Paper refunds- a frustrating relic with new improvements: How automation boosts patient experience + provider efficiency

Patient refunds from providers are on the rise. Unfortunately, refund processes tend to be manual, complex and time-consuming for both providers and patients alike, with traditional paper-based methods no longer matching the needs of consumers.

As the number of patients paying out of pocket for healthcare services grows, refunds are taking on even greater importance. Patients often have multiple provider encounters that involve selfpay. Ensuring those dollars are posted accurately and appropriately is important in the provider’s relationship with the patient and in the patient’s overall journey and experience.

While many providers attempt to collect balances due upfront to relieve the difficulty and stress of collections post-service, the estimates that are available upfront, ahead of service or at the time of service aren’t always accurate based on which provider is paid first in the line of claim submissions.

Becker’s Healthcare recently spoke with Sue Martin, senior vice president of healthcare specialty services for CommerceHealthcare®, about the burdensome nature of patient refunds. She shared how electronic refunds can benefit key stakeholders in healthcare.

 “People must advocate for themselves,” Martin said. “That means keeping up with appropriate insurance payments, as well as tracking where their self-pay dollars are being applied and where they may be entitled to refunds.”

The traditional paper-based refund process has significant drawbacks. For providers, paper-based processes are inefficient, take more time and require additional labor. These antiquated processes are even more problematic as providers struggle with labor shortages and narrow margins in today’s worsening economic climate

Paper-based processes also are not ideal for patients, especially in an environment where so many consumers engage in online banking due to the convenience. It can be time-consuming to receive refund checks via the mail, and the traditional bank deposit process takes extra time. In addition, paper checks are prone to getting lost. Patient addresses change frequently — especially with the recent increase of hybrid and remote work — which can lead to untimely mail delivery, lost checks, fraud and the cost of reissuance.

“We hear about these challenges on a regular basis from clients,” Martin said.

Technology offers refund transparency and efficiency

In reflecting on the many issues associated with the traditional paper-based refund process, Martin offered a silver lining: current technology can address these challenges.

Thanks to technological advances, it’s now possible to offer greater transparency about refunds to providers, payers and patients. CommerceHealthcare® offers its PreferPay® solution, for example, which is a secure, end-to-end automated refund process that integrates with provider solutions.

PreferPay® supports a variety of payment options including direct debit cards, direct deposit to a bank account and traditional paper checks. Offering multiple refund options is a huge step forward that improves providers’ patient satisfaction scores.

“Consumers are looking for the same experience in healthcare as they have with their banking and shopping partners,” Martin said. “Today, patients often have to wait for a paper refund check to arrive in the mail from their providers. With PreferPay®, they can get the funds owed to them in as little as 30 minutes

Providers are seeking more streamlined refund process

Healthcare organizations of all sizes face challenges in processing patient refunds. Manual, paper-based systems commonly require multiple solutions and multiple departments to complete the entire process. Another major concern is the effort associated with escheatment of unclaimed funds. This is yet another set of tasks facing an already overburdened, understaffed workforce.

Transitioning away from paper processes makes sense, but it’s important to work with a trusted partner. “You want all the departments involved in the refund process to experience seamless workflows,” Martin said. “CommerceHealthcare® works with providers to implement best practices and ultimately migrate to fully digital patient refund functionality.”

Initially, providers may default to traditional check payments for refunds. Over time, however, as more information is obtained — like patients’ mobile phone numbers and email addresses — the system can increase the level of automation and the number of paper refund checks can be reduced. “This enables our clients to fully transition the patient refund process and offer a true end-to-end solution, which includes escheatments for any unclaimed funds,” Martin said.

Getting started on the electronic refund journey

A current-state review is a good first step on the transition to electronic patient refunds. It’s important to understand the true costs associated with issuing a paper check. Martin recommended tracking the costs surrounding check stock, printing and postage, as well as team member time spent processing the checks and following up, which should shed light on potential for return on investment.

Another best practice is to look for a partner and a solution that will work easily with the organization’s treasury and receivables teams. Refunds routinely require processing from both accounts receivable and accounts payable for authorization and issuance of payments. These departments also need a workflow for tracking unclaimed payments.

“Healthcare providers need a patient refund solution that streamlines these processes and reduces the burden, once a payment authorization file has been issued,” Martin said.

Automated payment solutions can deliver value beyond patient refunds

In addition to processing patient refunds, PreferPay® can also streamline process flows that are critical to a strong employee value proposition. For example, Martin explained how the organization helps HR departments by focusing on frequency of employee payments.

“We’ve instituted workflows learned from other industries to drive better employee recruitment, retention and overall employee satisfaction,” Martin said.

Automated payments also can be useful in areas like clinical trials and contract workers. PreferPay® can be applied to other use cases, and it’s not a heavy lift — the workflows are similar, even if the parties receiving the payment are different. “Take the automation and think bigger with it,” Martin said. “You’ll find it to be a true success.”


With all the priorities that exist throughout the revenue cycle and accounts payable departments, healthcare providers recognize that automating patient refunds makes sense. It improves efficiency, decreases costs and helps offset growing workforce concerns. Offering automated refund options with faster turnaround times is also satisfying to consumers; it improves the patient journey and financial experience by getting patients the money they are owed in a faster, more convenient manner.

“Implementing technology and automating refund processes that align with consumer preferences is absolutely a win-win for healthcare providers,” Martin said. “Find a financial partner that offers a full suite of end-user and consumer satisfaction choices. If you make patients and your employees happy, you will find good success in the marketplace.” 

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