Episode Transcript
Speaker 1 00:00:03 Hello, and welcome to our revenue radio powered by Kassouf and Kassouf healthcare solutions, where we enhance the business of medicine today. Our guest is Ramsey white from innovative billing solutions, where he serves as the vice president of, uh, sales and business development Ramsey. Great to have you with us. We've had a, a great relationship between Kassouf healthcare solutions and yourself and innovative billing. And it's good to have you here today as we, uh, as we discuss, uh, using merchant services and, uh, maximizing payment solutions, um, it's a way that practice managers, practice owners in healthcare, uh, specifically, uh, can learn to, uh, to navigate through those, uh, those merchant services statements, and learn how to use credit card and other online payment solutions and such. And we're gonna be taking this through, uh, two episodes of revenue, radio, and, uh, glad to have you back with us
Speaker 2 00:01:08 Today. Yeah, thanks for having me. All right.
Speaker 1 00:01:09 Super,
Speaker 2 00:01:10 Um, it's always exciting to work with Kassouf and you guys have a great team. Um, we work with a lot of revenue cycle companies, but it's always a pleasure working with, uh, you Marty and, uh, other people on the
Speaker 1 00:01:23 Team. Yeah. Thanks. Thanks.
Speaker 2 00:01:24 It's truly good thing.
Speaker 1 00:01:25 Yep. We've had Marty on the show before and, uh, imparting her wisdom on, uh, on those various items of the revenue cycle and yours is, uh, crucial mm-hmm <affirmative> because it great gives great access to the patient, their families mm-hmm <affirmative>, especially on the payer side, but not so much from a insurance standpoint, but once it gets to patient responsibility and really man with, uh, all the COVID that has happened and just not so much the ability to be there in person and the, those over the counter collections that we like to talk about, right. Uh, your solutions, uh, are one to help, uh, generate the, the payments that we need. Mm-hmm <affirmative> but also from a business standpoint, understanding now we got this merchant services statement that's coming in or trying to figure out all these percentages. Should I change? How do I go about this?
Speaker 1 00:02:20 What do I need to do? What kind of technologies do do I need to consider mm-hmm <affirmative> so, uh, we're gonna, we're gonna look at that and dive into it. You're the, you're the subject matter expert I know about that. Uh, we're we're we appreciate you, uh, being with us. And again, as I said, we, uh, we do value our relationship with, with your organization and the guidance you bring to us. Mm-hmm <affirmative>, as we then can bring those and take that out to our, to our clients. So let's get kicked off, uh, this morning. And, uh, uh, let's talk a little bit about that, that merchant services statement, kind of what you guys do, right? What we see on the back end as practice managers and owners, uh, tell us, uh, a little bit about what we need to expect from a, from a merchant services vendor or a, a service
Speaker 2 00:03:08 Provider. Yeah. That's a great way to start this. Um, so as I was making notes for what to talk about today, I thought just to keep this really simple, that everyone has to take payments. Okay. Mm-hmm <affirmative> and everyone needs to collect in some way from those patients. So the way we do that is through merchant services. Um, the use of credit cards is growing exponentially, especially at these high deductible plans. Mm-hmm <affirmative>, um, we're seeing a shift in, um, payment responsibility is becoming a big part on the patient, as opposed in the past when insurance was doing a majority of that. So obviously COVID changed a lot of things and we got really busy. We actually got a lot of phone calls because if you think about it, uh, insurance billables were going down. People weren't seeing as many patients, right? So now you have this AR asset sitting there and we, people are calling saying, Hey, we need to collect this as soon as possible.
Speaker 2 00:04:05 Um, merchant services makes that possible credit cards are a huge part of a medical practice, and there's so much new technology out there now that makes everything more integrated, makes it work more seamlessly with the practice management software. But the core of all of that is a merchant account. You have to have a merchant account to be able to do those things. Um, so yeah, it's something that is really kind of becoming the lifeblood of a practice. Now, the way we get a lot of questions about those merchant statements, they are confusing <laugh> um, and sadly the industry of merchant services has been notorious for very confusing statements. Um,
Speaker 1 00:04:49 Is that done on
Speaker 2 00:04:50 Purpose? It probably is.
