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Guest Blogger: Bill Marvin, President & CEO, InstaMed

Recently, the Centers for Medicare & Medicaid Services (CMS) announced a final rule adopting electronic funds transfer (EFT) standards, which are part of the ACA provisions that call for improved administrative efficiency.  While this rule is just one piece of the ACA operating rules, the adoption of the rule for EFT standards lays a positive foundation for the future of both EFT and ERA (electronic remittance advice).  However, a couple of serious flaws in the rule will hinder the industry’s focus on and progress toward achieving efficiency.

Overview of CCD+ and CTX Files

The rule describes two types of ACH files: the Corporate Credit or Debit Entry (CCD+) and the Corporate Trade Exchange Entry (CTX).  The main difference between these files is that the CCD+ file transmits data associated with the EFT payment in an addenda record, which holds up to 80 characters, while the CTX file can hold a much larger amount of data – for a fee charged by banks.

Where’s the Trace Number Requirement?

While the rule recommends that the CCD+ file and remittance have a trace number, it does not (but should!) require the use of a trace number.  For providers, reconciliation is one of the most significant expenses, and the rule should have delivered more to reduce these costs.  For efficient reconciliation, the best practice in delivering electronic payments to providers is to re-associate the payment with the remittance by including the trace number in the CCD+ file.

CTX Serves No Purpose!

The CTX file should not be included in the rule, as the file creates high costs and data processing risks.  To deliver ERA/EFT using the CTX file, payers first must create the ERA, output it from the payer’s system and manipulate it to create CTX records.  Then, the file must be parsed on the provider’s system and reconstructed to create the 835.  This process is risky, unnecessary and serves no purpose other than to afford banks another reason to charge fees for CTX transactions.

Setting the Record Straight: Best Practices to Achieve Efficiency

Despite the flaws in the final EFT rule, payers should only use the CCD+ file with the trace number to associate the ERA and the EFT and achieve the highest level of efficiency.  Click here for a list of best practices in integrating EFT payments with ERAs to reduce administrative costs.

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