From the outside, the average billing cycle for a medical appointment looks pretty simple: Go to the doctor, pay for the visit (with your own money or insurance), repeat as necessary.

For healthcare providers, though, that couldn’t be further from the truth. The reality is more like this:

• Identify the patient
• Pre-register the patient
• Patient arrives, is treated
• Patient pays, or, in most cases, insurance claim is filed
• Claim is processed
• Insurance company may follow up to dispute claim, or deny coverage
• Office follows up with patient to receive disputed payment
• Payment may go into debt collection
• Account closed.

From a two-step process to a nine-step process, in the blink of an eye. The thing is, providers only really care about one thing: getting paid. And that’s where business process outsourcing can come in. Providers receive payments and explanations of benefits in a variety of forms, forms that vary from payer to payer. Aetna may have one form, while Medicaid and Medicare may have others. The manual matching of these forms, and syncing them to a specific provider’s system can take weeks, delaying payment along the way. According to industry data, 2.5 billion commercial payer healthcare remittances are handled manually every year.

It’s that number — 2.5 billion — that opens the door for business process outsourcing. BPO companies can match the claims, payments, and explanations of benefits instantly, whether they’re paper or electronic. After that, they convert the EOBs to a standardized form, eliminating any missing features. The electronic files are then rerouted to the provider, providing a real-time boost in revenue, and eliminating costly labor expenses associated with payment processing. According to the Medical Group Management Association, the cost of billing operations is 18 to 20 percent of a provider’s overhead, and each claim clips $5 to $7 from them.

Then take into account the interest that could be earned each day with speedier billing:

Average check size                        Value, per day, of lost interest revenue

$36                                                     $0.0059

$360                                                   $0.059

$3,600                                                $0.59

$36,000                                              $5.90

$360,000                                            $59.00

The federal government is incentivizing providers to switch to electronic records and billing; still many companies don’t think it’s worth it. But consider this: Providers can take weeks to process claims and remittances. A BPO company takes 24 hours. The difference is tens of thousands, hundreds of thousands, or millions of dollars each year in lost revenue. It’s not worth it to stay stuck in the paper age.

Suffering is something with which many accounts payable professionals — groaning under the burden of error-prone, manual processes — are all too familiar. Nirvana, in the form of AP automation and outsourced processing, awaits.

The definition of insanity is doing something the same way, over and over, expecting different results. Many AP departments are stuck in decades-old, inefficient methods; a majority of companies still receive and process more than 90 percent of their invoices and payments via paper, according to a 2013 PayStream Advisors survey. Most AP departments continue to receive the bulk of their invoices through conventional snail mail, in email attachments, and sometimes even by fax. They pay the majority of their vendors by paper check. A number of companies are moving toward automated processes, but only a small percentage consider themselves fully automated.

It’s clear that, if true automation nirvana is to be obtained, longstanding hurdles first must be removed.

Key obstacles to more efficient, automated AP processes include a lack of company resources resulting from inadequate support at the top. AP budgets for many companies have remained flat year-over-year. Without a top executive advocating for change, budget requests may hit a wall of C-suite resistance. To bring down such barriers, AP professionals need to educate their company’s leaders, through consulting services, about the benefits – both operational and strategic – of automation, and consider leveraging the time and talent of outside solutions. In some cases, savings generated through automation and outsourcing can be realized in the first year of operation.

Another obstacle is the reluctance of suppliers to adopt electronic payments. Topline AP automation providers dedicate recruitment teams to show suppliers how an automated system can help them get paid sooner and deal with discrepancies more easily. Outsourcing the recruitment process allows experts to handle supplier signups and permits AP departments to concentrate on the tasks they do best.

When considering an AP automation solution, it is important to envision and create a strategy that fits immediate needs but also remains flexible to meet future goals. Keeping the end in mind, prioritize the steps you’ll need to take and understand how each fits into your organization’s evolving structure. Setting SMART goals and effectively communicating to all the important stakeholders during the process can lead to:

• Efficient, effective and accurate invoice processing
• Elimination of manual entry
• Increased productivity
• Improved ROI

The right combination of a software solution and outsourcing can provide significant cost savings, more accurate data in the system and an accelerated payment cycle. Automation pioneers that implemented similar solutions report smoother workflow and a less stressful work environment where staff time is spent on activities that provide value to the company instead of on tedious, repetitive tasks. Click here for AP automation case studies and more information.

As President Barack Obama’s Affordable Care Act starts to take hold nationwide, the opportunities are beginning to come into view. And aside from patient care, one of the biggest changes may be a boon to the business process outsourcing world: There will be paper. Lots of paper.

The United States spends more on healthcare — both as a proportion of gross domestic product and on a per-capita basis — than any other nation in the world. Current estimates put U.S. healthcare spending at approximately 15 percent of GDP, and the health share of GDP is expected to continue that upward trend, reaching 20 percent of GDP by 2016.

Worldwide, the global healthcare BPO market is growing 21 percent year over year; provider-specific BPO is growing at an astonishing 32 percent rate. All of those numbers can only grow with the ACA.

According to the Society of Actuaries, insurance companies will pay an average of 32 percent more medical claims due to the ACA, and premiums are expected to rise as well. Claims costs will also rise because insurers will no longer be allowed to turn down patients with pre-existing conditions. More patients, more paperwork, more business process outsourcing.

“I think it’s very likely we’ll see outsourcing grow” as a result of the Affordable Care Act, Joanne Spetz, professor at the Philip R. Lee institute for Health Policy Studies and Center for the Health Professions at UC-San Francisco told California HealthLine.

These changes are an opportunity for claims processing, for BPO companies to continue the growth of the business process outsourcing market, and help insurers at the same time. Consider these facts:

• According to McKinsey and Company, more than half of transactions between payers and providers are paper-based, driving up the cost of healthcare.
• Thirty cents of every dollar spent on healthcare in the U.S. goes toward administrative costs.
• Services to assist providers in payments reconciliation, denial management, and re-billing disputed claims can increase providers’ revenues by as much as three to five percent.
• According to the American Medical Association, healthcare providers write off more than $92 Billion per year due to an inability to get accurate and timely claim and payment information

The costs and complexity of ACA compliance will inspire companies to outsource everything possible. For BPO companies, now is an important time to leverage our core competencies and direct them toward the growing healthcare market. We have to provide services that will streamline the revenue cycle, drive down costs, and make the payer-provider relationship more efficient.

The worldwide BPO market is expected to pass $200 billion in value by 2017, Massachusetts-based IDC Corporate announced in a recent report, but U.S.-based growth is expected to trail worldwide growth.

Worldwide BPO is forecast to grow at a 5.7-percent compound annual growth rate, while U.S. growth may top out at 4.3 percent CAGR, reaching $97.3 billion in 2017, the report indicates.

“The BPO services landscape is entering a new phase where customers are now beginning to see the initial benefits of the transformation efforts of their BPO provider’s services. BPO providers now have use cases that leverage their automated subprocess solutions, big data, business analytics, mobility, cloud delivery, and industry-specific BPO services,” said Mukesh Dialani, IDC’s research manager for worldwide BPO and engineering services.

But while the long-term outlook for business processing outsourcing is rosy, recent developments overseas are threatening that growth. At a May 19 meeting in Gurgaon, India, local leaders decried the slowing rate of the BPO industry in the northern Indian city. The city’s BPO work once grew at a clip of 20 percent a year; that’s now dropped to 12 percent. Companies have started choosing China and the Philippines for their BPO needs, officials argued, though some 500 IT and BPO companies still operate out of the city.

“We have hit an air pocket,” Nitin Seth, chairman of the National Association of Software and Services Companies regional council told the Hindustan Times. “Despite having niche expertise and strong fundamentals, innovation has stopped in the last couple of years which is a question of worry.”

That growth in the Philippines may not be sustainable, though. On May 20, a group of business process outsourcing companies said some of their members will pull out of Manila if the peso continues to appreciate against the U.S. dollar, the Manila Standard Today reported.. The Information Technology and Business Process Association of the Philippines said many members were trying to reduce cost either by postponing expansion, or relocating to more cost-friendly sites.

“With the peso pegged at 41 to a dollar, the situation is still tolerable for business process management companies, but if the rate further increases the value of peso, many will be forced to go somewhere else where cost will be more or less manageable,” IBPAP deputy executive director Gillian Joyce Virata said.

BancTec set up shop in Orlando today to showcase its Intelligent BPO (iBPO) methodology at Fusion 2013 at the Coronado Springs Resort. The BancTec team wanted attendees to relax with a smarter way to outsource. To get them in the mood, they offered free massages to attendees.

At the conference, BancTec helped attendees wade through the common struggles businesses face when managing P2P automation, accounts receivables, and inbound mail services. Fusion covers the full spectrum of financial operations and features peer-driven learning with some of the industry’s best minds. At the conference, BancTec managing director of financial transaction processing services and finance transformation solutions Michael Alfonsi presented “Outsourcing: Is it Dead, Alive, or In-between?” Business process outsourcing has become a $600 billion industry, and Alfonsi’s session explored industry trends and helped attendees determine if outsourcing was right for their companies.

