One way healthcare providers increase medical billing collections is by allowing multiple payment options, including credit cards. But it's important that medical billing professionals understand credit card fraud and know how to prevent it. Credit card fraud costs credit card issuers millions of dollars each year, because consumers generally aren't responsible for fraudulent use of their cards.
Currently, nearly half of the credit card fraud in the world takes place in the United States, despite only one-quarter of worldwide credit card transactions taking place in the US. Naturally, card issuers want to reduce credit card fraud, and no business wants its name associated with credit card fraud, even if it was a victim and not involved in the fraud scheme.
Reducing Credit Card Fraud in Face-to-Face Transactions
Your medical billing personnel can take steps to reduce credit card fraud when patients pay in person with a credit card. They can look for security features on credit cards such as a hologram, matching print and embossing, and a valid expiration date.
They can also compare a patient's signature with that on the back of the card and should report any problems with card readers right away. Medical billing personnel can ask for a "Code 10 authorization" with their payment processor if they suspect fraud. This does not alert the customer and is done through interactive phone prompts.
Reducing Credit Card Fraud in Phone Transactions
When your practice accepts credit card payments by phone, it incurs some additional risks. Someone could, for instance, give you the number of a stolen credit card. That's one reason why processing fees are higher when you accept credit cards by phone. It's essential that if your medical billing personnel take credit cards by phone you have a secure point of sale system installed by a reputable operator.
Every time someone collects a payment via credit card by phone, they should follow all of your payment processor's security guidelines for validating transactions. If you don't follow these security guidelines, your practice could be held responsible for costs associated with fraudulent transactions.
What to Do if a Breach Occurs
If a credit card breach occurs despite your precautions, it's critical that you deal with it immediately. You will need detailed credit card sales records to refer to when you retrace steps to help determine when and where the breach took place so you can limit the potential for more losses.
Even if you track down the problem quickly, you will likely have to do some damage control. This means alerting potentially affected customers to keep an eye out for unusual activity on their card and report it to their card issuer immediately.
Chip Card Acceptance: What It May Mean for Your Practice
One reason such a high proportion of credit card fraud happens in the US is that it's the only major country that hasn't switched to chip-and-PIN cards. Starting in October, businesses that take credit cards are required to install processors capable of processing chip cards for in-person transactions, or else face potential liability for fraudulent chip card transactions. Currently, banks absorb those costs.
Switching to a so-called EMV card reader, which can process chip cards, will ensure that your practice will not be on the hook for fraudulent chip card purchases. The chip card offers much more security, however, because it creates a unique numeric approval code each time it is used, making it much harder to copy or counterfeit. In Canada, debit card fraud dropped an astonishing 73% since the 2011 implementation of the EMV card system.
Some consumer advocates say that credit cards are often a better choice over a debit card, regardless of whether they have a chip.
Implementing a credit card on file policy at your practice could help prevent fraudulent card acitivities while also increasing your patient pay rate. Credit card on file makes it easy for patients to pay medical bills and eliminates sending costly, and often uselss, statements to patients.
Conclusion
Accurate and successful medical billing requires that your practice accept multiple payment forms, including credit cards. At the same time it's essential that your practice comply with all industry regulations so your patients can be confident of the security of their transactions with you.
That means, for example, when you accept credit card payments by phone, you must follow all necessary steps your payment processor requires to confirm validity of the card. Otherwise you could be liable for fraudulent charges. Switching to a point of sale system that accepts chip cards as soon as is reasonable is another important step in combating fraud.
GroupOne Health Source focuses on the business side of healthcare practices to increase collections, reduce risk, and most importantly, allow practices to focus more on their patients. We offer extensive expertise on every aspect of the healthcare revenue cycle, particularly for practices that use electronic health records. Schedule a live RCM demo to learn more about GroupOne's revenue cycle management services and how you can get started with a credit card on file program.
