How AR technology is helping advance payment processing at Avera Health

October 07, 2020

Accounts receivable technology advances payment processing at Avera Health. A/R management partnership with U.S. Bank drives efficiency, centralization and improved patient payment experience.


Digital Bridge eBook

For Avera Health, a sprawling integrated health system with more than 330 locations in 100 communities in America’s heartland, efficiently collecting and posting payments from insurers and patients is a massive, ongoing challenge. It’s even more daunting now that patients increasingly expect their healthcare providers to offer robust digital payment solutions.

To leap the high bar that’s been set in healthcare accounts receivable management, Avera Health needed a banking partner with exceptional industry-specific lockbox expertise and technology, plus a state-of-the-art web-based payment tool.

It found all those things and more in U.S. Bank.


A decade-long journey

Based in Sioux Falls, S.D., Avera Health offers a full continuum of care through 35 hospitals and more than 200 clinics, as well as senior living, home care, hospice, and sports and wellness facilities and services. It serves a population of nearly one million people in communities in its home state as well as Minnesota, Iowa, Nebraska and North Dakota.

Since 2011, the company has been on a journey toward financial centralization, greater efficiency in accounts receivable (A/R) management, and more patient-friendly billing and collection practices. U.S. Bank has been right by its side, helping guide the way.

“U.S. Bank is always open to new ideas and different ways of doing things to help us be successful.”

Avera is working to improve cash flow and cut costs through greater payment processing efficiency, while at the same time addressing patients’ desire for a more convenient payment experience. Two things are critical to that effort: A/R management technology and the company’s implementation of a centralized business office for hospital operations.


Wholesale lockbox improves medical collections

For years, the U.S. Bank Wholesale Lockbox service has been a key tool at Avera Health for achieving improved cash flow and collections efficiency. The company has used wholesale lockbox for collecting both hospital patient “self-pay” payments and some insurance payments.

Patients and insurers no longer mail payments directly to Avera Health facilities, freeing Avera employees from opening the mail, preparing the deposit, keying in the transaction and performing balance and reconciliation duties. Instead, payments are mailed to a lockbox, where U.S. Bank performs those duties and deposits them. Avera receives automated posting files that are easily entered into its patient accounting system. As such, wholesale lockbox saves staff time and accelerates the deposit process.

Avera leverages the bank’s lockbox imaging capabilities for both patient self-pay and insurance payments, which helps drive efficiency. Each month the bank image captures 75,000 payment-related documents for the company.

For patient self-pays, the bank captures an image of each check or credit card slip, as well as the accompanying remittance coupon, eliminating a lot of manual work for Avera and producing ready-to-post remittance files.

To process payments from health insurers, Avera uses wholesale lockbox in combination with U.S. Bank Payment Consolidator, the bank’s comprehensive healthcare receivables service. The bank receives a claim file and captures images of the remittance check, the explanation of benefits (EOB) documents, and critical related correspondence. Imaging enables the bank to deliver balanced remittance files in an industry-standard ANSI X12 835 format and provide Avera with searchable documents for researching exception items.

“We receive an electronic posting file that can be scripted into our system, rather than someone having to look at every patient account on an EOB printout and hand keying in all of those transactions,” explains Mary Wickersham, vice president, central business office services, for Avera.

With all the medical collections challenges providers face today, lockbox continues to provide a good value, Wickersham says. “Due to changes in reimbursements to hospitals, rising bad debt, higher deductibles and co-insurance, obviously the faster we can get the money in the door the better,” she says. “With wholesale lockbox, we’re also able to post payments automatically without a lot of human intervention.”

Avera’s A/R automation journey

  • In 2011, only Avera McKennan Hospital & University Health Center, the company’s flagship hospital in Sioux Falls, was using a lockbox for patient payments.
  • Between 2011 and 2013, Avera implemented wholesale lockbox at many of its other hospitals to speed collections, save staff time and reduce risk.
  • In 2013, the company began creating a centralized business office structure for its hospital operations. As part of that process, by spring 2016, Avera consolidated down to one lockbox for patient payments.
  • Along the way, the company adopted U.S. Bank Payment Navigator to enable patients to make electronic payments online or by phone and set up automatic payment plans, and U.S. Bank Payment Consolidator, to add efficiency to the process of accepting payments and related information from insurers in an electronic format.
  • In 2020, as its hospitals were adopting a new patient accounting system, Avera started migrating those facilities to a centralized lockbox for health insurance payments.

Consolidating wholesale lockbox supports centralized business office

Centralization is also driving efficiency at Avera. In the past, from a financial perspective, all of the company’s hospitals operated independently, and each hospital that used a lockbox for collections had its own service. However, Avera created a central business office structure several years ago. In doing so, the company worked with U.S. Bank to consolidate its hospital lockboxes. In 2016, Avera consolidated to a single U.S. Bank lockbox for hospital patient self-pay payments.

Avera continues to work on consolidating the processing of its hospital-related insurance claim payments with the goal of getting down to a single lockbox in St. Paul, Minn., for those payments as well. Wickersham says Avera’s strategy is to begin funneling the insurance payments for each hospital over to the dedicated commercial lockbox once that hospital implements the new version of the patient accounting software the company is adopting.


Improving the patient payment experience

The lockbox consolidation has coincided with Avera’s development of a consolidated patient billing statement, enabling patient families paying for care provided by multiple Avera facilities to receive one bill, direct payment to one wholesale lockbox, and if they are on a payment plan, to be on just one plan. “It just makes it easier for patients to manage their bills,” Wickersham says.
To further improve the patient payment experience, Avera has adopted U.S. Bank Payment Navigator. This web-based healthcare payment tool is designed to improve up-front collection of patient payables and reduce bad debt. Payment Navigator enables patients to visit Avera’s website to make payments online, unassisted. In early 2020, patients were using Payment Navigator to deliver more than 62,000 payments a month representing about $8.4 million.

“With the millennial population getting older and becoming responsible for more healthcare payments, we have to compete with the Amazons of the world,” Wickersham explains. “We want the patient to be self-sufficient, and Payment Navigator has made that possible.”

Avera’s call center collectors can log into the Payment Navigator portal and accept credit and debit cards by phone, as well as electronic debits to patents’ checking and savings accounts. Through the portal, Avera also enables patients to set up “auto payments,” such as monthly deductions from a checking account, as part of a payment plan.


Instituting A/R automation across the enterprise

U.S. Bank healthcare treasury specialists continue to consult with Wickersham and her Avera colleagues about how new treasury automation tools can support the company’s goals. Every hospital has different needs, structures and patient accounting system setups. For nearly a decade, U.S. Bank has worked to understand Avera’s platform, and “mold some of their tools around our needs,” Wickersham notes.

Going forward, Avera envisions standardizing the revenue-cycle process beyond the hospital side of the business to include its vast network of clinics and other facilities. The foundation for centralization and digital solutions has been set, and U.S. Bank is committed to partnering with Avera in that effort. 

“It’s been a good relationship,” Wickersham says. “U.S. Bank is always open to new ideas and different ways of doing things to help us be successful.”

If your healthcare payments system is overworked, perhaps it’s time to get it in shape. Contact us to learn more about efficient payment best practices.

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.

U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.