Federal rule to streamline electronic fund transfers and other billing transactions

Administrative simplification rules could make the billing process more efficient, and save doctors and hospitals $4.5 billion over 10 years.

By Charles Fiegl — Posted Aug. 16, 2012

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

New operating rules regulating electronic claims transaction services in the health care industry are aimed at enrolling more physician practices in these time- and money-saving programs, officials say.

The Centers for Medicare & Medicaid Services published an Aug. 7 regulation applying uniform business practices for electronic fund transfers and remittance advice transactions. The rule establishes uniform enrollment standards for health insurers so physicians and hospitals can receive transactions electronically from multiple payers.

The vast majority of claims and payment transactions for physician services are done on paper. About 70% of health care claim payments are made using paper checks, according to CMS. About 75% of remittances are sent by mail.

“These new rules will cut red tape, save money and ensure doctors spend more time seeing patients and less time filling out forms,” said Dept. of Health and Human Services Secretary Kathleen Sebelius.

The Obama administration has adopted other regulations aimed at simplifying administration and billing processes in health care. Federal officials have cited studies that the average physician spends three weeks a year on billing and needs at least a part-time manager to assist with insurance-related work.

Health payers, insurers and other entities must be in compliance with the electronic funds transfer and remittance advice rules by Jan. 1, 2014. Physician offices will benefit from a common format for enrolling for these transactions, said Robert Tennant, senior policy adviser with the Medical Group Management Assn.

Practices enrolling in electronic programs will be aided by more efficient accounting systems. For instance, checks from insurance companies often include payment for several claims. A practice will account for money received to ensure it matches what had been billed. The rule standardizes the automation process that can associate electronic transfers with remittances for health services. All programs from different insurers would “speak” the same language, Tennant said.

“This is another step toward where we’re trying to get to, and there will be more to come,” he said. “The key is: Can practices take advantage of the rules?”

The cost of implementing the rules is estimated to cost up to $2.7 billion for government and commercial health plans. However, these entities, along with hospitals and physician offices, are expected to save $3 billion to $4.5 billion over the next 10 years.

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn