HFMA Philadelphia Chapter Newsletter

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) mandated electronic claim payments from health plans nationally. Several states including Minnesota expanded the electronic data interchange (EDI) transaction component of HIPAA to include claims payers other than health plans. Patient accounting professionals should have a strategy for acquiring electronic remittance information from more of their trading partners and work to increase their receipt of electronic funds transfers for the “money part” of claims payments. The Best Practices for electronic funds transfer (EFT) receipt are laid out in some detail in the HIPAA Implementation Guideline but are not followed by some payers. HIPAA’s Implementation Guide for the electronic claim payment specifies different banking industry formats for electronic claim payments, and providers would be well served to know that some are better suited than others to reducing work in the business office. Unwary providers may receive an electronic payment format that is inappropriate for automated remittance processing. It is important to know what payment format to ask for and what not to accept from payers.

Are Your Funds Transfers HIPAA Compliant?
Hospital providers have been receiving electronic claim payments since the early 1990s for Medicare Part A. In 2003, a national standard format was mandated by HIPAA, the ANSI ASC X12 Claim Payment/ Remittance Advice (835). Today, providers are receiving 835s from an increasing number of payers. The management of funds transfers and their “reassociation” with 835 remittance data sent separately becomes more important as payers convert from paper to EDI.

Reassociation and Why It Is Important
Since the 835 standard was created, implementation guidelines have stressed the importance of “reassociation.” In a paper world, providers can visually confirm that a check amount equals a total payment amount referenced on a paper statement. In an electronic world, providers may obtain an electronic remittance file from the payer’s website or through a clearinghouse arrangement. The Electronic Funds Transfer, the “payment” related to that remittance information, moves from the payer’s bank to the provider’s bank electronically through the banking system. When payments and remittances are sent separately, providers must ensure that a matching amount of money has been received in their bank account before they post an electronic remittance file. One of the added challenges is that not only may money and data be sent separately, they may be sent several days apart.