HHS Issues Rule on Electronic Payments from Insurers

January 23, 2012 – On January 5, the Department of Health and Human Services (HHS) released a final rule on the electronic transfer of funds (EFTs) between insurers and healthcare providers that the agency says will save billions of dollars and millions of pounds of paper.
 
This ruling was part of the Affordable Care Act (ACA) and mandates the government to establish a uniform procedure for EFTs under HIPAA.  Healthcare providers and insurance carriers must comply with the EFT rules by January 1, 2014.
 
The rule adopts streamlined standards for the format and data content of the transmission a health plan sends to its bank when it wants to pay a claim to a provider electronically. Currently, in most cases, the EFT payment must be manually matched to the remittance advice, which explains the payment, and is usually sent via paper.  This method is time-consuming for the provider’s office to reconcile the two.  The new rule will address this by requiring the use of a trace number that automatically matches the payment to the remittance advice.
 
CMS stated that health plans, including government plans, will incur some costs to acquire EFT software.  However, for a change, the new rule should not cost doctors or hospitals any money because they are the ones receiving the payments, not transmitting them.  It should actually save them money by decreasing the time it takes for reconciliation.
 
Along with the EFT ruling, and this past summer’s proposed rule to provide uniform information and formats when communicating claims and coverage information to providers, several more administrative simplification rules should be published in the near future.

• A standard unique identifier for health plans;
• A standard for claims attachments; and
• Requirements that health plans certify compliance with all HIPAA standards and operating rules.