Electronic Funds Transfer (EFT or Direct Deposit) is a quick and simple method of receiving reimbursement from payers directly into your bank account as opposed to receiving a paper check. EFT helps to reduce administrative burden of processing paper checks by eliminating the need to manually create deposit tickets, copy checks, and spend time at the bank making deposits. This method of payment is simple and secure, and every healthcare provider should have EFT setup for all its payors.
ACA requires that healthcare EFT standard be implemented by January 1, 2014 (see http://www.gpo.gov/fdsys/pkg/FR-2012-08-10/pdf/2012-19557.pdf). This standard will require insurers to offer a standardized enrollment form. Medicare has for several years required EFT (Form CMS588) as part of the enrollment process and requires any provider not currently on EFT to register for EFT as part of their re-validation process.
CAQH now offers EFT enrollment to be accomplished by adding your banking information to your CAQH profile. This standardization is a very helpful step for all providers and should be utilized by every provider with a CAQH profile. The CAQH process offers a standard EFT enrollment form that insurers can elect to accept. At the time of this writing Aetna and Cigna participate in this EFT enrollment method. Read More from CAQH
Insurers using credit card payments
There is an alarming new trend in healthcare reimbursement where insurance companies are paying providers by sending a credit card number which the provider can process through their merchant service account to receive funds electronically or sending a pre-funded credit card to the provider. Since the payee will incur merchant service fees ranging up to 3%, or more when they manually key an item, providers effectively receive less than contracted reimbursement when receiving payments in this method. The AMA is speaking out about this practice. Review their recent article concerning this matter. Alert your administrative staff to this practice so you can immediately identify any payors using this method and take immediate action to stop the practice.
Payers receive inducements by card companies when they use this method of payment. They in effect shift the cost of moving money from themselves (where it belongs) to the provider; which should be entirely unacceptable.
Use EFT for all payers
As you enroll with payers and complete participation contracts, always elect payment via EFT. Reach out to current payers to enroll in EFT if you do not already have it setup. Proactively addressing this issue will help you operate more efficiently in the long run and also avoid any of the practices utilized by payers to shift the cost of payment to providers.
