Protecting Healthcare Finances: Why AP Automation is Crucial in the Fight Against ACH and Check Fraud
In today’s rapidly evolving healthcare landscape, marked by ever-increasing pressures and limited resources, healthcare organizations are turning to automation to streamline their operations. From cutting-edge clinical applications like robotic-assisted surgery to transforming back-office functions, automation is the key to enhancing efficiency and ensuring the industry’s long-term viability.
One area that demands immediate attention in healthcare finance is Accounts Payable (AP). Manual processes, prone to errors and fraud, can cripple an organization’s financial health. The rising threat of ACH and check fraud in healthcare is inevitable and automation is the solution healthcare providers urgently need.
The Growing Threat of Fraud in Healthcare
Healthcare transactions often involve high-dollar invoices, making the industry an attractive target for fraudsters. There has been a surge in fraud attempts across the board, with two primary forms standing out: fake invoices and vendor impersonation.
On the other hand, preventing vendor impersonation requires heightened vigilance. Finance departments are increasingly targeted by organized crime syndicates using tactics like business email compromise and social engineering. These sophisticated criminals impersonate vendors, convince healthcare organizations to change payment methods, and ultimately divert funds to the wrong recipients. Staying vigilant, avoiding phishing attempts, verifying email sources, and confirming changes via phone are critical steps in preventing such fraud. Automating AP processes provides an additional layer of defense.
The Vulnerability of Checks in Healthcare
Checks, although on the decline, remain the most vulnerable payment method to fraud. Their decreasing use has made them more vulnerable to fraud, with mail theft and check modification becoming increasingly common. In 2022, 63% of companies using checks experienced real or attempted fraud1. Fraudsters are adept at altering existing checks, changing payees’ names, and altering the amounts.
Positive Pay is the most widely used solution to combat check and ACH fraud1. This solution empowers organizations to pre-authorize checks, including specific amounts and check numbers, reducing criminals’ ability to tamper with payments. Payee Positive Pay, which also matches the name of the individual or the organization that the payment is meant to go to, is also provided by Paymerang.
One of the key advantages of Positive Pay is the ability to reconcile accounts daily, automating the process and swiftly identifying any discrepancies or fraud attempts. By moving decision-making and research closer to individual corporate or business entities, financial institutions can provide more tailored protection against fraud.
Conclusion: The Imperative of AP Automation
In an era of profound change and financial uncertainty, healthcare organizations cannot afford to overlook the mounting threat of ACH and check fraud. Automation, especially in Accounts Payable, emerges as a critical tool in the fight against fraud.
As healthcare continues its rapid transformation, embracing AP automation not only ensures timely and accurate payments but also frees up vital resources for high-dollar areas like the revenue cycle. It’s time for healthcare providers to make the shift towards automation, protecting their finances, and securing the future of patient care. In a world where checks are still relevant but vulnerable, healthcare organizations must stay ahead of the curve with the right tools and strategies.
Sources:
2023 AFP Payments Fraud and Control Survey
