Healthcare AP Automation: How to Reduce Fraud and Operational Stress

Bottom line: When healthcare AP teams are stretched across multiple entities, reimbursement volatility, and growing vendor lists with too few staff, controls weaken. Fraud doesn't happen because teams are careless — it happens because they're overloaded. The fix isn't more headcount. It's fewer manual touchpoints, centralized vendor validation, and managed payment execution.

Healthcare finance teams don't have an incentive problem. They have a capacity problem.

The average healthcare AP department is juggling multi-entity structures, pharmacy regulations, reimbursement uncertainty, and vendor sprawl. And that's often with fewer staff than the workload demands. When the people responsible for payment controls spend all their time processing, something gives. Usually, it's oversight.

This isn't theoretical. According to the 2025 AFP Payments Fraud and Control Survey, 79% of organizations were targets of attempted or actual payments fraud in 2024. Checks are still common in healthcare, and they were the payment method most often hit, with 63% of respondents reporting check fraud. And only 22% of organizations managed to recover 75% or more of the funds lost, down sharply from 41% the prior year.

For healthcare CFOs running multi-state platforms — especially those backed by private equity with aggressive growth timelines — this isn't a distant risk. It's an operational reality that compounds every time you add a new entity, onboard a new vendor, or lose an experienced AP clerk.

What makes healthcare accounts payable uniquely complex?

Healthcare doesn't just have more vendors than most industries. It has more complexity per vendor, more regulatory touchpoints per payment, and less standardization across entities. That combination creates blind spots, and fraud thrives in blind spots.

The pressure points compound in ways other industries don't face:

• Multi-entity structures: Managing different tax IDs, bank accounts, approval hierarchies, and localized vendors across clinics, pharmacy operations, telehealth brands, and management services organizations. Some entities run NetSuite; others are still on QuickBooks from a pre-acquisition setup.

• Reimbursement volatility: Medicare and Medicaid reimbursement rates shift. Private payer contracts renegotiate. Revenue cycle delays hold up receivables for weeks. CMS reported a 7.66% improper payment rate for Medicare Fee-for-Service in fiscal year 2024, representing $31.7 billion — and that uncertainty cascades downstream to AP departments making vendor payment decisions.

• Compliance exposure: HIPAA, state licensing, and federal program requirements create audit obligations that most industries don't face. Incomplete audit trails don't just create operational risk, they create regulatory risk. The HHS Office for Civil Rights investigated more than 450 HIPAA data breaches from 2024 alone.

• Vendor sprawl: From medical supplies and pharmaceutical distributors to localized facility maintenance and staffing agencies, the vendor master file grows exponentially with each acquisition. Each new vendor relationship is a new surface area for fraud.

Any one of these would strain a well-staffed AP team. Healthcare finance departments are dealing with all of them simultaneously, usually with headcount that hasn't kept pace with organizational growth.

How does operational stress weaken AP controls?

Fraud doesn't usually happen because teams are careless. It happens because they're overloaded. The mechanism is straightforward: capacity constraints lead to shortcuts, shortcuts create gaps, and gaps get exploited.

What role does lean staffing actually play?

AP staffing in healthcare is a quiet crisis. Back-office turnover is high, institutional knowledge walks out the door regularly, and the people who remain are covering more ground with fewer resources.

As Bottomline Technologies documented in their healthcare AP fraud analysis, some healthcare organizations have hundreds of managers manually opening and keying invoices, with single invoices taking up to two weeks to process. Ardent Partners estimates that some businesses spend close to $13 to process a single invoice — and that's before you factor in the hidden costs of error correction, duplicate payments, and missed discounts.

When your AP team is this stretched, the controls that prevent fraud — segregation of duties, vendor verification callbacks, three-way matching, banking change validation — don't get skipped because people are negligent. They get skipped because people are drowning.

Why are vendor banking change requests the critical vulnerability?

Here's where operational stress meets fraud exposure most directly. A healthcare AP clerk processing hundreds of invoices a week receives an email requesting updated banking details for a vendor they've dealt with once. There's no centralized validation process. The request looks legitimate. Under normal circumstances, they'd verify with a phone call. But today they have 47 invoices in the approval queue, two entities with payments due by end of day, and a new vendor onboarding request from a recently acquired clinic.

The 2025 AFP survey found vendor imposter fraud rose 11 percentage points year-over-year, cited by 45% of respondents. Business email compromise remains the most frequently reported fraud vector at 63%. When urgency is the default operating mode, as it typically is in healthcare finance, these schemes succeed more often than they should. School districts, which are significantly less complex than most PE-backed healthcare platforms, have lost hundreds of thousands of dollars to exactly this kind of ACH redirect fraud.

