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Medical Billing Essentials

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Medical Billing Essentials: ERA and EFT Enrollment Use these electronic systems to save money for your practice
By Eric Brodsky, FACMPE

ARE YOU AWARE of the tremendous benefits associated with using Transfer (EFT) in your practice? We are all personally familiar with receiving bills and statements in an electronic format as well as making payment transactions online. The same opportunities apply with business payments and notices, and healthcare practices should take advantage of the potential savings.

So what are ERA and EFT exactly? ERA is the electronic version of an explanation of benefits. EFT is the electronic version of a paper check.

In 2012, the Centers for Medicare and Medicaid, as part of the Affordable Care Act, published a regulation to streamline healthcare administrative transactions by establishing ERA/EFT standards that would result in a collective savings of between $3 and $5 billion over the next ten years. Furthermore, studies have shown that the cost of claims via an Automated Clearinghouse (ACH) averages only $0.34 versus $10.73 or more for other EFT payment types.

Aside from the cost-savings, other benefits of switching from paper to EFT and ERA include:

  • Dramatic increase in staff efficiency by reducing time spent on data input.
  • Quicker receipt of payments.
  • Reduced days in accounts receivable.
  • Secure payment transactions with a reduction in potential fraud associated with stolen paper checks. • Reduction in transaction posting errors with proper use of ERA files.
  • Automatic re-association of ERAs when paired with EFTs.

There is almost no downside to enrollment for ERA and EFT. Most commercial and government payers offer easy ways to enroll. However, there can be challenges with some of the smaller payers. Also, in some instances there are third parties involved with payment transactions and those entities may charge a percentage fee for the processing of each EFT. The Medical Group Management Association (MGMA) has been a strong advocate for the advancement of administrative simplification in healthcare and has been pushing the federal government to implement policies to reduce or completely eliminate fees associated with EFT. In the meantime, there are situations where it still makes financial sense to enroll with third parties even if they apply a fee, as long as it’s not excessive.

In my previous work-life, the practice I represented for nine years was able to achieve 90% payer adoption for both ERA and EFT. Yet according to the Council for Affordable Quality Healthcare (CAQH), in 2015, practice payer adoption rates were only 55% for ERA and 62% for EFT. It appears that we still have a long way to go in this endeavor.

So how do you enroll for ERA and EFT? ERA enrollment begins with your clearinghouse if you’re using one. Medical practices use clearinghouses primarily for claims submission; however, ERA enrollment is a secondary feature that most of them provide. It’s important to work closely with your clearinghouse to ensure that you are indeed enrolled with all payers and that nothing slips through the cracks. If you’re enrolled and still seeing paper remittances, there’s something awry.

EFT enrollment can be bit trickier. Clearinghouses typically do not facilitate EFT enrollment between providers and payers (although some payers include EFT enrollment with their ERA application). So the next option is to contact the payers directly and request an application. The good news is that there is an increasing number of third parties in which you can enroll with multiple payers via one online application. An excellent example is CAQH whose EnrollHub program includes large payers such as Aetna, Cigna, and Humana.

ERA and EFT enrollment with smaller payers can be a real challenge. Not many people are aware that if a provider requests enrollment in ERA and/ or EFT with a HIPAA-covered entity and that entity continues to provide paper documents, then that entity is in violation of HIPAA. So beyond the waste of having your billing staff process paper transactions manually, the payers are mandated to convert everything to an electronic format.

In this unprecedented era for the healthcare industry, every penny must be accounted for and cost-cutting measures are instrumental to the survival of a practice. And the best part of moving to implement ERA/EFT? There are typically no costs except for the time spent on the enrollment process. Take the time today to work with your billing staff to ensure that your practice is enrolled in ERA/EFT with as many plans as possible and you’ll see immediate rewards in efficiency.

Eric Brodsky, FACMPE, is a senior consultant at PBC Advisors, LLC, in Oak Brook. PBC provides business and management consulting and accounting services to physician practices and hospital systems. For more information, visit

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