Financial institutions lend technology to healthcare

January 1, 2006

National reports—Recent partnerships have illustrated the conversion of credit and debit card technology from the financial industry into healthcare.

NATIONAL REPORTS-Recent partnerships have illustrated the conversion of credit and debit card technology from the financial industry into healthcare.

Blue Cross and Blue Shield Assn. (BCBSA) has partnered with Visa USA to offer members a debit card to pay for healthcare expenses, and has developed Blue Healthcare Bank to help Blue Cross and Blue Shield (BCBS) companies give consumers greater financial options and simplify how they direct their healthcare spending. Meanwhile, Empire Blue Cross Blue Shield in New York state will offer its Empire Total Blue members an American Express HealthPay Plus payment card.

"We expect our new relationship with Visa to play a important role in the development of Blue Healthcare Bank," BCBSA Spokesman Chris Hamrick tells MANAGED HEALTHCARE EXECUTIVE. "It is too early to say exactly what that relationship will look like until after the bank is operational, but clearly as the consumer-directed market continues to grow, the Blues are in the process of building an infrastructure to facilitate a simplified consumer experience for their healthcare spending. As more consumers enroll in health savings accounts [HSAs], flexible spending accounts and health reimbursement arrangements, the need for easier management of these personal savings accounts will continue to grow."

"Consumers are being asked to be more involved with healthcare decisions for themselves and their families. The debit card is a tool that will help simplify the financial side of healthcare transactions," he says.

According to Hamrick, about 90% of all providers nationwide accept Visa debit cards. The debit card can be used for any medically qualified expense, such as physician office visits or hospital care. Consumers can use the debit card at the point of service, or to pay bills online or through the mail.

SIMPLIFY THE MEMBER EXPERIENCE

Empire Blue Cross Blue Shield's HealthPay Plus card can be swiped by the member at the point of service-at the doctor's office, pharmacy or hospital. The provider sends a claim to Empire BCBS as usual, and the swipe is matched up with the claim during processing. Money is withdrawn from the member's HSA or line of credit automatically, and then payment for Empire's discounted amount is made directly to the provider.

"The doctor does not have to bill or collect from the patient, saving time and money," explains Jason Gorevic, senior vice president, sales and marketing at Empire Blue Cross Blue Shield. "Members benefit from the simplicity and convenience of the HealthPay Plus 'one-swipe' process, while also getting the security of the line of credit."

In addition, the member can maximize the tax savings of an HSA by drawing from the line of credit first, thereby preserving HSA funds. Unused funds carry over to the next year, earning interest or investment income tax-free, allowing members to save for future healthcare needs.

In the Empire-American Express partnership, American Express is both the HSA custodian and the card processor, according to Gorevic. "We are taking the typical health plan/financial institution relationship to the next level by integrating our claims adjudication process with the American Express payment process. We believe that to deliver a superior member experience, we have to offer more than a traditional debit card with limited functionality. At the same time, we will continue to offer our initial custodian as another option for our employer clients that prefer a less-integrated model."

According to Gorevic, as employers wrestle with rising costs, they are turning to health insurance products that are designed to share more of the cost with employees, such as high-deductible insurance plans that are coupled with an HSA. "Inherent in the design of an HSA are several barriers that the partnership between American Express and Empire Blue Cross Blue Shield directly addresses-assuring access to funds that fully cover the member's deductible, integrated claims processing that simplifies the payment and collection process for both member and provider, and assurance of payment for the provider," he says.