With payment IT, hospital reduced statement costs by half and saved $200,000 in collections fees

At Boston Children’s, end-of-day reconciliation became quicker; no more cash drawers for the front-end. The entire hour and a half or more of reconciliation at the end of day was eliminated.
By Bill Siwicki
12:24 PM
With payment IT, hospital reduced statement costs by half and saved $200,000 in collections fees

Boston Children’s Hospital.

Boston Children’s Hospital was founded in 1869 as the primary pediatric teaching hospital of Harvard Medical School. It is a worldwide leader in pediatric care and the treatment of complex diseases and conditions and is a nationally ranked hospital in 10 children’s specialties.


In 2001, the provider organization realized it was losing significant amounts of money simply because it was not collecting copays at the time of service. It decided something had to change. So it started a collection initiative and started collecting lots of cash and basic credit cards – Visa and Mastercard – during families’ visits.

The organization started with copays because everyone is pretty familiar with copays. They are very measurable because one can tell who accepted a copay.

This in itself was a big push forward, but Boston Children’s still had much work to do – it did not even take American Express at that time. And a major area that needed improvement back then was the experience for families that paid at the time of service. As Boston Children’s formed through smaller practices merging together, it had clinics operating under separate processes and procedures for payments.

"Guaranteeing a uniform payment experience across all departments and locations was a high priority in improving the payment experience at Boston Children’s, both internally and for our families."

Kevin Pawl, Boston Children’s Hospital

“We have an outpatient building, which has 12 floors on it,” said David Gates, director of the ambulatory training and technology team at Boston Children’s Hospital. “Previously, a family could have multiple services in a day on different floors. They would go to one floor and pay with Discover. Then two hours later on a different floor, they could not pay with that same Discover card. It was disparate payment processes in each area.”

From 2001 to 2006, Boston Children’s tried a few times to solve this problem. It was not until this time, as the organization started to dig into things, that it held design sessions where it consistently heard that cash was the problem.

The organization’s cashless initiative started then as a refund reduction project. It noticed that the time of service collections was generating more refunds to be sent out. It used to collect money for visits that did not have copays, then refund those payments. However, those families actually did have a balance for some kind of payment responsibility other than a copay so the organization would send a bill to them.

“Families are very involved at our organization, especially through our Family Advisory Council,” Gates explained. “One of the parents on the committee was very vocal about the negative experience with our billing and refund issues, saying to us: ‘Would you just send me the right bill, and leave me alone? I’ve got a busy life. I need the correct balance in one bill and then I need an easy way to pay.’ That feedback was very powerful and made it clear that we needed to make a change.”


First, Boston Children’s needed consistency for internal payment processes. On the backend, there were numerous merchant accounts, tax IDs and billing services associated with Boston Children’s billing, all requiring separate fees and payment devices.

“Guaranteeing a uniform payment experience across all departments and locations was a high priority in improving the payment experience at Boston Children’s, both internally and for our families,” said Kevin Pawl, senior director of patient access at Boston Children’s Hospital. “IT vendor InstaMed was selected to consolidate vendors and standardize the payment experience throughout the organization. With InstaMed, we could ensure the same experience at every point of interaction with electronic options to make a payment, including credit and debit payment cards.”

The primary tools for success for a cashless environment and better payment experience for families was InstaMed’s payment integration within the organization’s Epic EHR system, Gates explained.

"We prepared our staff to discuss payments with families, even those with multi-thousand dollars in past-due balances, with dedicated training."

David Gates, Boston Children’s Hospital

“We saw a huge opportunity with payment collections through our Welcome kiosks, which would offer a self-service option for families to view and pay balances for all of their children in one place,” he said. “We also looked to tokenized digital wallets with InstaMed as a way to go cashless. We wanted to give families the convenience of leveraging a saved payment card on file, instead of opening their wallets and taking out a card in the front office.”

The provider organization looks to InstaMed as a partner that shared its vision of a better payment experience for families, Pawl said.

“We were especially excited about the vendor’s relentless focus on future innovaion so we can stay current with ways to improve the payment experience,” he said. “Plus, the vendor has plenty of previous experience working with the unique challenges presented by children’s hospitals as nine of the top 10 children’s hospital are on the InstaMed Network.”


There is a variety of vendors of patient payment solutions on the market today. Some of these vendors include Ability Network, ClearGage, Easy Pay Solutions, Patientco, PatientPay and Patient Payment Solutions.


Having just one, consolidated vendor has helped Boston Children’s reduce the number of different statements from the organization to just two – one on the hospital side and one on the professional side. There are just two phone numbers for families to call for payment questions, versus closer to 20 before. Now, whether it’s American Express or Apple Pay, families can use their preferred payment method at all of our stations.

