Interim Final Rule on EFT and ERA Available for Public Comment

The Department of Health and Human Services (HHS) has released an interim administrative simplification final rule for electronic funds transfers (EFT) and remittance advice (ERA) transactions­­. The rule is open for public comment until October 9.  The implementation and use of these newest operating rules is expected to encourage electronic payments and to reduce administrative inefficiencies associated with paper and manual processes.

The rule is designed to simplify provider administrative tasks by leveraging electronic systems to streamline the billing and claims reconciliation process. About 70 percent of healthcare claim payments are still made with paper checks, while 75 percent of remittance advice is sent through the mail in paper form despite the advantages of EFT and ERA, the rule’s executive summary said.

 “The new health care law is cutting red tape, making our health care system more efficient and saving money,” said Kathleen Sebelius, HHS secretary, in a press release. “These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients.”

Among the changes included in the rule is a standardized online EFT and ERA enrollment for providers, allowing them to more easily receive electronic payments with multiple plans. A more specific timeline for EFT turnaround is also established.

While HHS estimates that the cost over the next ten years for implementing these operating rules will fall between $1.2 and $2.7 billion for health plans, the savings and cost benefit associated with the rules could add up to $3-4.5 billion. According to the CMS fact sheet for the operating rules, the costs and benefits of the rules are calculated based on four administrative areas:

  • Provider enrollment in EFT and ERA
  • Implementation of connectivity between trading partners
  • Reassociation of payment information with remittance information
  • Posting of payment adjustments and claim denials

Combined with the healthcare claim payment  EFT standards already adopted in January, the EFT and ERA operating rules could save up to $9 billion over the next ten years, according to HHS. The compliance deadline for the EFT and ERA operating rules for covered organizations is January 1, 2014.

 The Affordable Care Act requires HHS to issue a series of regulations over the next five years for the purpose of streamlining healthcare administrative transactions that encourage greater use of standards by providers and make existing standards work more efficiently.

In July 2011, HHS published the first regulation that adopted operating rules for two electronic health care transactions. These rules were designed to make it easier for physician practices and hospitals to determine whether a patient is eligible for coverage, and the status of a healthcare claim submitted to a health insurer. In January 2012, HHS published a second regulation that adopted standards for healthcare claim payments made via EFT and for electronic remittance advice (ERA). This newest set of operating rules  is the third in the series. Click here to see the full operating rule schedule.

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