Urgent message: As a growing number of retail businesses go cashless in an effort to cut overhead and provide faster and more seamless service, urgent care may likewise need to consider the pros and cons of an entirely cashless service model.
Alan A. Ayers, MBA, MAcc is Chief Executive Officer of Velocity Urgent Care and is Practice Management Editor of The Journal of Urgent Care Medicine.
Cashless businesses seem to be the next big thing in the world of commerce. Everywhere you turn, more and more restaurants, airports, ballparks, and even grocery chains are moving away from accepting cash in favor of debit/credit cards and smartphone apps with stored payment information. Whereas before you were pretty much assured that any business you patronized would at least accept cash, not having a credit or debit card these days leaves you the very real chance of being denied service at many familiar locations.
When asked about the growing cashless trend, business owners shrug and state that they’re merely responding to the habits of consumers who make fewer and fewer cash payments every year. And given the heightened expectations for fast payment processing offered by industry giants such as Uber and Amazon, combined with the costs and logistics of handling cash, more companies are starting to see the cashless model as an attractive alternative. Further—as a result of and being fueled by this trend—payment apps such as Zelle, PayPal, and Venmo are experiencing a meteoric rise in popularity. Venmo transacted $21 billion in funds exchanges during the first quarter of 2019 alone—an increase of 73% from the same period the year before.
Could Urgent Care Eventually Go Cashless?
In a society that’s becoming increasingly cashless, could urgent care become the next business to adopt this payment model? It’s not an outrageous notion; though it’s a notable exception to the norm, the successful Pacific Northwest-based ZoomCare urgent care footprint has always been a cashless business. Regardless, there might be several attractive benefits for the larger urgent care industry in going cashless, including:
- The vast majority of urgent care collections occur through the “back door”—insurance billing and reimbursements—so there’s not much cash transacted at the front desk. With the shift in patient financial responsibility, though, there will still be deductibles and copays that need to be collected at the time of service and those payments may be made in cash.
- Many consumers have a payment card of some sort, be it debit or credit. Meaning, most patients could easily transact business with an urgent care that only allowed payment cards.
- The need for dual controls as far as counting and balancing the cash drawer prior to and at the end of each day—including shift changes—is time consuming. Therefore, eliminating this administrative step would free up staff and allow more time for patient interaction.
- Employees running to the bank to make deposits and get change takes time away from patient care, introduces Workers’ Compensation risk in case of robbery or car accident, and results in mileage reimbursement expense.
- Every business that handles cash, including urgent care, is always at risk for robbery. Not just when the center is open, but after hours as well. Additionally, whenever a business handles cash, it leaves itself open to the risk of employee embezzlement as well.
- Especially in a multisite operation, the accounting department’s need to perform a large volume of reconciliations of bank deposits against the cash totals in the practice management system would involve a large workload. This workload would require a full-time employee with benefits, or a part-time employee solely dedicated to cash reconciliations—which of course is an added administrative expense.
- Costs surrounding routine bank deposits include time loss and mileage expense reimbursement for an employee transporting cash to the bank by vehicle.
The Cons of Going Cashless in Urgent Care
Indeed, there are many enticing reasons why a cashless urgent care model could significantly reduce administrative time and expense while lowering the risk of crime. There are other important considerations for urgent care to make, however, that suggest a cashless business might not be ideal:
- Insurance plans with small copays likely to be paid in cash. Medicaid programs, for example, especially for children, may have copays as low as $3 or $5 that aren’t conducive to a credit card transaction. And while some clinics write off these small copays, this action both violates the cost-sharing rules of the plans and chips away at the urgent care’s profits.
- The need for a cash deposit in lieu of a credit card pre-authorization when there is a deductible. Like a credit card pre-authorization, the cash deposit helps bolsters collections while the patient’s financial responsibility for the claim is being confirmed by the insurance company.
- Sending billing statements to collect from patients adds more costs. Each correspondence can cost $10-$12 when considering printing and mailing, in addition to the cost of processing the payment they return via mail (not likely cash).
- Legal implications of denying certain customer segments the ability to pay cash. In what may be the largest negative issue surrounding cashless payments, many cashless businesses have begun facing consumer and legal backlash over what some call discriminatory practices. Advocacy groups and lawmakers express concern that given their larger numbers of “underbanked” and “unbanked “residents (ie, people with no bank account or attached bank card, or people with bank accounts but who still rely heavily on alternatives like check cashing services), low-income people, undocumented immigrants, and minorities are being excluded from services. According to the FDIC, more than 24 million U.S. households are underbanked, with those numbers being disproportionally African-American and Hispanic. This very issue has led Washington, DC to pass the Cashless Retailers Prohibition Act of 2018, which makes it illegal for retailers to not accept cash or to charge a different price to customers based on their payment type. Other large cities nationwide are following suit.
Further, Title VI of the Civil Rights Act of 1964 protects against discrimination based on race, color, or national origin in programs that receive federal financial assistance—including Medicaid and Medicare. Any facility covered by Title VI and that establishes a policy that could be construed as economically discriminatory in less-affluent communities could be on a slippery slope. Whether going cash-only would be construed as discriminatory is unclear.
Cashless businesses rightly assert that the practice speeds up transactions, improves services, reduces crime, and improves accounting accuracy. However, many experts believe the practice excludes disadvantaged and disenfranchised groups who are less likely to have banking services and more likely to rely on cash. In sum, there are both pros and cons to a cashless business model for urgent care, so it will be up to urgent care leaders to study the issue carefully then make the best decision for their businesses and the patient populations they serve.