Electronic Fund Transfer:
Electronic Funds Transfer or “EFT” is the process of using of telecommunications to move funds from one financial institution to another. EFT has two basic EFT transaction types: Wire transfers and Automated Clearing House (ACH) transactions.
Effective January 2014, all health plans must be able to make claims payments to providers using the newly-designated Healthcare EFT Standard under the Patient Protection and Affordable Care Act. In addition, Medicare will reimburse providers’ claims solely through the use of the Healthcare EFT Standard.
How often have you heard, “the check is in the mail” from insurance companies? Or, you’re billing staff just spent hours processing paper checks and they forgot to deposit the checks at the bank. Or worse, a check is lost or stolen and now you have to start a time consuming search and rescue.
Many employers use direct deposit, so why can’t physicians expect the same from payers?
The good news is they can. Physicians who enroll in Electronic funds transfer (EFT) see an immediate return on investment in terms of efficiency and improved cash flow as insurers transfer payments electronically into a bank account of their choosing.
Secure and Efficient billing management tools:
- One of the best billing management tools at your fingertips is Electronic Funds Transfer (EFT).
- EFT is easy, secure and efficient. It’s similar to direct deposit where insurance claims payments are automatically sent to your bank account. Which means, you get paid faster?
- And more payers are requiring that providers receive EFT payments to remain compliant with provider network criteria.
By adopting the EFT standard (ACH), providers can achieve business advantages as well:
- Decreased processing costs. Companies report saving more than $0.40 in processing costs for each paper check converted to an EFT.
- Prompt payment of clean claims. Many state prompt-payment laws require compensation of electronic clean-claims in 15 days or less. States also include provisions to pay claims filed electronically with EFT payments up to 15 days before a paper check.
- Reduced risk of lost or stolen checks.Because payments are transferred electronically, physicians don’t need to worry about losing or misplacing a paper check.
- Quicker funds availability.A standard EFT via ACH automatically deposits funds into a bank account, saving time on manual back-office processing of paper checks and enabling quicker and improved access to funds.
- Business efficiencies.
- Medicare Payments: Because providers will be receiving standard EFT payments from Medicare, implementing standard EFT payments across the board will create accounts receivable consistencies and efficiencies in business practices.
- Expedited Filing: Receiving payments faster by adopting the EFT standard will expedite claims filing to secondary payers
Follow these three simple steps to begin automating electronic payments from health plans:
- Provide payment information to health plans. Enroll in EFT with a few health plans each week, starting with the health plans that represent the largest percentage of your business.
- Receive ERA Reassociation Trace Number directly from your bank. For providers that receive an Electronic Remittance Advice (ERA) from the health plan, the Reassociation Trace Number included in EFT can be sent directly from the bank to the provider, if it is requested. Automation of the reconciliation between the EFT and ERA can be facilitated by many practice management systems.
- Receive payments directly in your bank account. In the same way employees receive their pay via Direct Deposit, you automatically receive your funds on time, every time, by choosing EFT payments from health plans.
- Contact health plans. Choose the EFT standard (via ACH) for payment.
To learn more about EFT, Contact us for a free practice analysis to see how we can help you.