The world of telemedicine has a transformed from a basic service used in a few medical facilities to a wide-spread, complex technological industry that touches virtually every aspect of healthcare. Like other industries that have ballooned so quickly, widespread growth generated more participants, more money and more risk.
As a result, telemedicine has found itself often being classified as high risk in the world of payments processing. To gain a better understanding of how telemedicine landed in the same type of category often associated with activities tied to illicit goods/services, it’s important to gain a better grasp of the question, “What is telemedicine?”, which includes taking a deeper look into the industry’s transformation.
What is Telemedicine?
In its most basic sense, telemedicine involves diagnosing and treating patients via remote technology. Of course, the regulations over how this industry must function makes it a bit more complex. Thanks to innovation in telecommunications that have enabled medical professionals to connect with patients on a global scale with a basic web camera and the tap of a button on a computer screen, face-to-face interactions have become seamless. With more technology, however, brings more features to incorporate. This includes payment processing — but we’ll get to that aspect later.
The telemedicine industry has changed how doctors are able to interact with their patients, leverage medical devices to gain diagnoses from a remote location and serve people without having to have a physical office. Technological advancements have created a new industry in which patients can now interact and get real-time help from their doctors without stepping out of their house. From basic blood pressure checks to infections, this has been a game-changer for the doctor-patient relationship.
Why Telemedicine is Growing Rapidly
Now that we’ve covered “what is telemedicine?” we can dig a bit deeper into why this industry is so impactful — and why it’s gaining in popularity. This growth can be attributed to the convenience of more accessible healthcare for more patients. While telemedicine was initially created to fill healthcare gaps around the world, and to serve patients who otherwise wouldn’t be able to visit a traditional doctor’s office — the industry has evolved into a perk for everyday consumers.
Healthcare, in general, has become roughly a $3 trillion industry in the U.S. alone. To help streamline many of the avoidable costs associated with providing good medical care to those who need quicker access, telemedicine has been able to alleviate many of the friction points of traditional healthcare. From reducing ER visits and extra trips to the doctor to having more doctors on-staff in physical offices, the efficiency benefits alone of telemedicine has helped propel its growth.
Instead of having to visit multiple locations for various specialties, telemedicine can connect doctors and patients together to determine what the best steps are before involving unnecessary, expensive visits to multiple doctors. For patients who need regular care for a specific service, telemedicine can add efficiencies to the process by offering the chance for regular checkups via camera meetings to keep care consistent without adding in the burden of either party having to be at a specific physical location. This can increase patient engagement, provide better care and expand access.
Of course, with industry as complicated as medicine there are some cons to replacing the physical interactions between doctors and patients. Every technology comes with a learning curve, and this can complicate the relationship. The medical professionals need to be properly trained on the equipment need to run a telemedicine practice, and patients also need to understand how to use the same devices.
More technology can also remove barriers that sometimes provide necessary benefits in the doctor-patient relationship. Having the ability to quickly log onto an online system and request a doctor consult is much easier than making a visit to an office. This may trigger unnecessary appointments between patients and doctors who have no real sense of what is actually needed for a specific medical condition. Having less in-person visits isn’t always the best solution for making an accurate diagnosis. This is where doctors and their patients must determine the cost-benefit analysis of eliminating physical visits.
Why Telemedicine is Classified in the High Risk Payments Processing Category
Understanding the concept of “what is telemedicine” and why the industry is growing also should incorporate the other key element of the equation: The payment. When not properly managed, this can be another complicated aspect of the industry. This is also why telemedicine practices often find themselves being labeled “high risk” when it comes to collecting and processing payments.
Medical payments alone can be complicated. Add in more technology and non-traditional medical communications between doctors and patients and the question of who pays for what, and when, becomes one that everyone involved in the equation wants to know. This includes the medical group that will be collecting and processing the payment, the insurance company (or Medicare/Medicaid) covering the service, and the patient who may be footing the bill. Since medical bills have a greater chance of being left unpaid, disputed, or more susceptible to outside fraud threats, this creates a few more complexities to consider.
High risk payments are typically reserved for services that might have more fraud associated with them. This includes things like gambling services, telemarketing, pharmaceuticals, travel, legal services, dating services, computer software, credit repair services, electronics, financial investment services, etc. Medical services — particularly those being provided via remote technology — are also increasingly falling into this category since there are more variables that can lead to payment disputes.
A high risk status is typically assigned to a business where their monthly processing amounts vary drastically. Medical services are unpredictable and can produce very busy months, and very slow months — depending on the type of specialty. With more chances for transaction disputes to occur, this can open up risks for banks and credit card processors, as well as the medical practice themselves.
Location can also create a greater payment risk. As mentioned above, Telemedical practices increase access to medicine since it can allow doctors to work across borders to provide greater medical care to areas lacking necessary options. This can open a business up to needing to process payments in multiple currencies. There is more likely to be fraud when dealing with multiple currencies, specifically when conducting business cross-border — especially outside regions like the U.S., Canada, Western/Northern Europe, Japan or Australia.
The other reason for the high risk classification of telemedicine services comes down to the simple question of who is going to foot the bill — and how is it going to be paid. Unlike a traditional office setting where the logistics of payment processing is typically done in-office, or through a regular billing system, telemedicine isn’t always as simple.
From an insurance standpoint, it can be more difficult to assess how to cover certain appointments since they don’t fall into the typical office visit. The same goes for coverage by Medicare and Medicaid, which varies so much for each individual patient, depending on where they live. Private payers and insurance companies have begun to warm up to the idea of covering telemedicine practices as a method to save costs and serve more patients, but there are still some logistical messes that can arise when insurance doesn’t want to cover a specific service. This leaves the patient in charge of the bill, which may lead to more payment disputes.
The best way for any telemedicine practice to avoid this complexity? Find a high-risk credit card processing provider that understands the nuances associated with this ever-changing industry. A partner that has established relationships with financial institutions can manage the risk associated with telemedicine bills and offer a stable high risk merchant account solution. Technology has innovated the medical field, and luckily the world of payment processing has kept up with the demand. The trick to keeping up is knowing which partners are equipped to manage a business that is constantly evolving.
Anna Kragie is a content contributor for SMB Global. She previously wrote for PYMNTS.com, as a Sr. Content Producer, where she focused on financial services and payments innovation, fraud and security, emerging payments, and FinTech news, research and thought-leadership content across the payments industry.