What types of payment fraud hit healthcare AP hardest?

Healthcare AP departments face the same fraud vectors as any industry, but the operating environment amplifies certain risks. Here's where the exposure concentrates.

The common thread: every one of these exploits the gap between what your AP team is expected to verify and what they actually have time to verify. That gap widens with every acquisition, every new vendor relationship, and every open headcount you can't fill.

How can healthcare organizations secure AP without adding headcount?

The answer isn't "work harder" or "be more careful." Healthcare AP teams are already working hard and being as careful as capacity allows. The fix is structural: Reduce the manual touchpoints where fraud can enter the process, and centralize the controls that catch it when it tries.

Four changes make the biggest difference.

1. How does centralized vendor validation reduce exposure?

In most multi-entity healthcare platforms, vendor onboarding happens at the entity level. Each clinic or brand maintains its own vendor records, its own banking details, and its own verification standards — or lack thereof. This is how ghost vendors get created, how banking change requests go unvalidated, and how duplicate vendor records proliferate.

Centralized vendor validation means one secure intake process for all entities, with verified banking information stored and maintained by a dedicated team or partner. Changes to vendor banking details get flagged automatically and verified through a secure portal with multi-factor authentication, not through email requests handled by individual staff.

This is the single highest-impact control a healthcare finance team can implement. It closes the door on the two most common fraud vectors — BEC-driven payment redirects and ghost vendor schemes — without adding work to your already stretched AP staff.

2. Why do standardized workflows across entities matter?

When Entity A uses email approvals, Entity B uses a paper stamp-and-sign process, and Entity C routes everything through a shared inbox, you don't have a payment process. You have several payment processes, each with its own vulnerabilities and none with consistent audit trails.

Standardizing approval workflows across all entities means:

• Clear, consistent thresholds. Payments above certain dollar amounts require controller or CFO sign-off regardless of which entity originates the payment.

• Automated segregation of duties. The same person can't create a vendor, approve an invoice, and execute a payment.

• Time-stamped approvals. Digital approvals create an audit trail without manual documentation.

• Integration with your ERP. Whether that's NetSuite, Sage Intacct, Microsoft Dynamics 365, or another system — ensures the workflow doesn't require double entry.

AP automation that complements your ERP handles the last-mile work the ERP wasn't designed to manage: invoice capture, approval routing, payment execution, and reconciliation.

3. What's the case for managed payment execution?

Here's where the "fully managed" distinction matters. Self-service AP software gives your team better tools, but still leaves them responsible for vendor outreach, exception handling, payment execution, and reconciliation. For a healthcare finance team that's already at capacity, that's more work on top of more work.

A fully managed AP automation solution handles:

• Vendor enablement. Converting vendors from check to electronic payments. If you've got 1,000+ vendors across 10 entities, calling each one to collect banking details isn't realistic with a lean team. A managed service handles that outreach, verifies the data, and in many cases indemnifies the payments — shifting fraud liability off your organization.

• Payment delivery. All methods (virtual card, ACH, check) through a single workflow.

• Exception management. Follow-up on failed payments, vendor inquiries, and reconciliation discrepancies — without consuming your AP team's time.

• Reconciliation support. Automated matching of payments to invoices with remittance data flowing back into your ERP.

4. How do virtual cards reduce fraud risk in healthcare AP?

Virtual cards are the most fraud-resistant payment method available for B2B transactions. Each virtual card generates a unique, single-use 16-digit number tied to a specific vendor, amount, and merchant code. If a number is intercepted or compromised, it can't be reused. There's no check to wash, no ACH details to redirect, and no static account information to steal.

The AFP data underscores the contrast. Checks were targeted in 63% of fraud incidents, while virtual cards remain the least-targeted payment method. Beyond fraud prevention, virtual cards generate rebate revenue on eligible spend — turning what's traditionally a cost center into a contributor to the bottom line. For healthcare platforms under pressure to demonstrate operational efficiency to PE sponsors or boards, that's not a minor detail.

What does this look like in practice?

Thirty Madison — the virtual-first healthcare company behind Nurx, Keeps, and Cove — is a useful reference point. Operating approximately 10 entities with multiple bank accounts, Thirty Madison centralized its AP with Corpay Complete to manage payments across all brands in one place. This resulted in standardized workflows, reduced manual touchpoints, and a single source of truth for vendor data across entities.

That's the pattern for PE-backed healthcare platforms scaling fast. Each acquisition brings new vendors, new bank accounts, new approval chains, and new fraud surface area. Without centralization, each one adds risk. With it, each one simply plugs into an existing, controlled workflow.

