Modernizing Healthcare Payment Solutions: A Guide to Digital Options

It's time for digital healthcare payment solutions to become the new standard practice for the industry, driving operational efficiency and patient satisfaction. 68% of payers still use paper checks to reimburse healthcare providers, and 50% of providers do the same when refunding patients, according to recent findings from J.P. Morgan. But the majority of patients prefer digital methods to traditional checks, and over 75% of participants in Onbe's healthcare payments survey said an improved payment or refund process would positively impact their overall experience with their healthcare provider.

For healthcare organizations, switching to a modern solution can help reduce costs and errors, improve revenue cycle efficiency and provide ease and transparency during what may be a stressful time for many patients. As providers seek ways to innovate while contending with rising costs and staff shortages, digital payment flows offer a promising solution to the notorious complexity of legacy processes.

The State of Healthcare Payments

Healthcare payment processing involves many complex components, including navigating insurance, determining patient cost-sharing and issuing prompt refunds for overpayments. These challenges ramp up the pressure on healthcare practices, which face growing expenses amid lower reimbursement rates and increasing administrative burden:

Regulatory risk - The complexity of regulatory compliance may lead to high costs and risk for providers. For instance, HIPAA, PCI DSS and state privacy laws have strict protocols for handling patient financial information. Noncompliance can lead to steep fines, legal penalties and reputational damage.

Transparency - Only 22% of patients said they know how much they'll owe for a provider visit before the encounter,", according to the J.P. Morgan research. In Onbe's healthcare survey, over half of respondents reported receiving a refund check from their healthcare provider and being unsure why they were getting it. Increasing transparency around cost responsibilities and providing clear communications when a patient is owed a refund can help prevent financial stress and past-due balances as well as reduce customer service calls and unclaimed refunds.

High costs - Healthcare organizations and medical practices face steep administrative costs when accepting and issuing payments. When patients are owed refunds following overpayment or adjustment by the insurance company, providers typically spend $7 or more per paper check, according to Onbe data, with the greatest expenses coming from exception handling and escheatment management. Switching to digital solutions can help streamline and automate these burdensome processes, dramatically reducing costs.

Meeting patient preferences - J.P. Morgan found that 62% of consumers want to pay their medical bills online—and the majority of those under 35 say they would switch providers for a better payment experience. By supporting multiple healthcare payment options, including credit cards, debit cards, and mobile wallets like Google Pay and Apple Pay, healthcare providers can modernize their offerings and improve patient financial engagement. The same goes when issuing healthcare refunds, with patients preferring options such as direct deposit, PayPal, Venmo and virtual cards, according to Onbe's research.

Benefits of Digital Healthcare Payment Processing

Digital solutions streamline patients' payment experiences from start to finish, providing a convenient way for consumers to pay their bills and access refunds when necessary. Greater convenience means happier patients, leading to improved satisfaction scores and retention.

By streamlining their payment systems, medical practices can improve collections, reduce bad debt and accelerate cash flow, which in turn helps to optimize the revenue cycle. Automating payment flows also alleviates operational burden by reducing the manual touches required to accept or issue funds. A digital-first patient refund solution replaces labor-intensive paper checks with faster, more efficient payouts that are easy to track and spend. Digital refunds typically have a higher delivery rate, reducing exception handling, customer service calls and the burden of unclaimed property management.

Features of Patient Refund Solution

Patients' expectations for more seamless refund experiences track with a general rise in digital payment usage. For instance, Onbe and NRG's 2025 Payouts Landscape Report found that 70% of Americans now use mobile wallets weekly, and peer-to-peer apps such as Venmo have become more popular than ever. Consumers can enjoy conveniences such as buying groceries with a tap or reimbursing a friend without having to exchange cash. They want the same convenience when receiving payments, too.

Patient refund platforms enable providers to issue payouts quickly and securely following patient over payment, medical billing errors, duplicated payments, adjustment by the insurance company and other common scenarios. Besides improving patient satisfaction, these platforms help providers stay compliant by issuing refunds within the timelines mandated by state laws. A refund solution typically includes the following features to enable fast, efficient payments:

Payment Choice

Patient preferences vary widely, so offering multiple payment methods can help to meet everyone's needs and degree of financial inclusion. Virtual and physical cards, mobile wallets and payment apps are some popular options a refund platform may support.

Built-in Security

Up-to-date fraud monitoring and prevention measures protect healthcare practices and keep refunds secure without compromising the patient experience. Data encryption and PCI DSS compliance are crucial for ensuring the security of sensitive payment data.

Unclaimed Property Management

If unclaimed, refunds are subject to escheatment, the act of transferring unclaimed property to the state. Healthcare organizations must follow state laws to escheat abandoned funds, including performing due diligence to locate the owner, if possible. Switching to a digital solution can help to alleviate this administrative burden, both by improving delivery rates to reduce unclaimed property and by automating the escheatment process to save time for busy teams.

Dedicated Support

Providing refund-related customer service can be cost- and labor-intensive for healthcare providers. Payment platforms can not only help to reduce customer queries and complaints by making the refund process more convenient and intuitive, but in many cases, dedicated 24/7 support is part of the service offering.

Refund providers also have resources, tools and ongoing training and education to help healthcare organizations improve the patient experience and reduce payment costs.

Embracing the Future of Digital Healthcare Payments

Evolving healthcare payment trends reveal that even though high costs create stress for patients and providers, alike, the process of financing necessary care doesn't have to add to the anxiety.

Digital modernization offers providers a path to dramatically reduce the administrative costs and burden of healthcare payments, streamline business operations and accelerate revenue cycle management. Making the switch to digital payment and refund solutions also enables providers to improve patient financial engagement and reduce friction during the payment experience, increasing satisfaction and retention.

After all, the last thing patients should have to worry about is missing a bill, feeling confused about what they owe, or waiting too long for an overpayment refund from their healthcare provider. Today's solutions help to eliminate those concerns, so patients can enjoy peace of mind and providers are free to focus on what matters most: delivering the best possible care.  

Learn more about Onbe's healthcare payment solutions.