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Life Health > Health Insurance > Your Practice

What the New EFT Rule Means for You

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In an earlier post, I commented on the U.S. Department of Health and Human Services (HHS) interim final rule adopting electronic funds transfer (EFT) standards, which was released in January 2012. In the post, I outlined the following changes needed in order for the new rule to truly improve efficiency and deliver cost savings for health care payers and their provider networks:

1. Add a Trace Number Requirement

The rule should require that the EFT and the electronic remittance advice (ERA) have a trace number. By including a trace number, payers can deliver ERA/EFT efficiently and providers can re-associate the ERA/EFT and reconcile their payments efficiently.

2. Remove the CTX File

The CTX file should not be included in the rule as a method for payer-to-provider EFT payments because the file creates high costs and data processing risks. The rule should mandate that payers use only the CCD+ file to deliver EFT payments.

Well, as they say, “If you don’t ask the question, the answer is always ‘no.’”

On Aug. 10, HHS released a new version of the interim final rule with updates, including the changes noted above. I’m thrilled to see that these changes were made, which align with the CAQH CORE Operating Rules, because now the rule can truly improve administrative efficiency for payers and providers.

With the requirements for the CCD+ file and trace number included in the rule, both payers and providers are better positioned to reduce their administrative costs. Here’s what the new rule means for you:

For Healthcare Payers

Reduce Costs to Meet Medical Loss Ratio (MLR) Mandate:

The rule mandates that payers delivering EFT payments to providers must use the CCD+ file format. This allows payers to efficiently and securely include the trace number, which enables providers to re-associate the ERA with the EFT and reconcile their payments efficiently.

Reduce Provider Call Volume:

Streamlining provider reconciliation by enabling efficient re-association will reduce call center volume for payers because there will be fewer questions regarding payments.

Increase Provider Adoption of Electronic Payments:

The ability to reconcile payments efficiently will drive more providers to accept electronic payments from payers, further reducing payer costs to send paper checks and remittances.

For Health Care Providers:

Reduce Time and Costs to Reconcile Payer Payments and Remittances:

The rule mandates that payers include the trace number with the EFT payment, which enables providers to reconcile payments and remittances automatically and reduces hours of work to reconcile payments manually.

Get Paid Faster:

Providers will receive electronic payments faster than paper checks, which enables them to identify remaining patient responsibility and bill patients sooner.

Streamline Processes with Reporting on Remittances:

By receiving fully reconciled remittances electronically, providers can access summary reports on all remittances to save administrative time and costs.

Apply Best Practices:

The latest version of the rule better positions payers and providers to reduce their administrative costs. However, the rule specifies that payers and providers need to “apply best practices to transmitting and receiving [ERA/EFT] transactions” in order to achieve administrative efficiency. Here’s a list of best practices with ERA/EFT transactions.


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