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Well, InsurCard is at it again. This time, the company is offering its Virtual Card. With this new product, a complement to the company's Visa Prepaid Card, InsurCard has delivered a solution for the other half of the workers' compensation payment equation -- healthcare providers.

"When you visit an insurance company, TPA or self-insured employer and tell them you have a debit card solution for workers' comp indemnity payments, you are only solving half the problem," says Robert Mendte, InsurCard's president and a 30-year veteran of insurance operations and management consulting. "With the Virtual Card, healthcare providers receive electronic insurance payments, which are much faster and more secure than a mailed check or other form of payment."

Naturally, it's impractical to send an actual prepaid Visa card to a doctor or hospital, so InsurCard went the virtual route by offering insurers and other payers both the actual Visa Prepaid Card for workers' healthcare and indemnity payments, and the Virtual Card for provider payments.

Interestingly, the InsurCard Virtual Card's most common delivery platform is the fax machine. While that may sound like older technology, Mendte explains that for healthcare providers, fax is the primary Health Insurance Portability and Accountability Act (HIPAA)-compliant payment transmission mode.

"Regular email is not HIPAA compliant, so any email sending patient data is required to be encrypted with a password," Mendte says. "If a provider wants it delivered that way, we will send by secure email. But the good old trusty fax machine is point-to-point so data does not go over a network, which makes it the easiest way to quickly and securely transmit payment to providers."

Roy Schwartz, vice president of operations at InsurCard, noted that 95 percent of the doctors' offices across the country have a fax machine (and most are used very often), so it's clear that nearly every provider in the claim process can be part of the InsurCard Virtual Card solution.

"We solved half the problem by making payments to injured works a much more effective, safer process," says Schwartz. "Now, this completes the solution."

Of course, Schwartz pointed out, payments could be on the same claim, so that payers could use both the Prepaid Visa Card and the Virtual Card to make the claim process move even smoother and faster.

For example, on a given claim, the claimant/injured worker would receive a Visa Prepaid Card for their wage replacement and reimbursements for medical devices or initial care, and the balance of the medical bills will be transmitted right to the doctor or durable equipment provider via the Virtual Card fax.

"This has all the same efficiencies and safeguards as an actual prepaid card, because providers immediately know how and when they will be paid," Schwartz says, adding that every time a provider is paid the system ensures that a bill entered for a Virtual Card must match that exact amount on the fax. Also, the code will specify that the amount must be used for services rendered, so it is virtually theft proof by staff or others.

"If someone at the front desk sees the fax come in and tries to use the card number on the fax, it is detected immediately," Schwartz said. "The anti-fraud benefits are built into the Virtual Card. And for the providers waiting to be paid, it is a clean, easy process, with no mail delay, no lost checks and resulting late payments, etc."

On the technical side, InsurCard takes the insurer's current check file and sets up a translation file, which transforms the check file, including explanation of benefits, into a simple, well-designed fax transmission. The top third portion of the fax actually has a graphic of the Virtual Card with the debit card number for payment.

"Providers know immediately exactly what they are being paid for," Mendte explained. "People have tried to do this electronically, but the problem is in a doctor's office there might be payments from 150 different insurance companies -- most of which will only electronically process their payments. With the fax and the virtual debit card, no need for all that complexity and confusion."

Mendte added that just as the time was right for the Visa Prepaid Card for injured workers/claimants, so is the time right for the Virtual Card. In fact, at 64 percent, debit cards are the most common form of payment in the country today, especially on purchases of under $160.

With the Virtual Card, providers can receive their payment data by secure email or fax for a one-time entry into their merchant card terminal. Providers get their payments immediately and, as with checks, the payments are accompanied by an Explanation of Payment advice showing exactly what services are covered by the payment.

Mendte outlines the main benefits of a Virtual Card for providers:

-- Simple Implementation --- no systems integration necessary.

-- Preferred by Providers -- more than a 75 percent first-time acceptance rate.

-- Immediate Results -- providers simply choose if they prefer to get paid via fax or email.

-- No Transaction Fees -- no cost to insurer or TPA.

-- Widely Accepted -- over 130,000 healthcare providers accept payment by the InsurCard Virtual Card process.

-- Reduces Fraud - a one-time use card with a short expiration date.

In addition, from an internal perspective, advantages to payers include:

-- Reduced handling cost on every payment

-- Assured compliance with state regulations

-- Eliminated Check Stops and Voids

-- Improved Cash Flow and Cash Control

-- Improved Customer Care

-- Gain competitive advantage in the marketplace

"Workers Compensation claims payments have always been cumbersome, costly and time consuming," Mendte noted. "Plus, the costs and time associated with issuing paper checks for claims payments to injured workers and healthcare providers typically are difficult to manage."

Today, Mendte said, checks are becoming outdated in the emerging world of electronic payments. The InsurCard Visa Prepaid Card, in fact, is now accepted in 40 states including New York, Texas, California and Florida. And because many industries - i.e., retail and the Federal government - have moved to prepaid cards, cards have become routinely accepted.

With InsurCard's solutions, claimants do not have the uncertainty of waiting for a check in the mail and then having to go to the bank or check cashing store wastes time and money. Providers also don't want to wait for their payments to arrive in the mail and then wait again while checks clear at the bank.

For the Prepaid Card, an electronic payment file is sent from the insurer to the bank that issues the Prepaid Card. The bank then mails the injured worker their card and loads the value of the payment to the card account. As with any Visa card, claimants dial up a toll-free number to activate it. Even more, the card holder can call InsurCard's call center or check the website for customer service or inquiries on balances. The bank provides audit trails, financial activity and reconciliation reports to the insurer.

Mendte explains that the Prepaid Card approach has other advantages. Most of all, it provides significant benefits for lower-income workers, since there are no check-cashing fees or delays while waiting for a check to clear. For the insurer, it lowers payment processing costs and improves cash control and fraud protection. It also protects customer privacy, as injured workers do not need to maintain a bank account or reveal a bank account number.

Finally, the Visa Prepaid Card gives a claimant immediate and easy access to their funds anywhere Visa debit cards are accepted, as well as at more than 500,000 ATMs worldwide. And, with the reloadable Prepaid Card, timely payments are ensured, improving cash flow and reducing check issuance and post issuance costs for insurers by up to 85 percent.

Now, as InsurCard rolls out its Virtual Card for payments to healthcare provides, the workers compensation electronic payment loop is closed.

"With the addition of the Virtual Card for healthcare provider payments, we now can offer a complete, end-to-end workers' compensation payment solution, one that reduces cost and boosts efficiency on so many different levels," Mendte said. "For claimants, payers and providers, it's a winner across the board."

For more information, visit insurcard.com.

(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance® on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com/.)

October 26, 2011

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