Speaker 1 00:04:51 <laugh>
Speaker 2 00:04:51 Cause you don't know what you're paying. I
Speaker 1 00:04:53 Sure feel like it at times as
Speaker 2 00:04:54 Well. It, it really is. And we get so many calls from, uh, revenue cycle companies. Mm-hmm <affirmative> with their providers say, Hey, can you tell me what I'm actually paying? So just kind of to simplify it, if you're looking at, okay, what am I actually paying for merchant services? We encourage our clients to look at the effective rate. What an effective rate is, is it takes in every single per item fee, every authorization fee, every monthly fee. And then you divide that by your sales that month, your credit card sales, and that creates a percentage of your, uh, holistic credit card picture. And just a general rule of thumb. If you're over 3%, there's something that you might wanna look into. Um, you know, and what we've noticed is different specialties tend to be around the same percentages. So back office specialties like anesthesia, general surgery, a lot of their payments are not face to face they're online or over the phone, right?
Speaker 2 00:06:02 So the credit card companies, when it's not a face to face transaction, there's more risk mm-hmm <affirmative> that that may not be a legitimate transaction. So because of that, those specialties actually are paying higher rates. Cuz if you think about their credit card companies like visa, MasterCard, discover all the names that we know, their whole line of business is risk. We're giving people we're funding things. We don't wanna return them. Right? So typically with back office billing practices, we'll see around that 2.8 to even a 3.2% of their, uh, effective rate. Um, whereas let's look at pediatricians, a lot of their payments are face to face copays. Um, you know, a lot of those vaccines are something insurance is covering a majority. So they're mostly working with $40 copays. We see their rates under 2% because almost all of those transactions are face to face. It's less risk if someone's handing you a card, right. Especially in a healthcare situation, you've got their driver's license, you've got their social. It's very likely that is a legitimate charge. So it's not uncommon, especially if people are, patients are handing a lot of debit cards. Mm-hmm <affirmative> to see even sometimes the practice is getting like 1.2 to 1.6%.
Speaker 1 00:07:29 So let me, uh, make one disclaimer, as we continue to move through this discussion, any of the, uh, card vendors that we might reference in our discussion purely, for example only, and we're not casting any usper dispersions,
Speaker 2 00:07:47 They're all great,
Speaker 1 00:07:49 Whatever we love for or against any of those. Right. And, uh, we, yeah, that that's, uh, just so that we're, we're clear on that. Um, talk to us for a moment about, you know, when we're, when we're setting this up, there's always that guarantor portion of an application. Wait a minute, am I, what am I on the hook for? Right. Why am I signing this? It feels like I'm, I've got pay something if something goes wrong. Right. Can you kind of explain a little bit about how that happens on the front
Speaker 2 00:08:21 End? Sure. Yeah. And actually to answer your question, I got something that leads into that. Okay. But sure. Um, part of that guarantor application mm-hmm <affirmative> um, the owner of the merchant account has to provide their social, their date of birth and their address. We get lots of questions about that. Why do I have to give that personal information? Um, well, after nine 11, there was the Patriot act and the, one of the, there was a lot of things in that, right. But obviously we were trying to prevent, um, domestic terrorism mm-hmm <affirmative>. And one of the ways they're doing that is by, uh, avoiding external international funding through American merchant accounts. So, uh, on those merchant applications, they want to connect an individual with the business, an individual in the United States using a social or date of birth to that merchant account. You know, they wanna have that accountability there that leads into the guarantor signature. When you open a merchant account, you know, you are responsible for funding, those things, for example, say that someone, uh, we use TSIs as our processor, right? So say, or first data, whoever your listeners are using for processing, they are funding those transactions and allowing that transaction to go through and in return the owner of the merchant account, the provider, the practice that's open to account, they're responsible to pay their fees. So at the end of the month, when you have your merchant statement, come through, there's gonna be fees deducted for the service of allowing those credit card transactions to go through.
Speaker 1 00:10:05 So the guarantor is more along the lines of G guarantee. Yes. That the fees will be paid.
Speaker 2 00:10:11 They will pay the fees. Right.
Speaker 1 00:10:13 And your sort of the middle person entity mm-hmm <affirmative> between the user, which would be the practice. Right. And the processor. Yes. So who who's really on the hook or the underwriter, if you will, for these, the, the actual credit card companies themselves, not so much thesis or first data.
Speaker 2 00:10:35 Yeah. That's a great question. And it's confusing cuz there's a lot of different players. Sure. So we have the bank, right? We have,
Speaker 1 00:10:42 Which you are not,
Speaker 2 00:10:42 We're not the bank. Okay. We are an agent. Yes. So we make everything work. Right. So anyone who wants healthcare, patient payments, we make it all work. Um, but there's a lot of different entities that make a tra transaction go through mm-hmm <affirmative> there's the bank, there's the processor, there's the merchant account, which is connected to the provider mm-hmm <affirmative> and it's all flowing back and forth. Making sure that when that patient swipes the card, the funds are actually there, it's approved and it's sent through back to the bank and it's gonna hit the provider's bank within two to three days. Mm. Now, um, let me give you an example, kind of an anecdote to who's responsible. So we had a client in Chattanooga who they're an OB G N practice that set up, they set up a patient on a payment plan mm-hmm <affirmative> and the patient signed something saying I authorized this payment plan to draft on my card once a month.
