Health Plans and the Healthcare EFT Standard –What Is It and What Are You Required to Offer Providers?

The Administrative Simplification: Adoption of Standards for Health Care Electronic Funds Transfers (EFTs) and Remittance Advice as mandated by the Patient Protection and Affordable Care Act (ACA) became a final rule on July 11, 2012, with a compliance date for all covered entities of January 1, 2014.  The rule defined the healthcare EFT standard as follows:

  • the NACHA CCD+Addenda for all EFT transactions processed through the ACH Network
  • the content of the Addenda Record defines as the ASC X12 835 TRN Segment as specified in the X12 835TR3 Report (ASCX12/005010X221)
  • the TRN Segment implementation specifications as described in the X12 835 TR3

The final rule states “The health care EFT standards adopted in this interim final rule…apply to transactions that originate with health plans…. In practice, health plans will only have to use the health care EFT standards adopted herein if the provider wants to receive healthcare claim payments via EFT through the ACH Network.”  Health plans may choose to offer the healthcare EFT standard to all Providers to help reduce operating costs and improve efficiencies,  but Providers have the right under HIPAA to request the delivery of any HIPAA standard transaction and the health plan must delivery the requested standard to the Provider (45 CFR §162.925).  In addition, Matthew Albright, Director of the Administrative Simplification Group of the Office of E-Health Standards and Services (OESS) at CMS, stated during a CAQH CORE CMS OESS Open Mic Session on December 17 “that health plans may not incentivize a provider to use an alternate transaction method other than the adopted standard or disincentivize a provider from using a standard transaction.”  

Section 1104 of the ACA (h) Compliance (1) Health Plan Certification states that health plans must certify with the Secretary of Health and Human Services that their data and information systems are in compliance with applicable standards and associated operating rules for electronic funds transfers, eligibility for a health plan, health claims status, and healthcare payment and remittance advice no later than January 1, 2014.  The certification process is to be defined by regulation that as of December 19, 2013 has not been issued.  CMS has stated that the deadline for certification will change and the certification process interim final rule will be issued early in 2014.  Changes to the certification date will not impact the implementation dates for the healthcare EFT standard and related operating rules. Health plans must still be able to offer Providers the healthcare EFT standard and comply with the EFT & ERA Operating Rules by January 1, 2014.

Section 1104 of the ACA also states that the Secretary shall assess penalty fees against health plans that fail to meet the certification and documentation requirements for the healthcare EFT standards and related operating rules.  The penalty fees are in the amount of $1 per covered life per day until certification is complete, not to exceed $20 per covered life.  The maximum fee will increase to $40 per covered life for knowingly providing inaccurate or incomplete information in the certification process. 

The interim final rule identified the healthcare EFT standard as the NACHA CCD+Addenda.  The final rule does not prohibit or adopt any standards for healthcare EFTs transmitted outside of the ACH Network and does specifically mention wire transfer and payment cards as EFT options.  However, wire transfers and payment cards are not the healthcare EFT standard. All health plans must be able to deliver the healthcare EFT standard, NACHA’s CCD+Addenda, if it is requested by the Provider.