Heathcare Payments and the ACH – Turning Mandates into Opportunities

by Robert Williams, product development director, Retail Payments Office, Federal Reserve Bank of Atlanta

Moving payments electronically is an admirable goal designed to create efficiencies, but for many financial institutions and their customers, the process of turning ideals into efficient operations requires preparation and automation.  

The upcoming healthcare payment mandates are a prime example of how the realization of efficiencies requires some planning.  

There are readily available solutions to aid in this admirable goal. In fact, proactive identification of Healthcare Providers in need of remittance information and the automated and secure delivery of this information presents financial institutions with opportunities to deliver value added services to their customers and to set the stage for all to benefit from the efficiencies of ACH payments.

The Federal Reserve Banks offer a number of services that can help institutions facilitate efficient adoption of electronic payments, including healthcare payments with their attendant mandates.

Identifying Opportunities and Preparing to Deliver

Chances are that if your institution has Healthcare Providers within its customer base, these providers are already receiving electronic payments.  For those providers not receiving electronic payments, it is likely that they will soon.

How can your institution know when it needs to be ready to provide the healthcare remittance information upon request, or better yet, how can your institution proactively identify customers to approach with automated information solutions?

One way to identify electronic healthcare payments flowing through your financial institution is enabled by the mandated population of “HCCLAIMPMT” in the Company Entry Description field.  

The Federal Reserve Banks’ FedACH Risk® RDFI Alert Service lets your institution create search criteria to automatically look for this description and receive an email notification every time a “HCCLAIMPMT” transaction comes through to one of its providers.  

Now you can know if and when your customers receive these transactions, and you can, at a minimum, prepare to satisfy the requirement to provide payment information upon request.  Better yet, you can go beyond the mandate and proactively contact the providers identified and offer them an automated report of the payment information.

Fostering Customer Receptivity to Acceptance of ACH Transactions

One step toward reaping the efficiencies of electronic payment transactions is building a base of ACH remittance receivers.

Some business customers, Healthcare Providers included, may hesitate to authorize electronic transactions.  Perhaps they feel a certain loss of control when they provide their account and routing information to an ACH originator.  Some may be concerned about unauthorized debits.

You can help foster acceptance of electronic transactions by giving your customers tools for monitoring their account activity.  You can empower them to know who is sending ACH transactions into their accounts and enable them to initiate immediate returns if they find unauthorized transactions.

The FedACH Risk RDFI-Alert Service lets you send automated email notifications to customers for all items they receive.  These notifications carry a PDF-formatted report that identifies the transaction type (credit or debit), amount, originator name and SEC code, along with other information, for each item the customer receives.  

Using this information, your customer can easily and promptly identify unexpected transactions and can notify you of any in need of return.  Customers can now have visibility into and control of their ACH receipt activity, and you can be the one to provide them with this powerful tool.

Delivering the Reassociation Trace Number (TRN)

Now it is time for the easy part.  The NACHA Operating Rules and Guidelines say your institution, as of September 20, 2013, must be able to provide Healthcare Payment Related information, including the Reassociation Trace Number, to providers upon request and be able to do so in a secure manner.   

There’s really no need to wait to be asked.  The ability to provide this information on an automated basis and in a secure manner is available today.  Supplying this information to your providers is just good customer service.

The Federal Reserve Banks’ FedACH FedPayments® Reporter Service lets your institution set up automatically-generated, human-readable remittance advice detail or summary reports for the customers you designate and automatically deliver these reports to them via an encrypted email portal.  The service can also deliver reports to a designated FedLine® access solution to facilitate population of your institution’s online banking application.

The remittance advice reports carry payment detail including the originator name, SEC code, amount, transaction description and the remittance transaction Reassociation Trace Number.  These same reports can be generated in a machine-readable file format to facilitate straight-through processing for those customers with EDI-compatible accounts receivable systems.

Creating an Opportunity

Investigate the tools available from the Federal Reserve Banks and satisfy your customers with your institution’s ability to help them realize the efficiencies of electronic payments.  Visit FRBservices.org and its FedACH Risk RDFI-Alert and FedPayments Reporter Service product pages to see examples of how these services can help your institution turn mandates into opportunities.

“Federal Reserve Financial Services,” ”FedACH Risk,” “FedPayments” and “FedLine” are registered service marks of the Federal Reserve Banks. A complete list of marks owned by the Federal Reserve Banks is available at https://www.frbservices.org/terms/index.html.



Robert Williams serves the banking industry and the Federal Reserve Banks as a staff member of the Retail Payments Office.  In his current role as Product Development Director, Robert develops new ACH and Check products and services for Depository Financial Institutions.  Most of his 13 years with the Federal Reserve has been spent understanding the needs of the industry and developing solutions to meet these needs.