Speaker 2 00:11:44 Well, the patient contacted visa and said, I did not authorize that payment visa without even, you know, and again, not promoting or whatever. I'm just saying how it works. Right. Uh, visa pulled those funds back from our client because the patient, the card holder disputed it. Well then our client produced the form saying the patient did sign this. They authorized the payment visa, refunded the clinic, the payment mm-hmm <affirmative>. So there's lots of different people involved. Right. And it's confusing to say who at the end of the day is responsible. It's the cardholder. Yep. But the card issuers are going to side first with the cardholder. That's why it's really important to have receipts, um, to have documentation, um, to have a cloud based reporting system that shows this transaction on this date took place right. For this cardholder, for this amount. And then obviously our, our clients have an EHR system that has, um, services that were rendered on that day mm-hmm <affirmative> yeah. Uh, documentation.
Speaker 1 00:12:56 Yeah. Good. Excellent. And that, that brings up that I guess, uh, category that you typically see is that chargeback, right? That's what you're describing. Yes.
Speaker 2 00:13:06 Is it's a return. Yeah.
Speaker 1 00:13:07 It's a disputed charge or return.
Speaker 2 00:13:09 Yes.
Speaker 1 00:13:10 Um, and in healthcare we don't necessarily have returned services except for the fact that you might have credit balances where something from the adjudication process mm-hmm, <affirmative> causes that to happen. Um, maybe some, some services like, uh, dermatology where you're prepaying on some items before you get, you know, uh, through the, through the, the treatment and the, and the procedures. Um, and then those returns also carry a fee and a charge. Is that
Speaker 2 00:13:43 Correct? They do. And actually I get a lot of questions on that. Yeah. This happened actually this week, one of my clients reached out, um, they said, Hey, someone, who's not, our patient paid us online. I'm like, wow. That is very rare. That happens. Yeah. But it did happen. And she asked, what did we're gonna return it? Mm-hmm <affirmative> but what fee are we paying? Right. For their mistake. Right. Um, so I pulled it up and I said, you know, it depends on the type of card they used mm-hmm <affirmative>, but it would be either a dollar 47 or if they used a certain type of debit card, 55 cents, um, which is pretty minimal. But, uh, yeah, when you return a transaction on a credit card, there is a fee associated with that because the credit card company that's a transaction to them. Mm-hmm <affirmative>
Speaker 1 00:14:30 Right.
Speaker 2 00:14:31 So it's very convenient to just refund it back on the same card for accounting reasons. It's probably, it's probably better to track the path of that return, but if you're trying to really watch those nickles and dimes issuing a check would be the most, uh, cost effective way.
Speaker 1 00:14:51 We, um, and I know there's, there's all kinds of things. Again, you see on these service orient, these statements, interchange costs, mm-hmm <affirmative> and things of that nature, uh, are those pretty typical? Should, should we be calling, uh, the agent and, and really walking through that each month or right. What, what's the kind of the knowledge base, right? That, that a, especially a new practice manager or a new, uh, practice owner. Right. A lot of, uh, we see a lot of practices now that are breaking out of the hospital ownership mm-hmm <affirmative> or the private equity they use, they finished that contract and now they want to kind of go back out on their own they're con contemplating all of that. And, um, this whole credit card feature doctors or doctors, not bankers. Right. And, uh, we, we certainly want to help them understand that. So talk to us, uh, for a moment about some of those really intricate, um, uh, categories and things that they might see and need to understand as how it goes into that whole cost that, that you're mentioning earlier.
