Healthcare Provider Frequently Asked Questions

Frequently asked questions related to The Affordable Care Act and Healthcare EFT Standards and authored by the Center for Medicare and Medicaid Resources (CMS), are provided below.  Emphasis added by NACHA, July 12, 2012.

Are HIPAA covered entities required to use the ACH Network to transmit and receive health care claim payments by electronic funds transfer (EFT)?

As of January 1, 2014, health plans and providers are not prohibited from using other networks such as Fedwire, card payment networks, etc.  However, if a provider requests that a health plan conduct EFT using the ACH Network, the health plan is required to do so.

In addition, ONLY healthcare EFTs via ACH offer providers the ability to automatically reassociate remittance information. Regardless of the network used, every effort should be made by the health plan to ensure that re-association between the payment and the remittance advice can be automated by providers.

In which version of the NACHA Operating Rules & Guidelines do I find the implementation specifications for the health care electronic funds transfers (EFT) standard, the CCD+Addenda?

The CCD+Addenda implementation specifications are detailed in the 2011 NACHA Operating Rules & Guidelines. CCD+Addenda stands for Corporate Credit or Debit with an Addenda.

NACHA (NACHA – The Electronic Payments Association) updates its operating rules and guidelines every year with a new version for use by financial institutions.  While the implementation specifications in the 2011 NACHA Operating Rules & Guidelines are the adopted standard for the CCD+Addenda, any version of the NACHA Operating Rules & Guidelines can be used as long as the implementation specifications for the CCD+Addenda do not differ from those in the 2011 version.

For instance, the implementation specifications for the CCD+Addenda in the 2012 NACHA Operating Rules & Guidelines can be used because they are exactly the same as those found in the 2011 NACHA Operating Rules & Guidelines.

We do not expect that the implementation specifications for the CCD+Addenda will change in future versions of the NACHA Operating Rules & Guidelines, but HHS will monitor the annual updates closely.

Does a health plan that uses a bank or clearinghouse to format its health care electronic funds transfer (EFT) claim payments have to comply with health care EFT standards?

Yes. As of January 1, 2014, if a health plan uses a clearinghouse or financial institution to format non-standard data into an ACH format in order to transmit a health care claim payment via the ACH Network (Automated Clearing House Network), the health plan is responsible for ensuring that the clearinghouse or financial institution uses the health care EFT standards. The CCD+Addenda format and the TRN Segment are the required health care EFT standards. CCD+Addenda stands for Corporate Credit or Debit with an Addenda.

The TRN Segment is the trace number segment that is the standard data content that must be put into the CCD+Addenda format. The implementation specifications for the CCD+Addenda are found in the 2011 NACHA Operating Rules & Guidelines. The implementation specifications for the TRN Segment are found in the ASC (Accredited Standards Committee) X12 835 TR3. If a health plan transmits electronic remittance alone through any network, then the ASC X12 835 TR3 is the required standard. If a health plan is transmitting payment information and remittance advice together through the ACH Network, or any network used for electronic funds transfers (EFT), the ASC X12 835 TR3 is the required standard.

When is the ASC X12 835 (payment and remittance advice) standard required when conducting electronic funds transfers (EFT)?

The ASC (Accredited Standards Committee) X12 835 TR3 standard is required when a health plan transmits payment information and remittance advice together through any network that transmits EFT. The ASC X12 835 TR3 standard also is required when transmitting remittance advice alone through any network. For more information on the X12 835 TR3 standard, see the ASC website:  http://www.x12.org/

Are the health care electronic funds transfers (EFT) standards, adopted in the interim final rule Administrative Simplification:  Adoption of Standards for Health Care Electronic Funds Transfers (EFTs) and Remittance Advice published in the Federal Register on January 10, 2012 (77 FR 1556), required when conducting EFT?

 Yes. As of January 1, 2014, whenever a health plan transmits an electronic health care claim payment through the ACH Network (Automated Clearing House Network), the adopted health care EFT standards are required.

Does compliance with operating rules apply to HIPAA transactions conducted within the same corporate entity and/or with other corporate entities?

Yes. Covered entities must conduct standard transactions, which includes using the adopted operating rules, when transmitting a covered transaction with another covered entity or within the same covered.

What do health plans have to do to comply witht he health care electronic funds transfers (EFT) standards adopted in the rule titled Administrative Simplification: Adoption of Standards for Health Care Electronic Funds Transfers (EFTS) and Remittance Advice Interim Final Rule published in the Federal Register on January 10, 2012 (77 RF 1556)?

As of January 1, 2014, health plans must use the CCD+Addenda as the format that they send to their bank to initiate an EFT through the ACH Network (Automated Clearinghouse Network).  Health plans must also include the X12 TRN Segment, described in the ASC  (Accredited Standards Committee) X12 835 TR3, as the data content to be included in the CCD+Addenda. CCD+Addenda stands for Corporate Credit or Debit with an Addenda. If a health plan is transmitting payment information and remittance advice together through the ACH Network, or any network used for electronic funds transfers (EFT), then the ASC X12 835 TR3 is the required standard.

