Administrative Simplification News: EFT Is Off To a Great Start

EFT Is Off To a Great Start HIPAA electronic funds transfer (EFT) standards for health care payments may not be the flashiest CMS eHealth initiative, but they are delivering on the promise of savings right from the start. Similar to financial transactions such as payroll direct deposits, EFT is a way to allow providers to conduct electronic payment and remittance advice transactions. January 2014 was the first month health plans were required to comply with new standards and operating rules aimed at making EFT transactions simpler and faster. That same month, more than 8 million health care payments were made using electronic funds transfers through the Automated Clearing House (ACH) Network. This encouraging start continued through February and March, with the first 3 months of 2014 seeing a 32% increase in EFT transactions identified as health care payments over the fourth quarter of 2013. In the long run, we estimate that EFT standards will lead to a 6% to 8% annual increase in the use of EFT for health care payments from 2014 to 2018. But how does the use of EFT lead to savings for health care organizations? The goal of EFT standards and operating rules is to make EFT transactions easier for providers to use and to incorporate in their business processes. For clinical practices and hospitals, cost savings from EFT will come mainly from a decrease in the time spent on payment processing-related tasks. In developing the regulation for health care EFT standards, HHS calculated that there will be a 10% to 15% time savings for health care providers using EFT to receive and post payments. The American Medical Association estimates that efficiencies from use of EFT will lead to approximately $2,000 in annual savings per physician, with savings of more than $0.40 in processing costs for each paper check that is converted to an EFT. With the number of health care payments sent through EFT in the first 3 months of 2014 alone, you can see how these savings will add up. With the promising start for health care EFT, HHS has high hopes for other Administrative Simplification initiatives like eligibility and claims status operating rules and the Health Plan Identifier. To learn more about these initiatives, visit the CMS Administrative Simplification website. What Providers Need to Know About EFT and the ACH Network If you use EFT, we want to make sure you are aware of your options for receiving electronic payments. As of January 1, 2014, health plans are required to comply with provider requests to use the ACH Network to conduct EFT and ERA transactions. Health plans are not allowed to: Delay or reject an EFT or ERA transaction because it is standard Charge an excessive fee or otherwise give providers incentives to use a payment method other than ACH Network Other Resources For any payment method, CMS recommends that providers refer to NACHA, the American Medical Association, and other organizations’ resources to explore payment options and ask questions to identify any added fees. Subscriber Services: Manage Preferences | Unsubscribe

Centers for Medicare & Medicaid Services (CMS) has sent this update. To contact Centers for Medicare & Medicaid Services (CMS) go to our contact us page.