In the face of these challenges, BancTec’s iBPO services can enhance a variety of business processes, including invoice processing, AP automation, remittance processing, inbound mail services and image archive.

BancTec, a global leader in business process outsourcing (BPO) and financial transaction automation, today announced that one of its vice presidents, Michael Alfonsi, will speak during May at two conferences, discussing disruptive trends in operational treasury and the future of outsourcing.

Alfonsi, who is managing director of financial transaction processing services and finance transformation solutions at BancTec, will first speak May 10 at the Windy City Summit, a Chicago-based conference that focuses on delivering the most innovative solutions and efficiencies for treasury, cash management, finance, and banking industry professionals. There he’ll present “Ten Disruptive Trends in Operational Treasury,” which explores possible roadblocks and their impact on finance, their associated risks, and the potential rewards. From cloud computing to digital paper, these trends will affect not only treasury and finance, but accounts receivable, revenue management, accounts payable, and strategic sourcing.

On May 21, Alfonsi will head to Disney’s Coronado Springs Resort in Orlando for Fusion 2013, the Institute of Financial Operations’ premier event, with more than 1,500 financial operations professionals attending five days of educational sessions, keynotes and networking opportunities. Fusion covers the full spectrum of financial operations and features peer-driven learning with some of the BPO company industry’s best minds. In Orlando, Alfonsi will present “Outsourcing: Is it Dead, Alive, or In-between?” Business process outsourcing has become a $600 billion industry, and Alfonsi’s session will explore industry trends and help attendees determine if outsourcing is right for their companies.

“I think the one thing the two sessions have in common is they’re both trying to look around the curve,” Alfonsi said.

As vice president and managing director for BancTec’s financial transaction services, Alfonsi is responsible for the company’s suite of payments transaction solutions. More importantly, Alfonsi is part of a leadership team whose primary responsibility is to help clients succeed by leveraging a thorough understanding of their needs and business performance expectations. Known for his enthusiastic and content-rich speaking appearances at international, national and regional forums, Alfonsi is as an energetic executive who applies his leadership expertise to drive change and produce dynamic gains in revenue, profit and performance.

With the physical architecture of computing and processes continuing to decline, cloud computing has become the hot commodity in nearly every corner of the business process outsourcing world. But is cloud computing right for your company?

When cloud computing first became popular, analysts thought it might supercede IT outsourcing and BPO, diminishing the field’s relevance. General thinking held that if customers could rent IT capabilities over the Internet — which is what cloud computing is, essentially — why would they need to outsource their records management or payment processing? Over the past five years, though, it’s become clear that these two fields will likely grow together. Companies have learned to combine the two processes, rather than have them work in competition.

“Cloud technology is a big buzzword today,” BancTec chief technology officer Mark Fairchild said in an interview. “It’s a bit like people running around saying they’ve seen Elvis again. It’s all over the place.”

The major advantage of cloud computing is time, according to Pervez Delawalla, CEO of Net2EZ, a data center company. Startup businesses you can get up and running reasonably quickly and with minimal investment because they no longer have to buy servers, he told Smart Business.

“Outsourcing to cloud computing can lower your costs and allow your company to focus on its strengths, knowing the rest is being taken care of up in the cloud,” he said.

Other industry experts recommend a stepped, nuanced approach. If your company hasn’t considered using cloud technology before, consider a “cloud candidate” project, said Pete Sclafani, CIO at 6Connect, a network automation company. Find an application that would work well both on-site or off-site, so you have a baseline for its efficiency in both settings.

“Companies that choose this route — or any cloud strategy — must take a pragmatic approach,” Sclafani told TechTarget. “The first step is simply knowing what applications you are supporting and what their environmental requirements are. Something as basic as an application audit can help ensure that you have your ducks in a row.”

There are downsides as well, especially from an operational treasury standpoint. Cloud computing represents a fundamental shift in how organizations will view the management of their data, and also affect their ability to perform shifts from internal execution to provider selection. As cloud computing further replaces the view of the traditional data center, it’s important for companies to understand the concept, and how it can make your work more efficient.

The global BPO market is expected to grow more than 5 percent in 2013, buoyed in part by increased finance and accounting outsourcing worldwide and the growth of BPO in new corners of the world.

Finance and accounting BPO could climb 8 percent, HFS Research and KPMG concluded in a recent study, after posting a 13-percent increase in deals in 2012. Prior years showed a steady decline of F&A BPO services; the turnaround is a clear sign of the global market’s bounce-back following a string of economic crises. Total finance and accounting BPO is expected to surpass $25 billion this year.