“The Welcome kiosks are the most popular payment methods,” Gates reported. “Families really like having the option to view and pay all of their balances upfront. When the kiosks were offline for a few days in one of our locations, families were actually upset that they couldn’t pay that way. In fact, the first day that we turned the kiosks on, we received a $5,000 payment on a past due balance. It was amazing that we were able to capture that payment without any additional effort.”

The provider organization started tokenized digital wallets recently. In a limited amount of time, it has more than 4,000 tokens that have been created.

“So anytime the family comes back to the front desk, they don’t need to take out a card,” Gates explained. “They don’t have to do anything. We just say: ‘Hey, would you like to use the same card that you used last time?’ When we implemented Epic MyChart with the InstaMed External Payment Page functionality, we expected to see an increase in the number of tokens generated by patient and families. We were pleasantly surprised to have those expectations dramatically exceeded.”


After Boston Children’s went live, end-of-day reconciliation became quicker. No more cash drawers for the front-end. It is just a reconciliation report from InstaMed against a reconciliation report from Epic, and the accounting department takes care of it.

The entire hour and a half or more of reconciliation at the end of day was eliminated. The organization was paying overtime for employees to stay late and balance their cash drawers. Now, almost everything closes out in an automated fashion at the end of the day. It’s hard to quantify the return on investment for that automation, but it’s definitely a significant cost saver, Gates said.

“The other big deal was in the previous system, you’d key the $35 into the device and then you’d have to key 35 in Epic,” Pawl explained. “What if someone interrupts you and you don’t key it correctly? We had an accountant working tirelessly on end-of-day reconciliation and would take weeks to figure out. We have actually re-tasked that accountant to do more value-add work. That was a huge benefit.”

Boston Children’s is seeing a significant increase in the number of payments collected at the time of service because of the cashless initiative and payment options with InstaMed, Gates said. In fact, 80% of payments are captured during the visit. The results from these collection efforts are significant, Gates added:

  • First, fewer statements are mailed to families. The organization is capturing payments in the office, so there is no need for follow-up. Staff estimates that it has reduced statement costs by half.
  • Second, the organization has stopped the loss of money due to missed opportunities to collect. This has allowed it to keep the lights on and remain independent.
  • Third, the organization has seen a 17% drop in refunds.
  • And fourth, the organization is not required to send families to a collections agency for missing payments. It has saved about $200,000 since implementing InstaMed just in fees that the agency would charge.

“During our initial design sessions, we heard about procedures that were not compliant, not safe and not secure,” Pawl remembered. “We eliminated those risky processes when we partnered with InstaMed. We can now trust that every healthcare payment is secure and compliant. We have achieved a 99% reduction in security and compliance risks.”


“It might seem scary to remove a payment option from patients by going cashless,” Pawl observed. “Surprisingly, it has not been too much of an issue for our organization as we communicate with families ahead of time. When you get that appointment reminder, you’re also getting the language that we don’t take cash. We do have a central cashier for families that insist on paying cash, but it is rarely utilized.”

It’s important to analyze time of service payments to truly understand preferences, Gates advised.

“When we did an analysis, under 10% of payments were cash,” he said. “Of the 10% of payments that were cash, 80% were from families who had paid with a check or credit card in the past. We knew that as long as we had strong communications and education for families that it would be well received.”

One of the other big things that Boston Children’s had to do in order to go cashless and improve its copays was training, he added. Staff knew it had to set itself up for success and empower staff to effectively use the new payment technology.

“People don’t like to ask for money, especially large past-due balances,” Gates said. “We prepared our staff to discuss payments with families, even those with multi-thousand dollars in past-due balances, with dedicated training. We made it an interactive computer-based learning experience where you are actually in the system and pressing the buttons. The systems tell you whether you are pressing the right buttons or the wrong buttons and scores you.”

When the organization looked at the areas that were having problems, there was a direct correlation to the areas that hadn’t taken the training, Pawl said. The organization is finding that in the areas that did take the training, the collections are going up and there are not issues. So the organization made the move to make the training mandatory.

“The change management, organizational culture is a huge passion of mine and to really get people to buy into this, we didn’t want to have a punitive system,” Pawl explained. “We wanted to celebrate successes. We use a high-reliability system at the hospital with a lot of daily huddles. David and I try to keep it fun. We want people to be engaged and we want them to be involved.”

For example, one of the departments hit 100% collections for three days in a row, so management promoted their achievement on the internal web page.

“They were so proud and felt like superstars,” Pawl recalled. “We got so many calls after that asking how other departments could get on that page as well. We were happy to share that department’s simple recipe for success was just asking a second time for the payment while being polite but firm about the request.”

Twitter: @SiwickiHealthIT
Email the writer: bill.siwicki@himssmedia.com
Healthcare IT News is a HIMSS Media publication.

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