments.
This applies to news trickling out of Verona, WI as it relates to Epic's application of AI to its platform. Mostly, which makes sense, the AI projects are clinically oriented. In October 2023, Epic released videos which described its AI-related development efforts. Becker's Health IT wrote at the time that Epic is working on 60+ applications including Gen AI-based capabilities in the EHR to draft patient portal messages, write nurse handoffs, and create patient summaries. Other projects include denial and appeal letters, radiology follow-ups, a billing chatbot, a coding assistant, clinical documentation integrity queries and suggestions, a level-of-service calculator, a phenotype assistant, a clinical trial chatbot and matching, ambient suggestions, chart abstraction, emergency department discharges, research summaries, and a generative AI sandbox.
We'll keep tabs on the payments related items, especially patient portal messages and billing chatbots. Maybe MyChart could be enlisted via AI to help send accurate and timely cost estimates to patients??
FinMed Partners is a management consulting and advisory business focusing at the intersection of payments/ fintech and healthcare. Our founders have developed deep expertise from decades of experience with health IT companies, healthcare providers and many players within the payments ecosystem. Investors, boards and executive teams work with us to maximize business value through strategic input and tactical execution.
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