How should healthcare CFOs evaluate their current AP fraud exposure?

Before investing in new systems, it's worth diagnosing where your current process is most vulnerable. These five questions tend to surface the biggest gaps quickly:

1. Do all entities use the same vendor onboarding process, or does each site maintain its own records and banking details?

2. When a vendor requests a banking change, what's the verification protocol? Is it consistent across entities?

3. How many payment methods (check, ACH, wire, card) are managed through separate workflows? Could a duplicate payment across methods go undetected?

4. Is segregation of duties enforced automatically, or does it depend on manual compliance from a small team?

5. If your CFO asked for a complete audit trail of every payment made across all entities last month, how long would it take to produce?

If the answers make you uncomfortable, you're in the majority. Only 9% of AP departments today are fully automated, according to industry analysis. The other 91% are operating with some combination of manual processes, partial automation, and system fragmentation — exactly the environment fraudsters target.

What's at stake for healthcare organizations that don't act?

The cost of payment fraud in healthcare extends beyond the dollar amount stolen. There's the operational disruption of investigating the incident, the vendor relationship damage when legitimate suppliers don't get paid, the compliance exposure when audit trails are incomplete, and the reputational risk when a breach becomes public.

The regulatory environment is tightening, especially for PE-backed platforms. CMS is increasing ownership transparency requirements. State attorneys general are expanding review authority over healthcare transactions. The DOJ obtained approximately $2.9 billion in civil fraud recoveries from healthcare organizations in 2024, according to the American Bar Association's enforcement review. The scrutiny will only intensify.

For healthcare CFOs, the math is clear. The hidden costs of manual AP processes — including fraud losses, staff time spent on exception handling, and missed early-payment discounts — typically exceed the cost of automating. And the risk of inaction grows with every new entity, every new vendor, and every week your team spends processing instead of protecting.

Secure your healthcare AP with Corpay

Multi-entity complexity, lean staffing, and reimbursement volatility aren't going away; but the fraud exposure they create doesn't have to be permanent. The right approach centralizes vendor validation, standardizes workflows across entities, and shifts payment execution to a managed service that handles the work your team doesn't have capacity for. Corpay's fully managed AP automation platform does exactly that — from vendor enablement and secure payment delivery to reconciliation and exception management — so your finance team can focus on the work that actually requires their expertise.

Frequently asked questions

How does AP automation specifically address BEC fraud in healthcare?

AP automation routes all vendor banking changes through a centralized, secure validation process rather than relying on email-based requests handled by individual staff. When vendor banking details are managed in a verified portal with multi-factor authentication, a spoofed email requesting a change can't bypass the system. The vendor updates their own details through the secure channel, and changes are flagged for review before any payment executes.

Can AP automation integrate with healthcare-specific ERP systems?

Yes. Leading AP automation platforms integrate with the full range of ERPs used in healthcare, including NetSuite, Sage Intacct, Microsoft Dynamics 365, Acumatica, and more than 180 other systems via API, SFTP, or file-based exchange. The ERP stays the general ledger and source of truth; the automation layer handles invoice capture, approvals, payment execution, and reconciliation — the work ERPs weren't built to manage end-to-end.

What's the ROI case for a healthcare organization with 10+ entities?

The ROI comes from three sources: cost reduction (processing costs typically drop significantly with automation, according to Ardent Partners benchmarks), fraud prevention (reducing exposure to the check and BEC fraud that target the majority of organizations), and revenue generation (virtual card rebates on eligible spend often offset the cost of the platform itself). Corpay's internal benchmarks show organizations can free up roughly 40% of their AP team's time through full-service automation, redirecting that capacity from transactional processing to strategic finance work.

How long does implementation take across multiple entities?

Most organizations go live with the first wave of payments within 90 days. Full vendor enablement — getting the majority of your vendor base onto electronic payment rails — is an ongoing process, typically 6–12 months depending on vendor count and complexity. The key is phasing the rollout: start with your highest-volume entities and most frequent vendors, demonstrate results, and expand from there.

Does Corpay handle vendor enablement for healthcare organizations?

Yes. We handle the vendor outreach, banking data collection, verification, and electronic payment enrollment that most healthcare finance teams don't have the bandwidth to manage internally. With a vendor network of 4 million+ accepting suppliers, many of your vendors are already enabled and ready to receive electronic payments from day one.

David Luther

Product Marketing Program Manager

David Luther, MBA is a product marketing program manager with years of experience in commercial banking, finance, and technology sectors, with research and writing appearing in financial publications.

Payments Automation

AP Automation