“Motivations to adopt F&A have reverted back to cost and standardization of process,” the report reads. “While enterprises value innovation and analytical value, they want to get the basics right first. With 90% of BPO engagements meeting cost reduction and efficiency goals, there is a host of enterprises now looking to augment of start their F&A BPO initiatives.”

Finance and accounting, of course, is just one piece of the BPO puzzle. Growth can also be attributed to newer players in the BPO industry, such as Malaysia, Tunisia and the Philippines. In the Philippines, healthcare BPO has increased nearly four-fold since just 2010, climbing from a $102 million industry then to a $430 million one today. That number is expected to climb to $1 billion by 2016, the Everest Group reported.

In Malaysia, the country’s BPO trade group, National Information and Communications Technology Association of Malaysia, is advocating for a top-level government ministry position dedicated solely to the promotion of the country’s BPO companies. And Tunisia — which experienced its first wave of IT-BPO work in the early 2000s — offers a well-educated workforce that is finally settling down following the country’s move to democracy in 2011.

So when searching for the optimal claims, payment or document, or payment processing center, companies will have more geographic options. The larger issue, as always, remains the quality of the service.

Third in a series

In healthcare, automating every step of the pre-adjudication cycle – meaning anything that happens before the payment of a claim – allows claims to be processed more efficiently and more accurately. As claims processing improves, auto-adjudication rates rise and the total cost per claim falls.

Healthcare payers and benefit administrators are provided with pre-adjudication technologies that replace error-prone human processes and provides applications for PPO network management, document management, workflow and overpayment protection. These solutions improve adjudication rates, increase payment accuracy and enhance customer service. Simply put, business process outsourcing can provide better, faster and more cost-effective processing than any manual, in-house paper-based method.

Modern providers are notably different from traditional outsourced labor and BPO solutions, because the claim-cleaning power is derived completely from automation. The powerful technology can:

• Eliminate error-prone human processes
• Guarantee increased pre-adjudication rates
• Increase claim payment accuracy
• Lower costs per claim.

A cleaner payment process is created by innovative automation technology that eliminates dirty data on the front end. The lower an organization’s adjudication rate, the more advanced pre-adjudication technologies can help.

Outsourcing Technology Delivers

Automation solutions can provide health plans with the best options for paper conversion, EDI claim cleaning and disaster recovery. Many find that high-quality technology simply delivers the best value at the lowest cost for accurate claims processing. Additionally, when a health plan or benefit administrator uses a BPO provider to manage its core pre-adjudication process, related services like mailroom and clearinghouse integration can become significantly less expensive to conduct since the core claim data is cleaned and indexed.

Outsourcing technology can create faster cycle times and meets specialized demands of leading healthcare organizations, achieving a balance between solving industry challenges and compliance restrictions while improving the bottom line and the customer experience. However, to align with your specific business needs, the technology must be scalable to quickly ingest new groups and business lines into the claims process. A true customized and scalable BPO solution can provide 99.9 percent system availability.

Second in a series

The review, investigation and processing of claims can be time-consuming and prone to human error. By initiating an advanced healthcare claims processing system, you can alleviate many of these issues and ensure the accuracy of all claims processed.

Paper and electronic data interchange (EDI) claims can be imaged and converted to electronic format and transmitted back to integrate with the appropriate claim system. With a special focus on the front-end operations for claims processing, 100 percent electronic claims submission can be enabled to reduce administrative costs and improve auto-adjudication rates.

The most trusted BPO companies have made significant investments in enterprise software and infrastructure development, specifically addressing data security requirements. Annual external audits can ensure compliance; and multisite processing models can allow for superior business continuity and disaster recovery capabilities.

The introduction of advanced claim validation (ACV) accomplishes something that takes many BPO companies years to master. ACV is claim review based on deep industry knowledge and actual historical claims experience with individual providers, geographies, specialties and settings of care. ACV balances heuristic data – such as ZIP codes, gender, and correlated data – so that payers are not inaccurately matching the claim data themselves. It takes out the manual intervention, allowing the correct payment to be sent to the provider without the payer having to touch the claim at all.

This technology enhances the data for each payer and is customized for its payment system. The data flows into the appropriate claims system and is reflected as requested. ACV generates specific instructions for the exception processing technology to direct the claim specialists to problem areas for correction.

Achieving Better Than Humanly Possible Claim Quality

Well-designed business rules can evaluate each new claim against history for a provider or geographic region across diagnosis, procedure, setting of care, price and other measures.

When industry and customer-specific business rules are strengthened with statistical filing patterns sampled from millions of actual claims, the results are impressive. The intelligence enables the BPO provider to “know” providers to create customized instructions for each claim and to quickly highlight issues for correction.