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John Casillas

Two important trends are emerging in medical banking. The first trend is: As compliance issues escalate in the digitization of health data, banks will increasingly specialize their healthcare services. In fact, banks are proactively implementing new privacy and security processes and controls and touting this in the marketplace to capture business. Thus the substantive engines banks have invested in for data processing, security systems, identity management, and their formidable marketing arsenal are being used to both streamline transaction costs in health care and create demand for new products and services (such as lockbox-based cash posting, secondary billing, and other areas).

The Bank of New York Mellon, for example, is implementing a pilot accreditation program that will give it a "Gold Seal" in the area of the Health Insurance Portability and Accountability Act (HIPPA) privacy and security. Development of the Gold Seal took 15 months and during a two-day pilot phase, involved 23 subject matter experts at Bank of New York Mellon. Milliman, a global actuary and compliance auditing firm, administered the pilot and provided expertise as well as an online compliance tool set that was tested and incorporated into the new program. Groups that include PNC Bank and ACS form an Accreditation Review Council at the Medical Banking Project that helped to create the Gold Seal. The underlying protocols that formed a common set of standards across banking and health care within the Gold Seal were derived from data privacy regulations in banking and health care, not just HIPAA. In addition various industry groups (Office of the National Coordinator for Healthcare Information Technology, Certification Commission for Healthcare Information Technology) were consulted during the process. Alongside this effort, BNY Mellon signed a new arrangement with a national claims clearinghouse-The SSI Group-that provides services to more than one-third of U.S. hospitals. The organizations intend to blend their respective strengths to reduce data transaction costs in health care, leverage marketing channels, and create new medical banking services.

The packaging of hybrid services that link a bank's cash management area with health data management operations is now experiencing high growth. Multiple banks have announced new relationships with health data management firms. Indeed today, traditional healthcare stakeholders are finding highly capitalized banks sitting at the table, actively participating in legislative efforts and making an increasing number of acquisitions.

This fact points to a second emerging trend in medical banking: Banks will increasingly invest in healthcare IT as they build out new services, and this will lead to broader utilization of electronic healthcare services as banks exercise economy of scale. This will affect things ranging from the number of physicians who submit healthcare claims to the very structure of health data transactions. In fact, banking engagement is already affecting health data standards organizations and industry consortiums, as traditional healthcare groups invite banks onto workgroups seeking to streamline claims processing (e.g., National Council for Prescription Drug Programs, Workgroup for Electronic Data Interchange, and Council for Affordable Quality Healthcare).

A good example of this is the Dispute Resolution Initiative. Lead by Sheila Schweitzer, chairperson and CEO of CareMedic, in her role as chair, Health Futures of the President's Council at MBProject, the group involves banks, health data management firms, and healthcare organizations, such as Community Healthcare Systems, Cleveland Clinic, and Stamford Hospital and Clinics, that are rationalizing myriad insurance denial codes into less than 20 follow-up classes. This will streamline the workflow related to denials. Once implemented, the group intends to publish the standard and facilitate its adoption among member banks. Note that some 35 percent of all healthcare remittances flow through a bank's lockbox area, and this number is climbing. Using their collective market strength, banks are seeking to solve adoption issues related to the X12 835 transaction, mandated for industrywide adoption under HIPAA.

John Casillas is founder and executive director, The Medical Banking Project, and chair, The National Medical Banking Institute, Franklin, Tenn. (

Publication Date: Friday, August 01, 2008

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