The Department of Health and Human Services (HHS) has issued an interim final rule that prescribes operating standards for electronic fund transfers (EFT) and electronic remittance advice (ERA)–the payment explanation that gives details about providers’ claims payment. Last July, HHS released standards for insurance eligibility and claims status transactions.
Required by the Health Insurance Portability and Accountability Act (HIPAA), these operating rules are expected to cut $16 billion from the administrative costs of healthcare providers, insurance companies, and states over the next 10 years. HHS anticipates that the EFT and ERA rules alone will save up to $4.5 billion.
Currently, health plans send providers electronic payments separately from electronic remittance advice. Physician practices and hospitals use the ERAs to post the payments in their financial systems, but cannot link those postings automatically to the funds transfers. Under the new rules, a trace number will allow providers to link the two transactions, eliminating the time and expense of manual reconciliation.
via InformationWeek Government, continued here.