Practice Management News

WEDI Guide Suggests New Electronic Fund Transfer, ERA Standards

Healthcare stakeholders should adopt more electronic options for claims reimbursement payments to boost the healthcare revenue cycle, WEDI stated.

By Jacqueline LaPointe

- The Workgroup for Electronic Data Interchange (WEDI) recently released a guide that advised all healthcare stakeholders to implement Automated Clearing House (ACH) Electronic Funds Transfers (EFT) and Electronic Remittance Advice (ERA) standards to transfer claims reimbursement payments.

WEDI addresses challenges, principles of implementing new electronic fund transfer and ERA standards

Electronic payments could help to optimize the healthcare revenue cycle through automation and save significant healthcare resources.

“WEDI’s mission is clear – identify opportunities for industry collaboration that lead directly to operational efficiencies in the healthcare environment,” said Charles Steller, WEDI president and CEO. “In support of that mission, we have developed the ePayments Principles to create a foundation for expanded use of the automated payment transaction, while at the same time instituting a framework for the appropriate use of alternative payment methodologies.”

Healthcare stakeholders have faced many challenges with implementing various forms of electronic payments, the guide noted. A recent WEDI survey found that one-fourth of provider organizations paid fees for using ACH EFT transactions and 40 percent were required to accept reimbursements from a health plan via a virtual credit card even though the provider was responsible for the card’s transaction fees.

As a result, ACH EFT transactions are significantly underused in healthcare with only 61.4 percent of claims reimbursements being transferred through the electronic payment method, according to the most recent Council on Affordable Quality Healthcare Index.

“The benefits of using ACH EFT in healthcare are well established,” stated Jay Eisenstock, head of provider solutions for Aetna and co-chair of the WEDI ePayments Taskforce. “The government estimates that the savings of using ACH EFT and electronic remittance advice (ERA) standards and operating rules is as much as $4.5 billion for government and commercial health plans, hospitals, physician practices and others over ten years.”

“However, provider adoption has not been as rapid as many had hoped due to reluctance to modify existing workflows or purchase supporting software,” added Eisenstock. “We are hopeful that the ePayments Principles will serve as a catalyst for increased industry use of this important transaction.”

While many providers still receive paper checks for reimbursements, the guide stated that providers can save staff time by using electronic payments and adopting ACH EFT and ERA standards “permits providers to take full advantage of reassociation capabilities.” The healthcare savings could be redirected to the care delivery process.

To alleviate several challenges with implementing ACH EFTs in healthcare, the government has established electronic payment standards and operating rules under the Affordable Care Act. Since 2014, health plans are required to support standard EFT transactions through the ACH Network and they cannot offer financial incentives to providers for enrolling in a non-ACH EFT payment program.

However, the standardization of healthcare electronic payments has not increased the use of ACH EFT claims reimbursements, creating “unrealized administrative savings for all stakeholders,” the guide stated.

To further promote the use of ACH EFT and ERA standards, WEDI advised providers to ensure that their organization is implementing electronic payment methods and incorporating the payments into their healthcare revenue cycle workflow.

For health plans, clearinghouses, and payment-related vendors, WEDI recommended the following principles to help the groups understand electronic payment methodologies and leverage the benefits of administrative simplification:

• Complete ACH EFT enrollment process within 30 days of receipt of provider information to start electronic reimbursements as soon as possible

• Offer providers the existing payment methods until ACH EFT enrollment is complete

• Avoid delays with ongoing payments when a provider switches to any form of electronic payment

• Communicate all fees associated with electronic payments to providers, including notification about the availability of an ACH EFT option and recommendations to discuss fees with any other contracted vendors, such as credit card merchant processors

• Require explicit agreement, or opt-in, from providers before transferring reimbursements via an electronic method

• Consider requiring contracted providers to sign up for ACH EFT payments

• Give providers a minimum 90-day notice of transitions from paper-based reimbursements to electronic payments and require opt-in to any nonstandard electronic payment method

• Participate in standardized and centralized ACH EFT enrollment databases

• Inform providers of recoupment policies and that enrolling in ACH EFT will not impact established overpayment and recoupment policies

• Receive explicit authorization from providers before using ACH EFT debit transaction for recoupment purposes per the NACHA Operating Rules regulations

WEDI also suggested that healthcare software vendors create products that support the mandated ACH EFT and ERA standards and operating rules. The software should also automate reconciliation to help providers adopt integrated electronic payments.

In response to the guide, the  Medical Group Management Association (MGMA) announced its support for WEDI’s  suggestions about how the healthcare industry can implement more effective and revenue-boosting reimbursement methods.

“In the absence of clear implementing guidance from the government, some health plans and vendors are making a quick buck off the backs of physicians,” Halee Fischer-Wright, MD, MMM, FAAP, CMPE, MGMA’s President and CEO, said in a press release emailed to journalists. “Industry bad actors are effectively penalizing physicians up to five percent by reimbursing them with credit card or EFT payments that charge excessive fees. This prevents medical practices from receiving full payment for the services they provide to patients.”

“We are hopeful that payers and other key industry stakeholders will embrace the WEDI ePayments Principles,” added Fischer-Wright.

Dig Deeper:

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