Electronic Funds Transfers (Direct Deposit)
Important! If you send electronic claims to payers, you must also be set up to receive electronic Payments by Oct. 16, 2010.
With Electronic Funds Transfer (EFT), instead of receiving checks, your practice can have payments deposited directly into your account at a financial institution of your choice on the payment due date. With EFT, you benefit from prompt funds availability on the due date, thus improving cash flow. It can save you time, reduce unnecessary paper in your office, improve access to funds, eliminate risk of lost mail/checks, avoid the hassle of depositing checks and make reconciliation of payments easier. Payments are transferred electronically through the Automated Clearing House (ACH) to your bank account. Many practices, regardless of size, have found EFT improves their financial operations.
Effective October 16, 2010, Ohio law regulating health plans requires plans to transmit electronically any payment with respect to claims that the third party payer receives electronically and pays to a contracted provider (Ohio Revised Code Section 3901.381). Also, the law states that a provider shall not refuse to accept an electronic payment on the basis that the payment was transmitted electronically.
The Ohio Department of Insurance has provided some clarification regarding the law. ODI says they will expect all payers to demonstrate by supported documentation, that they have the ability to pay claims electronically to practices that submitted their claims electronically for payment, and will cite as a violation against any insurance payer who fails to do so. However, should the payer be unable to do so because the provider refused to share the necessary information to do so, the payer will be exempt from penalty.
To show proof of a practice’s unwillingness to provide the information necessary for the electronic transfer to take place, a practice could be required to sign an affidavit to the effect they are declining electronic funds transfer and are unwilling to provide the information required by the carrier. The bottom line is, if you do not want to receive funds electronically and you tell the payer in writing, the payer will continue to pay you by check.
While EFT does pose some possible concerns, it can also offer benefits to practices. For that reason, along with the increased regulation from the state, the OSMA encourages you to get your practice ready for EFT as soon as possible. We are also working closely with ODI and the payers to make sure that this and other changes are implemented as smoothly as possible for practices.
Getting Started
If you send electronic claims to payers, you should make sure you are setup to receive electronic funds from them as well. Follow the links below for more information, including the specific payer application form(s) required. If you do not see a link to one of your payer's forms, please contact that payer's provider services. Typically, you will need to have the following information to complete the applications.
- Bank name and address
- Bank Account Type (example: checking or savings)
- Nine-digit routing/ABA number
- Full account number with leading zeros if necessary
- Primary account holder name
- Tax ID# of account holder
- Payee ID (on your current remittance advice)
Resources
Specific Payer EFT Enrollment Forms
Aetna
Anthem
CIGNA
Humana
MMO
UnitedHealthcare
American Medical Association
Frequently Asked Questions regarding electronic funds transfer agreements
Credit and Consumer Rights
It is important to check credit billing and electronic fund transfer account statements regularly because these documents may contain mistakes that could damage your credit status or reflect improper charges or transfers. If you find an error or discrepancy, notify the company and dispute the error immediately. The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) establish procedures for resolving mistakes on credit billing and electronic fund transfer account statements, including:
- Charges or electronic fund transfers that you – or anyone you have authorized to use your account – have not made
- Charges or electronic fund transfers that are incorrectly identified or show the wrong date or amount
- Math errors
- Failure to post payments, credits, or electronic fund transfers properly
- Failure to send bills to your current address – provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends;
- Charges or electronic fund transfers for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.
The FCBA generally applies only to “open end” credit accounts – credit cards and revolving charge accounts, like department store accounts. It does not apply to loans or credit sales that are paid according to a fixed schedule until the entire amount is paid back, like an automobile loan. The EFTA applies to electronic fund transfers, like those involving automatic teller machines (ATMs), point-of-sale debit transactions, and other electronic banking transactions.