Speaker 2 00:16:00 That's a great question. And I think the way it would be easiest to understand is you really have most commonly there's four different ways. Um, a provider is being charged. There's an interchange percentage, which is just every different credit card has a different cost. Um, a lot of people don't know that, so there's a few different pricing models, but there's an interchange plus model, right. Which is a cost plus model, which we love. It's so simple. It's so clear what you're paying doesn't matter, what type of card comes in. You're only paying a cost markup on it. That's interchange plus, um, the second way that's very common is a three tier to pricing. There's a qualified charge, a non-qualified and a mid qualified. And that's where it gets really confusing. We actually don't as our personal belief, we don't believe in doing that because it's really hard to know what cards are qualified. That's the best rate you could possibly get. So often we'll see people saying, Hey, my merchant, uh, partners said, I'm gonna get 2% on qualified cards, but they don't know that, Hey, only like 30% of the cards that your patients are using fall into that category, right. That may qualify maybe two and a half percent, but then the non-qualified could be up to 4%. So you really need to look at what's my pricing model. Um, we love interchange. Plus I recommend everyone do that. Um, if you're merchant partner refuses, there's a reason. Mm. Um,
Speaker 1 00:17:37 And when you say merchant partner, you're talking
Speaker 2 00:17:40 About your agent, whoever that
Speaker 1 00:17:42 Would be
Speaker 2 00:17:42 Innovative. Yeah. Someone like an innovative billing whoever's facilitating mm-hmm, <affirmative> your merchant services that you signed agreements with. They would be the ones to establish that interchange or that three tier pricing. Um, just to give you some examples. Um, and these are examples. There's so many different types of cards, but a regulated visa debit card, like a major bank that you have a checking account with and they give you a debit card. Mm-hmm <affirmative> the cost on that card can be as low as 0.05. So that is our clients love getting debit cards, right? Because usually it's a really good rate. Um, but let's consider like an airlines rewards card. A lot of people don't know that that rate's gonna be higher because you're actually paying for that patient's rewards through your merchant services, the cost on that card's gonna be higher. Right. It can be up to 1.15, 1.5 for that rewards, depending if it's like a tier three, um, you know, platinum card, it can be even higher. Right. So it's really important that, you know, Hey, no matter what the card is, I'm only paying this percent.
Speaker 1 00:18:55 And if I'm a cash type business, say plastic surgery, or some of those specialties, mm-hmm, <affirmative> where you've got this particular clientele, right. That's gonna have a particular, uh, card pattern, if you,
Speaker 2 00:19:09 Right.
Speaker 1 00:19:10 Mm-hmm, <affirmative>, that's gonna hit pretty, pretty high. So should those fees get passed back to the, to the patient? I say, should, that's a kind of a closed ended question.
Speaker 2 00:19:20 I I've been getting that question a lot recently. Um, and actually what kind of sparked it was inflation, um, because a lot of our practices did not increase their cost structure of different services. So now they're thinking, okay, how can we find revenue without passing it on through our services? Um, you can offer a convenience fee and we don't see it a lot, but it is an option where you, you can't call it a credit card pass through, right. It's you're not allowed to do that, but right. You could have a convenience fee that passes on, uh, some of those cost to your business, to the patient. Now I will say, as you're considering that it's not wrong to do that, a lot of people need to considerate, but I like to reward patients who are paying us. Mm-hmm <affirmative>, um, I don't wanna penalize patients who are paying us. Right. So I would say if there's a different way, you could do it. Maybe if you are on a cash basis, maybe just increasing the cost of the service mm-hmm <affirmative> um, I think that would be, it would be received better. Um, but no, it's not wrong. You can definitely have a convenience fee if you want.
Speaker 1 00:20:36 We, um, we're we see a lot of, or I'll say a lot, an increasing number of these virtual credit cards from institutions now that are sending those over as a form of payment. Right. How should a practice, again, may not have seen too many of 'em start to see that a lot in direct invoicing and maybe workers' comp some of that type of practice structure. Uh, does that work through the regular credit card processing? Yes. Is there an additional fee? How should I consider that versus a check? What are your thoughts along virtual credit cards?
Speaker 2 00:21:17 I say, take, take 'em if you can. Yeah.
Speaker 1 00:21:20 Um, I think some of my colleagues would, uh, argue that point cause they're, you know, they wanna maximize as much of that cash. I kinda look at as a time value of money situation, but
Speaker 2 00:21:30 Yeah. Yeah. I, and we're actually seeing more of that with, um, like, uh, on the payer side, right? Like a third tier, maybe smaller payers prefer to use a virtual credit card. What's interesting about that type of payment is it's a business to business transaction. Um, whereas opposed to business to consumer through a chip card reader at the front desk. Right. So I encourage people who are get seeing more of those to maybe look at a level three option on your merchant account. Mm-hmm <affirmative> what level three does, is it ask for a little bit more information from that business to give you a better credit card rate? Sometimes it's a address that's connected with the card. Um, it could be an invoice number or in this, uh, healthcare example, an account number, right in that field. A lot of times with level three, they're not even checking that that information matches something mm-hmm <affirmative> they just wanna see that it's filled. Right. Sometimes you can even get up to 1% better by having that information.
