Financial Institutions Key to Helping Healthcare Entities Overcome Implementation Challenges

The advantages of healthcare payment automation and reconciliation are clear, yet many healthcare entities continue to struggle with the best ways to implement effective systems. With several federal deadlines approaching, financial institutions play a key role in helping health plan and provider clients overcome implementation challenges and realize a full return on their investment.

Effective January 1, 2014, health plans must offer payment via the Healthcare Electronic Funds Transfer (EFT) standard according to the Patient Protection and Affordable Care Act (ACA) Section 1104. However, many providers remain unaware of this requirement or the benefits of accepting electronic payments, underscoring the need for financial institutions to consider taking proactive steps to educate their healthcare clients and implement processes to minimize potential disruptions caused by the transition from paper to electronic payments.

While the provider may choose whether or not to move to electronic payments with health plans, changes the ACA made to Section 1862(a) of the Social Security Act require Medicare to issue all reimbursements via EFT and Electronic Remittance Advice (ERA), effective January 1, 2014, and Medicare providers must accept these EFT payments.

Currently, only about 30 percent of healthcare payments are made via EFT, which means significant numbers of healthcare entities may need to adjust systems and workflows to accept the standard. Healthcare payments and remittance data are often handled by two distinct departments. When that is the case, organizations will need to integrate multiple IT systems across the organization and forge new internal and external working alliances to comply.

The Reassociation Trace Number (TRN) Challenge

Still, one of the greatest challenges to healthcare entities may be the reassociation number challenge. This Reassociation Trace Number is critically important to Healthcare Providers, allowing them to match the ACH payment to the remittance advice, which lists the specific payment information for individual patient treatments.

The CORE EFT & ERA Reassociation Rule identified three fields in the ACH record needed for reassociation and named those fields the CORE-required Minimum ACH CCD+ Reassociation Data Elements. They are the Effective Entry Date, the Amount, and the Payment Related Information. Healthcare Providers may ask their financial institutions for the “Reassociation Trace Number,” the “trace number” [not the ACH trace number] or the “CORE-required Minimum ACH CCD+ Reassociation Data Elements.”

The NACHA Operating Rules

Additionally, the NACHA Operating Rules require financial institutions to provide this information upon request. The NACHA Operating Rules, Subsection 3.1.5.3, specifically state: Upon request of the Receiver, an RDFI must provide to the Receiver all information contained within the Payment Related Information Field of an Addenda Record Transmitted with a CCD+ entry to a non-Consumer Account. The RDFI must provide this information by the opening of business on the RDFI’s second Banking Day following the Settlement Date of the Entry.

Changes to the NACHA Operating Rules, which go into effect September 20, 2013, also require that RDFIs offer their healthcare provider customers one secure delivery option to transport the Reassociation Trace Number. Although the healthcare provider is not required to accept delivery via the secure electronic option, RDFIs must make the option available.

Depending on their level of system sophistication, Healthcare Providers may prefer one method and format for the delivery of the Reassociation Trace Number over another. Consequently, financial institutions may want to consider making multiple delivery methods available to providers.

The Healthcare EFT Standard, identified as the NACHA CCD+ Addenda, was identified as a HIPAA standard to be implemented no later than January 1, 2014. Under 45 CFR §162.925, health plans must deliver a HIPAA standard to the provider if requested. If a healthcare provider indicates it has requested delivery of a claims reimbursement via the ACH, and the health plans refuse or require the provider to accept a virtual purchasing card payment instead, financial institutions should provide the HIPAA regulation to the health plan. 

Collaboration, in conjunction with education and outreach, will go a long way toward helping healthcare entities overcome their implementation challenges, making this a win-win situation for all.