Electronic Funds Transfer (EFT) and Electronic Remittance Advice (ETAor ETA) are electronic methods used in medical billing to securely transfer payment and related information between healthcare providers and payers. This article discusses the benefits of EFT and ETA in medical billing.
EFT allows for the direct deposit of payments into a provider’s bank account, while ETA provides for the electronic transmission of payment explanations, or “remittance advice,” to providers.
These methods can save time and reduce errors in the billing process, as well as provide more timely payment for providers. Additionally, using EFT and ETA in medical billing can streamline administrative tasks and reduce costs for providers and payers.
What is EFT?
EFT, short for Electronic Funds Transfer, is a digital method employed by healthcare organizations to securely transfer funds to providers’ accounts to pay for medical services.
The EFT message comprises crucial details such as the amount to be paid, identification of both the payer and payee, bank account information of both parties, routing numbers, and the date of payment.
It is a streamlined way for health plans to make payments to providers, eliminating the need for paper checks and reducing the chance of errors. Moreover, it enables more timely payments and streamlines administrative tasks for providers and payers.
EFT in medical billing can be a highly beneficial tool for streamlining payments to your practice. It eliminates the need for paper checks or in-person interactions by facilitating electronic transfers between payers and patients.
With EFT, particular features like patient payment tools within your practice management software (PMS) would be functional. It simplifies the payment process, making it more efficient and convenient for patients and your practice.
What is ETA?
An ERA, or Electronic Remittance Advice, is a digital explanation provided by health plans to providers detailing the payment of a claim.
It includes information on how the health plan has adjusted charges, considering various factors such as agreements with the provider, secondary payers, coverage under the benefit plan, and the patient’s expected copayments or coinsurance.
It serves as a clear breakdown of the claim payment, making it easier for providers to understand and reconcile their billing. This digital method is more efficient, accurate, and faster than traditional paper-based methods.
ERA in medical billing can provide an in-depth breakdown of a patient’s claims, including information on claims that have been paid or denied and the final status of the claim. It also includes the adjusted amount that the patient owes.
Although the name includes the word “advice,” it is essential to note that the information provided in the ETA is mandatory and not just a suggestion.
It serves as a clear and concise summary of the payment status of claims, enabling providers to reconcile their billing and understand the payment process more accessible.
Benefits Of EFT And ETA In Medical Billing
Benefits of ETA
There are several advantages to using ETA in medical billing, including saving time for administrative tasks and faster payment processing. Some of the critical benefits of ETAinclude the following:
- Streamlining the billing process: ERAs are electronic, making them easy to create and send. This saves time for front-office staff, who can focus on other tasks, such as patient interactions
- Reducing errors: The high volume of claims processed in the medical industry can lead to mistakes when dealing with EOBs (Explanation of Benefits) manually. ETAreduces the frequency of errors, resulting in a more comprehensive and accurate set of billing communications
- Improved grouping: With EOBs, billing and payment details are sent to patients after each encounter. ETAallows you to group the patient’s claims into one communication, making receiving the payments more efficient
- Clear distinctions between unpaid and paid encounters: With ERA, it is easier to follow which of the patients have and hasn’t paid, resulting in more realistic accounts receivable records
- Streamlined denials management: With ERA, denials, and approvals can be grouped, making it easier to focus on denied claims that need to be resolved for faster revenue
- Analytics and reports: ETAplatforms often include tools that provide insights into how well the practice collects patient payments, allowing for performance improvements
- Faster patient collections: ETAis trackable, making it easier to follow up with patients behind on payments and receive payment sooner
Benefits of EFT
EFT (Electronic Funds Transfer) can significantly improve medical billing processes in several ways, including:
- Increased cash flow: By eliminating the delays and obstacles associated with paper payments, EFT paired with ETA(Electronic Remittance Advice) enables patients to know what they owe and pay it immediately, resulting in more timely costs for providers
- Clear identification of paid services for EFT with ETAautomatically links patient payments to the corresponding services, eliminating the need to manually file EOBs (Explanation of Benefits) to match costs to services
- Digital records: EFT makes paper payments that require extra effort to link and track together and an easy-to-follow electronic payment trail, whereas This results in a more accurate and organized client account history
- Enhanced security: EFT provides built-in cybersecurity, protecting against breaches and reducing the risk for both the practice and patients
- Improved overall financial performance: The benefits of EFT, when combined, can lead to improved financial performance for the practice, including faster payment collection and better tracking of unpaid bills
- Medical billing services: Implementing EFT and ETAcan be costly and time-consuming, so some providers may outsource these tasks to third-party services to take advantage of the benefits of EFT without the added burden
Conclusion
EFT (Electronic Funds Transfer) and ETA(Electronic Remittance Advice) are electronic methods used in medical billing to securely transfer payment and related information between healthcare providers and payers.
EFT allows for the direct deposit of payments into a provider’s bank account, while ETA provides for the electronic transmission of payment explanations, or “remittance advice,” to providers.
These methods can save time and reduce errors in the billing process, as well as provide more timely payment for providers. Additionally, using EFT and ETA can help to streamline administrative tasks and reduce costs for providers and payers.
EFT and ETA can also improve the cash flow, easier identification of services paid for, no manual EOB filing, digital accounting records, payment search tools, payment security, and overall financial improvements.
Overall, EFT and ETA can be valuable tools for medical practices looking to improve their billing processes, increase efficiency, and enhance the patient experience.