Speaker 1 00:22:32 Are those virtual credit cards, you know, we've we've we hear some about the credit card on file process, right. That's probably more for on the patient side mm-hmm <affirmative> so the, uh, institution is gonna issue a new number each time each
Speaker 2 00:22:48 Time, correct? It's a one time payment. Yeah. Okay. So, um, I know, especially with our really cost sensitive clients, I would encourage your payers to ACH U right. If you can, um, way less on the fees. Some people don't have that option. Right. But it's good to, to encourage them to do it. Right. Um, if we're really trying to get those fees down, ACH is the best way. It's the same exact thing, except we're using a bank account and a routing number instead of a credit card number with an expiration date and a three digit code on the back. But yes, those are one time credit cards. So credit card on file. If you tried, it wouldn't really work because that's a one time payment. It's not gonna let you re rerun it. Yeah.
Speaker 1 00:23:38 I want to save our technology questions. We're gonna have you back for another episode. Okay, cool. And, uh, I want to kind of save the technology cuz that's the cool
Speaker 2 00:23:48 Yeah. That's the fun stuff. Yeah.
Speaker 1 00:23:49 So this is, this is the good long division right before we get into how to do the short way. Right. Uh, I understand that there can be additional or a different charge structure, call structure from the swiping versus the actual keying in of the number. Yes. And I know there's all kinds of security issues and we got Russ here who is in Ingar and security, uh, organization.
Speaker 1 00:24:20 He just perked up when I said, uh, security and such, and I know there's the whole, write it down and try to go put, punch it in. Right. And such. So we don't want to hit that too, too hard today cuz that's not the direction, but I want to stay more in the cost and, and maximizing the revenue and, and income for a practice. Are there different, uh, fee structures as to swiping versus punching into the number mm-hmm <affirmative> as they sit down in some of the rural areas, mash it. Yeah. You know, what, what, what, what should we consider and know about that? Right. As far as ease of use and how it fits to fits into our cost. Yeah.
Speaker 2 00:25:01 At
Speaker 1 00:25:01 A practice.
Speaker 2 00:25:01 Great question. So yes, there are, um, we're really talking about card, present transactions in the form of a chip reader or a swipe mm-hmm <affirmative> and then, um, card, not present transactions. Those are, uh, over the phone transactions. And again, we're coming back to risk here. You know, it's all about risk and mitigating risk. When you take a payment face to face, typically it's half a percent better on the cost, which over a year could be substantial. Um, but it's, some of our practices don't have that ability. They have to take payments over the phone, especially with anesthesia clients, right. Patients don't even know who they are. Right. They don't have an office. So it, they, they're kind of, unfortunately they have to take payments that way. So
Speaker 1 00:25:48 If you're in that type of specialty, you just need to kind of consider that
Speaker 2 00:25:52 It's what it is, what it is. What's
Speaker 1 00:25:54 The cost of business. I need to think
Speaker 2 00:25:55 Through. Now there are some best practices mm-hmm <affirmative> that can help, uh, minimize that. Uh, one is when the patient gives you a, uh, debit or credit card confirming the address connected to that card matches what you're inputting into your virtual terminal. If it matches you do get a better rate, um, again, less likely it's a fraudulent charge. Right? Right. So there are things you can do. And I just encourage everyone to make a habit of doing that. Yeah. You know, let's match the name on the card with the address, because again, if someone disputes that charge and you can show the address matches, it's more likely you can, um, you can actually win that case.
Speaker 1 00:26:39 Sure. Good. Well, Rams, it's been a great conversation with you. Thanks for
Speaker 2 00:26:44 Being, thanks for having me the
Speaker 1 00:26:45 Blast. Tell us real quick how, uh, any of our listeners can get in contact with you. Yeah. Uh, to ask questions or consider, uh, how their merchant services, uh, costs need to be evaluated.
Speaker 2 00:26:57 Yeah. Well, people can reach out to us on our website. We have a contact us, um, section or you can call us, um, we're located in Homewood, Alabama, but we have clients all over the United States. And honestly, if you just have a question about, Hey, what am I doing? Am I, am I doing best practices? We're happy to answer those questions. Okay. All right. Um, so yeah. So
Speaker 1 00:27:18 What's your website
Speaker 2 00:27:19 It's uh, HTTPS, uh, calling back slash it's secure now. That's right. Uh, it's I N N B I L l.com. Very good. Uh, so in bill.com. All
Speaker 1 00:27:31 Right. Super well, thank you. Uh, again, Ramsey for being with us, uh, to all of our listeners, uh, and the participants on our, uh, revenue radio. We, we thank you for your time being with us today and we hope you've, uh, learned a few pointers on maximizing your revenue and your medical practice. So again, this is Jeff dance, uh, executive director CAOU healthcare solutions. Uh, we, uh, are glad that you're on our revenue radio. That's powered by CAOU and CAOU healthcare solutions where we enhance the business of medicine. Thank you, and have a great day.
