How Federal Agencies Can Reap the Benefits of Secure Payments

According to a recent Government Accountability Office report, federal agencies made $132 billion in improper payments in 2015. Improper payments can crop up for a variety of reasons, including incorrectly submitted paperwork and fraud. These issues can be challenging to detect during the payment process and may become known only after a payment is made.

Ensuring the payment process is accurate upfront will help eliminate payment issues down the road. Agencies can avoid the expense of recouping previous payments by ensuring upfront edits and prepayment reviews are conducted. The paying agency essentially wants to make sure payments are being issued properly, and that they are earned and accurate.

Simplifying Through Standardization
“An enterprise-level or more standardized payment process can simplify the payment experience for those payees,” said Jared Griep, Program Director at National Government Services, a contractor currently facilitating a range of financial solutions for federal health agencies, including The Centers for Medicare & Medicaid Services (CMS). “Continued standardization of payment processes across agencies plays a big role in shaping the payment arena in the future.”

Federal agencies have been moving from paper-based processes to more efficient and secure electronic payments for several years. For example, in 2011, CMS implemented a Medicare enrollment revalidation process for the health care providers that submit claims to the agency — the physicians, hospitals and affordable care organizations.

As part of the revalidation process, providers agreed to receive electronic fund transfer (EFT) payments instead of paper checks. The revalidation effort rolled out in a variety of phases, and with each phase more providers came on board to receive EFT payments. Essentially, the move away from paper checks provides a faster and more secure method for CMS to pay the providers and for those providers to receive payments.

Electronic Payments: Increasing Ease, But Still Room for Improvement
As electronic payments become the norm throughout the federal government, there is a need to standardize payment processes across agencies. Many federal agencies have different contractors or groups issuing payments to the agencies’ varied business partners and vendors.

Often, these contractors issue payments at different times, provide different information supporting those payments, and use different payment platforms and processes, as well. So, it is not uncommon for a single payee to receive numerous payments with a variety of supporting information attached to that payment.

Standardization of payment platforms, payment processes and policies could go a long way in helping agencies reap the benefits of a secure payment platform, which includes:

• Reduced debt and cost savings via workload avoidance, which focuses on the processes and controls that ensure payments are accurate upfront to avoid the expenses and work of recouping payments later.
• Elimination of fraud, waste and abuse.
• More secure transactions.

The Next Evolution of Secure Payment Systems: Blockchain
In looking to the future, how can payments become even more secure and reliable, especially in an era of prolific hackers? Blockchain technology — a digitized, distributed ledger of all cryptocurrency transactions, offers huge benefits to enhance the security of payment systems for health care and other fields.

“Blockchain is a distributed ledger shared by all stakeholders in a network,” said Robert Padget, member of the Program Quality and Control Team at National Government Services. “Due to its structure, blockchain eliminates the need for a trusted third party to approve transactions or events occurring on the blockchain.”

Stakeholders trust the blockchain, which has the trust protocol built into it through timestamping of events and network consensus, Padget explained. By eliminating the third party, it makes it more difficult for a single point in the network to be hacked or compromised. Additionally, transactions — which are secure and completed in real time — on the blockchain are more auditable because the transaction ledger is shared by all the stakeholders, and issues can be easily identified.

While technologies such as blockchain are in their early phase, it is important to explore them to evolve methods for accurately making and receiving secure payments. They have the potential to greatly protect taxpayer dollars while reducing administrative burden on correcting improper payments.

About National Government Services
For more than 50 years, National Government Services and its predecessor companies have been a trusted partner and innovative leader in federal health care contracting. As a Medicare contractor with CMS, National Government Services processes more than 230 million Medicare claims and administers benefits of approximately $77 billion from the Medicare Trust Fund annually.

Learn more about their work. 

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