The cost reductions and improved efficiencies afforded by the new healthcare EFT standards could save providers up to $4.5 billion.
A new healthcare electronic funds transfer (EFT) standard went into effect at the beginning of 2014, and many healthcare professionals are reaping the benefits of time and money saved.
For example, —Performance Pediatrics, a small medical practice in Plymouth, Mass.—has increased its EFTs from 65 percent of payments 18 months ago to 90 percent today, thanks to the new standard. Currently, just 9 percent of the practice’s payments come in the form of checks.
In the past, the lack of an EFT standard placed a heavy burden on providers. Providers interested in receiving EFT payments had to deal with a variety of enrollment procedures, and transactions were often delayed. There was also no standard for reassociation of data—making it difficult to match payments with claims.
As part of the Patient Protection and Affordable Care Act, the new healthcare EFT standard, NACHA’s ACH CCD+ Addenda, took effect in January to help remedy those problems. For healthcare professionals, the new standard offers a faster, easier and less expensive way to handle payments. For example, each EFT payment includes a reassociation number, which makes matching outstanding claims with payments quick and easy for accounting offices. The Healthcare EFT Standard is the only payment method with this feature.
Healthcare EFTs via ACH are also faster than paper checks and card payments. Healthcare EFTs are received as quickly as direct deposit, funds are deposited directly into your bank accounts and the transferred funds are available up to seven days faster than with paper checks.
Additionally, healthcare EFTs via ACH are more secure than checks—the dominant payment form targeted by fraudsters—and all transactions are compliant with HIPAA privacy standards.
The most significant benefit, though, might be the cost savings afforded by using the healthcare EFT standard instead of other payment types. The cost of an EFT via ACH payments is, on average, 34 cents. Other EFT payment types, such as wire transfers and credit cards, can cost an average of $10.73 or more per transaction. And when compared to checks, providers can save $1.53 per payment by using EFTs via ACH instead of checks, according to the 2013 U.S. Healthcare Efficiency Index Report.
Overall, the cost reductions and improved efficiencies afforded by the new healthcare EFT standards could save physician practices and hospitals up to $4.5 billion over the next 10 years, according to preliminary estimates from theDepartment of Health and Human Services.
Like Performance Pediatrics, other healthcare practices can easily begin realizing the benefits of the new healthcare EFT standard. To get started, providers simply have to contact their health plans, choose the healthcare EFT standard and provide the health plans with their payment information.
All health plans must be able to deliver the EFT standard if requested by a provider. Health plans are not allowed to delay or reject an EFT or ERA transaction and/or charge an excessive fee, or give providers incentives to use a payment method other than the ACH Network.