Long-term care providers switching to direct deposit by March

by | Aug 31, 2012

From: Healthcare Finance News

Between now and March 1, 2013, everyone receiving federal benefits, such as Social Security or Veterans Administration payments, will get their payments via direct deposit rather than by paper check.

New federal benefits enrollees since May 1, 2011 have already been enrolled in electronic payments, but older enrollees who haven’t already opted in to electronic payment – the paper check hold outs – will have to chose either direct deposit or a debit card program established for the purpose to receive their payments electronically beginning next year. The federal government estimates that the conversion to electronic payments will save taxpayers $1 billion over 10 years.

Nursing homes and other long-term care facilities that frequently handle the federal benefits payments of their residents are gearing up for the transition and the Treasury Department is working with the long-term care industry to make things are as smooth as possible.

“(We’re) making a huge effort to get our skilled nursing facilities ready and to help the beneficiaries,” said Elise Smith, JD, senior vice president, finance policy and legal affairs, American Health Care Association, a member group representing long-term care providers.

“There are pitfalls. I’m not going to kid you. This thing has been to some extent more complicated than we thought, but we’re not losing a minute,” she said. “Not a minute, and neither is Treasury.”

The complications are mostly in the operational steps facilities will have to do, said Dianne De La Mare, AHCA’s vice president of legal affairs.

To smooth the transition, AHCA and the Treasury Department are teaming up to offer AHCA members a webinar in September and a session during AHCA’s October convention that will give providers a walk-through of what they need to do to manage the switch to electronic payments. Those steps also will be posted on the AHCA website.

“(Paper) check payments going to nursing facilities have long been a problem without a real convenient solution,” said Walt Henderson, program director of Go Direct, the Treasury Department’s campaign to educate folks on the transition to electronic benefits payments.

Direct deposit saves money for taxpayers, he said, is more secure than paper checks, which can be lost, misplaced or stolen, and is more efficient and cost effective for facilities. “(Direct deposit is) a win-win – for the government for reducing the number of check payments, but it hopefully (also) improves the internal processes at all of these nursing facilities,” he said.

Many of the long-term care facilities that the Go Direct call centers have heard from so far are fielding questions from mostly smaller facilities that are primarily concerned with how they reconcile the payments and how they credit the payments to the correct resident, said Matt Helfrich, a program analyst from the Treasury Department.

To get the word out and to educate long-term care facilities, the Treasury Department has been reaching out directly to long-term care facilities across the country and providing resources through its Go Direct campaign website and call centers.

Around the same time it does the webinar with AHCA, the department will begin posting on the Go Direct website a series of scenarios that detail possible situations facilities may encounter during the transition, said Helfrich.

The folks at the Go Direct call centers also are available to answer questions and even help facilities figure out who at their financial institutions they need to talk to in order to set up the proper processes, he said.

While officials at the Treasury Department and in the long-term care industry expect the transition to electronic payments to largely go smoothly, they also know there will be some initial discomfort.

“We’re so heavily regulated that nobody goes out there and welcomes yet more regulation, more operational complexity,” Smith said, “but my belief (and providers’ beliefs) about this is that once they’re through it, it will work beautifully.”

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