Switching to the health care EFT standard: Four ways to ease the transition
by Priscilla Holland, Senior Director of Healthcare Payments, NACHA
Health care electronic funds transfers (EFTs) via ACH – the health care EFT standard – can make practice management easier and more affordable—and switching doesn’t have to be difficult.
Compared with other payment methods, providers can save up to $7.21 per payment using EFTs via ACH in combination with electronic remittance advice (ERA), according to the 2014 CAQH Index. EFT via ACH payments, which transfer funds electronically from the insurer’s account to the provider’s account, are also faster than other methods, with funds available the same day they’re received.
Additionally, going electronic also has security and efficiency benefits. Because they’re transferred digitally, EFTs via ACH come with lower fraud risk than, for example, paper checks, which often change hands multiple times. And, with most practice management systems, reconciliation between EFT and ERA can be fully automated.
Best of all? It’s not difficult to switch. Thanks to the implementation of the health care EFT standard effective Jan. 1, 2014, which requires insurers to deliver EFT payments via ACH upon request, it’s easier to transition than ever, especially if you use the following tips.
- Enroll the easy way. CAQH offers an enrollment hub that’s free to all providers. Entering your information into the secure database just once allows you to enroll with multiple participating health plans, simultaneously. For plans that aren’t participating in the enrollment hub, providers should rank them according to payments volume. In most practices, roughly 80 percent of payments come from 20 percent of insurance providers. It makes sense, then, to enroll with the largest payments providers first to reap maximum benefit right away. Then, gradually work your way down the list until you’ve enrolled with all insurers.
- Don’t forget ERAs. EFTs via ACH produce more savings for practices when they’re used in conjunction with ERAs. ERAs allow for the automatic reconciliation and posting of payments to patient accounts, saving your staff time as well as eliminating manual posting errors. It’s easy to set up ERAs: in most cases, they can be requested at the same time as EFTs via ACH. If your practice uses a clearinghouse, contact them for additional assistance.
- Talk to your vendors. Communication and cooperation between all parties involved in the EFT process—practices, banks, clearinghouses, practice management systems—is essential to a smooth transition. Your bank is required by NACHA Operating Rules, which govern the ACH Network through which healthcare EFT standard transactions are processed, to deliver ACH remittance data to your practice. If you’ve requested ACH data and your bank won’t provide it, contact NACHA immediately. Additionally, while most clearinghouses and practice management systems can support EFT/ERA reconciliation and auto posting, make sure yours can and, while you’re at it, ask about any set-up help or services they might provide.
- Address staff concerns. Change can be uncomfortable for staffers who are used to tried-and-true processes or who might be concerned about being replaced by technology. In truth, transitioning to EFT/ERA simply reduces staffers’ time spent on reconciliation and posting. This allows them to handle a larger volume of claim payments or frees them up to focus on other important tasks and patients. Prior to transitioning, get ahead of staff concerns and make sure everyone understands the EFT/ERA process and its benefits.
Switching to EFTs via ACH is one of the easiest ways to dramatically simplify your practice management and reduce costs. For more resources and tips on how to make the transition a smooth one, visit https://healthcare.nacha.org/ProviderResources.
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