Are there standard requirements for health plans when they use the ACH Network to pay health care claims via electronic funds transfers (EFT)?

Yes.  As of January 1, 2014, health plans must use the CCD+Addenda as the format that they send to their bank to initiate an EFT through the ACH Network (Automated Clearing House Network).  Health plans also are required to use the trace number segment (TRN Segment), described in the ASC (Accredited Standards Committee) X12 835 TR3 standard, as the data content to be included in the CCD+Addenda.
CCD+Addenda stands for Corporate Credit or Debit with an Addenda, an ACH file that is used to transmit payments in business to business transactions.  The implementation specifications for the CCD+Addenda are found in the 2011 NACHA Operating Rules & Guidelines.

If a health plan is transmitting payment information and remittance advice together through the ACH Network, or any other network used for electronic funds transfers (EFT), the ASC X12 835 TR3 is the adopted standard.

What do providers have to do to comply with the health care electronic funds transfers (EFT) standards adopted in the rule titled Administrative Simplification:  Adoption of Standards for Health Care Electronic Funds Transfers (EFTs) and Remittance Advice Interim Final Rule published in the Federal Register on January 10, 2012 (77 FR 1556)?

There are no requirements in the January 10, 2012 interim final rule that apply directly to providers.  The health care EFT standards adopted in the January 10, 2012 interim final rule apply to health plans and set requirements for how health plans transmit health care claim payments to providers via EFT.  However, providers may need to work with their vendors in order to realize the efficiencies possible by accepting EFT for health care claim payments.

What is the compliance date for the provisions in the Administrative Simplification:  Adoption of Standards for Health Care Electronic Funds Transfers (EFTs) and Remittance Advice Interim Final Rule published in the Federal Register on January 10, 2012 (77 FR 1556)?

January 1, 2014

What is the trace number segment (TRN Segment) that is required in an electronic funds transfer for health care claim payments?

The TRN Segment is a series of three data elements, plus one situational data element, that matches the TRN Segment in the electronic remittance advice (ERA).  The TRN Segment inclusion in the ERA is required by the adopted ASC (Accredited Standards Committee) X12 835 TR3 standard.  The TRN Segment includes data such as the payer identifier and an EFT trace number.

As of January 1, 2014, the TRN Segment must be included as part of the EFT when a health plan transmits health care claim payments via the ACH Network (Automated Clearing House Network) When the TRN Segment is sent in both the EFT and ERA (which describes the adjustments to the payment), it allows providers to more easily re-associate the EFT with its corresponding ERA.

The TRN Reassociation Trace Number as defined by ASC X12 835 version 5010 TR3 can exceed the 80 characters allowed in the CCD Addenda Record Payment Related Information field.  How should the excess characters be handled?

The TRN04 segment is a conditional segment that is rarely used, if it is used and the TRN data segment exceeds the 80 characters supported by the CCD, the TRN 04 should be truncated.

What is the relationship between an operating rule and a standard?

Operating rules support the adopted standards for health care transactions by fostering and enhancing uniform use of the standards across the health care industry.  The Affordable Care Act defines operating rules as “the necessary business rules and guidelines for the electronic exchange of information that are not defined by a standard or its implementation specifications [adopted under HIPAA].”  The statutory definition was codified at section 45 CFR 162.103 in the interim final rule titled “Administrative Simplification: Adoption of Operating Rules for Eligibility for a Health Plan and Health Care Claim Status Transactions” on July 8, 2011. 

Operating rules are business rules and guidelines that are not already defined by the standards, which means they do not duplicate what is in the standard.  Nor are operating rules inconsistent or in conflict with the standard.  Operating rules typically go above and beyond the standard with regard to a number of aspects, including data content.  Thus, it is possible for covered entities to implement both the operating rules and the standards in every case. 

Here is an example of how operating rules and standards work together where the operating rule calls for requirements above and beyond the standard:  For the eligibility for a health plan transaction, the adopted standard (ASC X12 TR3 270/271) states that “an information source is not required to generate an explicit response to an explicit [eligibility] request if their system is not capable of handling such requests.”  The operating rule for the same transaction requires a health plan or information source to support an explicit request for specific service types by returning an explicit response, according to the business rules and guidelines in Operating Rule Phase II Core 260. 

For more information on the health care EFT standards, see the interim final rule entitled Administrative Simplification:  Adoption of Standards for Health Care Electronic Funds Transfers (EFTs) and Remittance Advice Interim Final Rule published in the Federal Register on January 10, 2012 (FR 77  1556).  (http://www.gpo.gov/fdsys/pkg/FR-2012-01-10/pdf/2012-132.pdf)

For more information on NACHA and NACHA Operating Rules & Guidelines, see the NACHA website:  https://www.nacha.org/achrules

For more information on the ASC X12 835 standard, see the ASC website:  http://www.x12.org/