January 2018 marked the fourth anniversary of the federal mandate that requires all payers to support electronic funds transfer (EFT) and electronic remittance advice (ERA) transactions to providers. The mandate, known as the CAQH CORE Phase III Operating Rules, was developed in part with a broader set of rules that were aimed at streamlining inefficient processes surrounding health care payment transactions. Essentially, electronic transactions were set forth in the federal mandate as a way to decrease the costs, delays, and errors that inherently come with paper transactions.
The Phase III Operating Rules mandate requires not only that payers offer provider networks with electronic payments, but also that those payments include the EFT trace number with the remittance to allow for reassociation with the ERA. The mandate further defines requirements around uniform use of claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs), ERA/EFT enrollment standards, ERA/EFT association standards, and claim payment and remittance infrastructure standards.
Geisinger Health Plan first introduced electronic data interchange in 2008 in response to provider requests for payments via EFT and then later through ERA. GHP set up an online form for providers to enroll for EFT payments, which providers had to download and print, then mail back. For ERA enrollment, providers had a separate enrollment process that included a different form and letter.
After providers were successfully enrolled, the execution of payment was also administered directly by Geisinger resources. This required labor-intensive work of entering ERA/EFT information, creating payment files to send to the bank, and routing ERA files to multiple clearinghouses. These processes involved multiple departments at the health plan. The IT department managed all HIPAA compliance changes. Accounting operations managed rejected automated clearinghouse (ACH) transactions. Customer service took provider payment calls and concerns. Handling ERA/EFT transactions with Geisinger resources created a complex IT management structure and greatly increased compliance efforts.
For providers who did not enroll in ERA/EFT, Geisinger worked with an outside vendor for the printing and mailing of paper checks. The two separate processes for provider payments decreased visibility into payment reporting and required the health plan to manage multiple contracts, fees, and IT resources.
Despite these payment challenges, ERA/EFT adoption among providers was seemingly a success when looking at the dollar volume that went out as electronic payments compared with paper checks. However, upon closer inspection, it was clear that a high percentage of dollar volume delivered via EFT did not equate to high adoption of electronic transactions. Adoption by dollar volume looks at the total value of all ERA/EFT transactions being sent out, instead of capturing exactly how many transactions are ERA/EFT instead of paper checks.
Geisinger became increasingly concerned with the significant challenges associated with paper checks and explanation of payments (EOPs). According to industry averages, each paper check from a payer costs $3.46, while each manual EOP costs $6.19 compared with 78 cents and $1 respectively for each of those transactions to be sent electronically. These figures were similar to the amounts Geisinger experienced.
The costs alone were enough to motivate the health plan to reduce paper transactions. However, the challenges to manage the outside vendor who issued the paper checks required that Geisnger immediately make a change. The change was needed as the outside vendor would send a paper check and EOP to the wrong provider, increasing call volume and frustration for providers and Geisinger employees.
In July 2015, the health plan made a change and selected a payments network to streamline and consolidate the provider payment process. Here are the three objectives and the methods used to achieve them:
All forms of payment in health care were supported by the payments network, which connects the entire health care economy. As a result, Geisinger ended its check-vendor relationship and in-house processes for provider payments. In moving to one source for all payment data and transactions, the health plan also streamlined a complex IT management structure and eliminated excess costs and administrative effort.
Geisinger was able to connect with providers already receiving ERA/EFT transactions on the payments network. Doing so allowed the health plan to achieve 60% provider adoption of ERA/EFT transactions right away. It also leveraged a customized multitouch provider adoption plan to increase provider education and adoption of electronic transactions.
GHP eliminated the inefficiencies associated with paper processes and check-only vendors by handling all aspects of the payment process and all compliance efforts on one platform. This reduced payment errors and relieved provider confusion by enabling the health plan’s providers to reconcile every payment received from Geisinger. The ERA/EFT transaction contains the payment transaction and the remittance transaction simultaneously generated and reconciled at the point of origination on the payments network. Additionally, the ERA/EFT transaction includes the TRN Re-association Trace Number, in accordance with CAQH CORE Phase III Operating Rules.
Geisinger Health Plan currently delivers 98% of all dollar volume and 91% of all transactions for provider payments via ERA/EFT.
Now that Geisinger is confident in the payment process for providers, it will continue to innovate new ways to improve the member experience. The goal is to be not just one of the top companies for members and not just one of the top health care organizations, but one of top organizations among all the companies in the United States.
With the success of ERA/EFT payments to providers as proof, Geisinger is confident the member experience goal can be achieved as well.