Academic journal article ABA Banking Journal

Bank Plan Streamlines Health Care Payments

Academic journal article ABA Banking Journal

Bank Plan Streamlines Health Care Payments

Article excerpt

This month, Liberty National Bancorp, Louisville, Ky., is piloting a health care insurance payment idea that takes advantage of an existing computer network.

The network, run since the 1970s by Medical Management Resources, Louisville, connects Blue Cross & Blue Shield of Kentucky to about 4,000 doctors and 119 hospitals. Liberty National Ban. corp ($4.3 billion in assets) is offering a funding option to patients through the network that is designed to pay their out-of-pocket expenses, pro vide fee income and new customers to the bank, streamline medical bills, save hospitals and. doctors the trouble of billing and collecting, and give insurers an extra service they can pitch to prospective clients.

When Blue Cross approaches a group of employees to offer them coverage, it offers them a credit line from Liberty National to pay their deductibles or copayments. If the employee elects it, the bank opens a $300 30-day revolving line of credit for the person. (The credit line can be increased, but a credit check must be performed first.) The employee is charged no interest or fees for this account until he or she incurs an expense and fails to pay in full within the 30day grace period. In that case, the interest rate that will be charged is prime plus 6% for balances of less than $1,000 and prime plus 5% for balances of over $1,000.

When the employee receives medical treatment, the doctor or hospital tells the insurance company how much it cost, electronically through the network (or by phone if the health care provider is not part of the network). The insurer processes the claim, pays its share of the bill, and tells the bank what the employee owes, through the electronic network. …

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