Nearly two decades ago, Medicare announced it would make the 835 electronic remittance advice available to providers--if they ordered a special application to download and print the advice.

That didn't do much to spur adoption of the transaction, so an entrepreneur developed software to auto-post the transaction to patient accounts.

"And that is what drove value to the 835," recalls John Casillas, senior vice president of the HIMSS Medical Banking Project. "The provider could take data and automate the workflow." Once the 835 transaction was more usable, Medicare said providers using it could get electronic funds transfer of their payments.

All these years later, however, many payers still don't support the ERA and/or EFT transactions and have differing standards for electronic claims submission, and vendors haven't developed software affordable to small provider organizations that fully automates the payment process. "The hope of electronic data interchange was to increase administrative efficiency," Casillas says. "But we have implemented transactions that go from provider to payer, but have not completed the loop from payer to provider."

The Affordable Care Act mandates health payers to implement the ERA and EFT transactions. But there are a series of challenges to getting that done in a manner that will make the transactions more valuable to providers, Casillas recently testified before the National Committee on Vital and Health Statistics, a federal advisory body.

For instance, investment is required and "a solo practitioner isn't going to make the economics of the transition work at the current price points for this technology," he testified. "It isn't a matter of how low you can get EFT (and those using this form of payment know it's pretty low today) but much more about how to get the price point down for integrating 835 remittance data into the patient accounting or billing process." The 835, he noted, provides a substantial part of the return on investment in payment technologies.

Another challenge is the cooperation needed between two very different industries--banking and health care--to tie together ERA and EFT. "These transactions flow out of the traditional areas within our health care system, laden with protected health information, and into a whole new ecosystem that is bank-driven with new technologies, processes, procedures, actors/processors and laws," Casillas said. "We believe that this pathway offers great opportunities for health care, yet, knowing the 'terrain' is important for crafting policy."

For Casillas' full testimony, click here.

--Joseph Goedert


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