While its been in effect since January 2014, the Healthcare EFT Standard via ACH is still a source of confusion for many medical providers.
The standard allows providers to request that claims payments be made using EFTs instead of paper checksthat is, electronically transferred from the insurer to the providers bank account via ACH, similar to direct deposit. Health plans are required, by law, to comply.
Converting to EFTs via ACH can result in substantial cost and time savings for healthcare practices. Yet, because the standard is still relatively new, many providers have received misinformation about EFTs via ACH that could be deterring them from making the switch.
Here are four common myths about the Healthcare EFT Standard and the reasons theyre false:
Myth: Enrollment is difficult. In fact, new operating rules have standardized sign-up data requirements for providers, so the process is the same, no matter the health plan. Additionally, the CAQH Enroll Hub allows providers to fill out one form and enroll with multiple insurance carriers at once. Clearinghouses can also assist providers with the enrollment process.
Myth: Receiving healthcare EFTs via ACH is costly and requires special equipment.
Actually, the only item required to receive EFT via ACH payments is a bank account, and signing up costs nothing. Whats more, EFTs via ACH are more cost effective than many other forms of payment, including checks and virtual cards. Providers see an average savings of $3.04 for every claims check converted to an ACH payment.
When EFTs are used in combination with ERAswhich allows for automated reconciliation of EFT and ERA and automated postingcost and time savings increase even more. Providers can save $7.21 per payment when they switch from checks and explanations of benefits to EFT and ERA.
Some practices may need to upgrade their practice management or accounting software to accommodate automated posting, but its not necessary if a provider simply wants to receive EFTs.
Myth: Healthcare EFTs via ACH are less secure than other methods of payment. In reality, healthcare EFTs via ACH are among the safest forms of payment available.
Funds are transferred directly from bank account to bank account via the ACH Network, which has been in use since the 1970s. Because EFTs are entirely electronic, using them eliminates the risk of a check being lost or stolen.
Myth: Not all health plans offer the Healthcare EFT Standard. Health plans have been required by law, since January 2014, to offer the Healthcare EFT Standard via ACH to any provider who requests it. If a health plan refuses to offer the Healthcare EFT Standard via ACH, providers should speak with the companys compliance officer and, if necessary, file a HIPAA violation.
Additionally, some health plans are offering virtual cards for claims payments instead of EFTs and believe that this complies with the standard. It does not. The healthcare EFT standard is the NACHA CCD+ and must flow through the ACH Network. Providers have the option to say no to virtual cards, and all health plans must offer the healthcare EFT standard via ACH if it is requested.
Priscilla Holland is senior director of healthcare payments at NACHA, which governs the Automated Clearing House Network.
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