February 22, 2007

As part of a larger strategy to leverage its payments expertise in the healthcare industry, JPMorgan Chase (New York; $1.2 trillion in assets) acquired FisaCure (Carrollton, Texas), a provider of electronic remittance services for Healthcare Insurance Portability and Accountability Act (HIPAA)-compliant transaction sets. FisaCure's technology will be integrated with the bank's Healthcare Solutions unit, which is part of the firm's treasury management business.

"Banks are uniquely positioned to add value to the claims submission process," says Alberto Casas, VP of JPMorgan Chase Healthcare Solutions. "They are the first point of contact for both information and payment. We receive both and are able to reconcile both for clients. At JPMorgan Chase, we want to create a value chain solution for the entire process -- from the point of interaction at the patient end through submission of that claim."

JPMorgan Chase offers healthcare solutions, such as health savings accounts (HSAs) and payments processing, through the Healthcare Solutions unit, which was formed in 2006. Casas says, however, that FisaCure's technology will deliver value to the bank's healthcare clients, which he declines to name. According to Casas, the acquisition gives JPMorgan Chase an opportunity to bring more efficiency to healthcare.

Although there is some automation regarding the exchange of data among healthcare providers and insurers for reimbursement, Casas explains, the process still is largely paper-based. "What's not automated is the actual payment on the payer side and the reimbursement on the provider side," he contends. "The biggest challenge is that every insurer has its own format and rules, so it's difficult to automate this."

Although HIPAA was enacted in 1996 to help promote standards in the healthcare industry with regard to the sharing of data (in addition to the privacy protections it provides), it has been a challenge to implement standards since many payers have multiple legacy systems with which they handle payments, according to Casas. As a result, getting the industry to embrace e-payments has been an uphill battle, he says.

According to Nancy Atkinson, a senior analyst with Aite Group (Boston), consumer-directed healthcare solutions are introducing more complexity into healthcare. As a result, "the claims and reimbursement processes become even more complex," she said in a release. "Providers, such as doctors and hospitals, are facing greater burdens with determining the expected source of funds (patient or insurance) and ensuring that their collections have been handled correctly. Automation of these processes is very valuable in terms of compliance, accuracy and the ability to reduce staff administrative levels."

Automating Claims Processing

This is where FisaCure's expertise comes in. The firm's technology, which powers JPMorgan Chase's Healthcare Link claims processing product, sends transaction data in a format that allows providers to auto-post the information to their practice management systems, according to Casas. The solution digitizes paper, such as checks and explanation of benefits (EOB) statements, using intelligent character recognition technology, he continues, noting that the company created a library of hundreds of templates that can distinguish among various insurance providers' claims forms.

"It knows where to look for data on these forms, and it reconciles what's submitted from what's received," relates Casas. The system takes the image of the EOB and check, lifts the data and develops custom rules specific to each provider's practice management system, he explains. It then sends the transaction to the provider in a format the insurer's systems can read.

JPMorgan Chase first partnered with FisaCure in 2006, when it private labeled the FisaCure service and rolled it out on the provider side to help facilitate automation. The next step will be to get the payers on board with electronification, Casas relates. "We ultimately want to create simplification in the industry on both sides," he says, claiming that providers are "migrating to electronification at a more rapid pace now than they would have on their own."

"JPMorgan Chase is taking a powerful step toward meeting the specific payments and remittance processing needs of the healthcare industry," according to the statement from Aite's Atkinson.

FisaCure employees will be moved to a JPMorgan Chase facility in Dallas. **--Maria Bruno-Britz

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