By Chris Seib, Chief Technology Officer and Co-Founder of InstaMed, CORE Phases I, II and III
December 17, 2013
From your perspective, what is the value of re-association of health payments?
The re-association of an ERA with an EFT is beneficial to both healthcare providers and payers. For providers, re-association enables efficient reconciliation and payment posting, which reduces administrative costs and accelerates cash flow. For payers, the re-association requirement enables payers to deliver more cost-effective and accurate payments, which reduces errors and call volume as the provider’s payment experience with that payer is enhanced. The cost savings with ERA/EFT eliminates postage expense and helps payers meet the Medical Loss Ratio (MLR) mandate.
Why hasn’t re-association been more widely adopted in healthcare?
Re-association involves two transactions; both of which are highly regulated and heretofore have been bifurcated between clearinghouses and payment processors. These businesses have large volumes of transactions to manage along with customer service and compliance, which makes innovation difficult. Frequently, payers use legacy systems or proprietary payment file formats that can be complicated to change and may not be compatible with other systems. It is difficult for payers to manage both the payment and healthcare information across multiple vendors in a coordinated manner while meeting the necessary levels of compliance. Additionally, many payers initially built and implemented ERA/EFT internally, and may not have the resources to make updates and support re-association.
Will the federal operating rules make a significant impact on the adoption of re-association or will it take something else to advance adoption of e-payments in healthcare?
ERA and EFT transactions are crucial to reducing administrative costs for payers and providers, and the operating rules, especially including the re-association rule, to ensure that the two transactions are streamlined and work in tandem. As payers meet the operating rules, they will also meet the re-association rule, which will impact adoption across the industry. However, it will also be crucial for payers to conduct ongoing, proactive provider adoption activities through multiple channels in order to drive provider adoption of ERA/EFT and re-association.
Chris Seib is the co-founder and Chief Technology Officer of InstaMed, the leading Healthcare Payments Network. With InstaMed, Chris is credited for the launch of a complete upgrade of the company’s hardware, system software, security and management components, various enhancements to the InstaMed Network for improved connectivity, integration and for maintenance of security and compliance, as well as achieving certifications for CORE Phases I and II, among other significant product and technology projects. Chris graduated from Harvey Mudd College with a BS in engineering and a minor in economics.