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It sounds like a great achievement – 80 percent of dollar volume sent as ERA/EFT to providers! You’re only 20 percent away from full ERA/EFT adoption, right? Not quite. Some in the industry would have you believe they have achieved huge milestones when it comes to ERA/EFT adoption, but usually the achievements are quantified in dollar volume. ERA/EFT adoption is still low, as 88 percent of providers report receiving paper payments from one or more of their payers. So while many payers believe they’ve achieved high adoption based on dollar volume, there’s a significant amount of paper still going out.

The Trouble With Paper Checks
Overall, the ability to support these paper-based transactions requires manual processes that cost the industry significant resources – consider that 16 percent of total healthcare spending is on administrative costs. At the organizational level, the average time spent on processing a manual paper-based transaction is eight minutes, but can be as long as 30 minutes and costs three dollars more when compared to electronic transactions. Payers are beginning to voice their frustration at the high costs of paper payments. Almost a third of payers said that cost-reduction strategies were their top priority this year.

Ready for Electronic Transactions
The data is clear: paper transactions are costly and time-consuming. Adoption of electronic transactions has the very real potential to deliver significant value to a payer organization’s bottom-line. The data also tells us that relations with provider networks would benefit from electronic transactions: 85 percent of providers said that they preferred to receive payer payments via ERA/EFT, while only 13 percent said they prefer payments in the form of paper checks and two percent preferred virtual card payments.

Dollar Volume Versus Payment Transactions
Despite the considerable costs of paper checks and provider preference for electronic payments, payers are still struggling to fully adopt ERA/EFT. The problem is that the industry looks at ERA/EFT adoption as a percentage of the total amount a payer pays to providers, instead of capturing how many of those transactions were paper checks versus ERA/EFT.

How many paper checks are still sent out when a payer has achieved 80 percent dollar volume adoption? Chances are that it’s still quite a few.

Let’s say a payer has ten providers to pay. The first three payments are worth $8,000 and are sent via ERA/EFT. The other seven payments are worth $2,000 combined and are sent via paper check. Yes, in that scenario, the payer has achieved 80 percent adoption of ERA/EFT, but still had to send out 70 percent of payment transactions with paper checks.

Time to Change the Conversation About ERA/EFT Adoption
It’s simple. Dollar volume looks at the amount of a transaction. Regardless of how much a check is worth, the payer still has to spend money and resources to send it. Instead, payers must examine the total number of payment transactions that are still going out via paper check for a more accurate view on adoption.

Now is the time to change the conversation about ERA/EFT adoption from dollar volume to payment transaction count. This change will help payers better understand the makeup of their claim payments to providers and make achieving higher ERA/EFT adoption more likely in the very near future.

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