The Green Sheet Online Edition
September 10, 2012 • Issue 12:09:01
A new strategy for health-care payments
John D. Reinecke, President and Chief Operating Officer at Aligned Payment Systems LLC, is passionate about improving the U.S. health care system because deficits in the system directly affected his family. Reinecke said his youngest son, who was born in 2000 with cerebral palsy and passed away in 2003, couldn't get the care he needed from the Las Vegas health care system. "It's just that the communication, lack of patient education, delivery and the organization all was really horrendous," he said.
Reinecke served a long tenure with MGM Resorts International before becoming Executive Vice President of Business Development at Outcomes Based Delivery Systems, a Florida-based startup primary care organization that operated in Las Vegas as Canyon Gate Medical Group. While with Outcomes, Reinecke, spurred by his son's tragedy, helped create an onsite health clinic for casino employees at the New York-New York Hotel & Casino in Las Vegas.
Then in 2011, Reinecke co-founded APS with the mission to assist the uninsured, or patients without financial means, in obtaining services, as well as to help health-care providers get paid for their services more efficiently.
Las Vegas-based APS provides a financing platform to practices that allows patients to pay in full for medical services at the time they receive them. Thus, the patient receives medical attention, and the practice doesn't have to receive incremental payments over time. Reinecke said the service takes debt off medical practitioners' balance sheets and reduces collection headaches.
Checks at the POS
Right at the POS of a doctor's office or medical facility, patients who are unable to pay are given the option of signing up for APS' service. The preapproval process is based on patients' check writing history, rather than credit scores, since an increasing number of people have poor credit records or have had no access to credit at all.
The patient authorization process is handled by APS' partner, check guarantor Secure Payment Systems Inc. The health-care associate enters the patient's driver's license number into the POS terminal, and a physical check for the patient's initial installment on the balance goes through a check reader to capture the payment amount and the patient's bank account information. SPS matches that data against its check database, which accesses both local and national negative files of unpaid checks, according to SPS' website.
Reinecke said the preapproval process occurs in real time. APS offers three-, six- and 12-month financing plans to patients and pays the remaining balance due to the medical provider. The payment terms are based on a combination of the length of the loan and the maximum loan amounts set by the practice. "The health-care providers get paid in three days after they batch out the POS terminals," Reinecke added.
Horse at the gate
Reinecke, who sits on the advisory board of Meridian Medical Practice Solutions, said by leveraging the portfolios of APS' partners - SPS and Atlantic-Pacific Processing Systems Inc. (for credit and debit card processing) - the service can be expanded nationwide within three to five years.
This service is part of a paradigm shift occurring in the health-care space, according to Reinecke. "Instead of the doctor saying let's work out a payment plan with you, [it's now] let's get you financed based on your check writing history," he said.
That's why Reinecke characterizes APS' service as a "Trojan horse" selling strategy for merchant level salespeople (MLSs). They can use the service as a way to skirt the defenses of health service gatekeepers who are often skeptical of salespeople and their claims. "Nobody has heard of this financing before," Reinecke said. "It's new. It's innovative." Using the service as the hook, MLSs can then delve into APS' other value-added offerings, he added, noting that an MLS can say, "'Yes, by the way, let's look at your merchant services and statements so we can see where we can save you money.'"
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