While it’s been in effect
for nearly three years, the healthcare electronic funds
standard via the Automated Clearing House (ACH) is
still a source of confusion for many
The standard allows dental providers
to request that claims payments be made
using EFTs instead of paper checks—electronically transferred from the insurer to the provider’s 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 savings of time and money for dental practices. Yet, because the standard is still relatively new, many providers have received misinformation about EFTs that could be deterring widespread adoption.
Here are four common myths about the healthcare EFT standard and the reasons why they’re false.
Enrollment is difficult.
In fact, new operating rules have standardized sign-up data rules for providers, so the process is the same, no matter the health or dental plan.
Also, CAQH, a nonprofit alliance of healthcare stakeholders, offers an enrollment hub on its website that allows providers to fill out one form
and enroll with multiple insurance carriers all at once, at no charge. (Find the hub at caqh.org.) Clearinghouses can also assist providers with the enrollment process.
Receiving dental 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.
EFTs via ACH are more cost-effective than many other forms of payment, including checks and virtual cards. In fact, healthcare providers have seen an average savings of $3.04 for every claims check converted to an ACH payment.
When EFTs are used in combination with employee reimbursement accounts (ERAs)—which allows for automated reconciliation of EFT and ERA and automated posting—cost and time savings increase even more, to the tune of $7.21 per payment.
Some practices may need to upgrade their practice management or accounting software to accommodate automated posting, but it’s not necessary if a provider simply wants to receive EFTs.
More adoption, more savings
In January 2017, CAQH, the nonprofit alliance of health-care stakeholders, released its fourth annual index that measured adoption, costs and, for the first time, provider labor time associated with the four most common administrative transactions conducted between health plans and providers: verifying a patient’s insurance coverage; sending and receving payment; inquiring about the status of a claim; and obtaining prior authorization for care.
The index also tracked adoption of electronic transactions by dental health plans and providers and found that adoption of the four electronic transactions for commercial dental health plans was on average 30 percent lower than adoption by commercial medical health plans. With full electronic adoption, dental providers could save more than $1 billion in labor costs, the CAQH Index reported.
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.
Not all plans offer the healthcare EFT standard.
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 plan refuses to offer the healthcare EFT standard via ACH, providers should speak with the company’s compliance officer and, if necessary, file a HIPAA violation.
Additionally, some 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 plans must offer the healthcare EFT standard via ACH if it is requested.
It’s easy to be misled by incorrect information, especially when it revolves around a new standard. To research any outside information they received about the healthcare EFT standard, providers should always turn to reliable sources, such as:
- NACHA’s healthcare payment website, healthcare.nacha.org, and its ACH Primer for Healthcare page, healthcare.nacha.org/achprimer.
- The American Medical Association’s EFT and ERA toolkit pages, both found in the practice management section of ama-assn.org.
Priscilla Holland is the senior director of healthcare payments for NACHA–The Electronic Payments Association. (NACHA serves as the standards organization for the health-care EFT standard.) The NACHA Operating Rules govern the ACH Network, through which healthcare EFT standard transactions are processed.
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