WEDI Issues Electronic Payments Guidance to Address Industry Concerns with ACH EFT Transactions, Virtual Credit Cards

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“Electronic Payments: Guiding Principles” outlines best practices to which all stakeholders are encouraged to adhere regarding the implementation and ongoing use of epayments

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We have developed the ePayments Principles to create a foundation for expanded use of the automated payment transaction, while at the same time instituting a framework for the appropriate use of alternative payment methodologies.

WEDI, the nation’s leading authority on the use of health IT to create efficiencies in healthcare information exchange, announced the release of a wide-ranging set of industry best practices, entitled Electronic Payments: Guiding Principles. Developed by a multi-stakeholder ePayments Taskforce that included representatives from the health plan, provider, clearinghouse, banking and government sectors, the guidance addresses concerns raised by respondents of WEDI’s ERA/EFT survey in early Spring 2016.

The ERA/EFT survey found that about 25 percent of provider organizations reported paying fees for use of the Automated Clearing House (ACH) Electronic Funds Transfer (EFT) transaction. In addition, a full 40 percent were required to accept payment from a health plan in the form of a “virtual” credit card — a 16-digit credit card number sent to the provider for processing through their card terminal, with the provider responsible for all associated transaction fees. In establishing a consensus-driven set of principles that each impacted stakeholder can review and adopt through this document, WEDI anticipates driving increased use of ACH EFT, while at the same time establishing guidelines for the use of alternative payment options such as these virtual credit cards.

“WEDI’s mission is clear – identify opportunities for industry collaboration that lead directly to operational efficiencies in the healthcare environment,” stated Charles Steller, WEDI president and CEO. “In support of that mission, we have developed the ePayments Principles to create a foundation for expanded use of the automated payment transaction, while at the same time instituting a framework for the appropriate use of alternative payment methodologies.”

“The benefits of using ACH EFT in healthcare are well established. The government estimates that the savings of using ACH EFT and electronic remittance advice (ERA) standards and operating rules is as much as $4.5 billion for government and commercial health plans, hospitals, physician practices and others over ten years,” said Jay Eisenstock, head of provider solutions for Aetna and co-chair of the WEDI ePayments Taskforce. “However, provider adoption has not been as rapid as many had hoped due to reluctance to modify existing workflows or purchase supporting software. We are hopeful that the ePayments Principles will serve as a catalyst for increased industry use of this important transaction.”

In addition to the general introduction to issues related to electronic payments and an outline of the various epayments federal mandates, the document identifies fourteen recommended guiding principles to which all impacted stakeholders are encouraged to adhere regarding the implementation and ongoing use of epayments. The principles were developed to guide the industry in the use of all epayment methodologies and leverage the advantages of the administrative simplification opportunities associated with use of the ACH EFT and ERA standards and operating rules. Some key principles included in the guidance document include:

  • A health plan, clearinghouse or payment-related vendor should complete the ACH EFT enrollment process to facilitate ACH EFT payments within 30 days of receipt of provider enrollment information.
  • Health plans, clearinghouses and payment-related vendors should not delay ongoing payments when a provider elects to begin receiving any form of electronic payment.
  • The provider should not be subject to any hidden fees. Before a provider may be paid via electronic payment, the health plan, clearinghouse or payment-related vendor must: (a) notify providers regarding their fees associated with this payment method; (b) advise providers to check with any of their contracted vendors (i.e., their credit card merchant processer) regarding any additional administrative fees; and (c) notify providers about the availability of an ACH EFT payment option.
  • Before a provider may be paid via an epayment method other than ACH EFT, the health plan, clearinghouse or payment-related vendor should receive explicit agreement (“opt-in”) from the provider.
  • When a health plan or any of their clearinghouses or payment-related vendors offers an ACH EFT payment option, it should offer an ACH EFT option with no origination fees.
  • There should be transparency from health plans, clearinghouses and payment-related vendors regarding any required transition from paper-based payments to electronic payments, and providers should be given a minimum 90-day notice before the effective date of the electronic payment mandate and must opt-in to any nonstandard electronic payment method scheduled to replace a paper-based payment.
  • Per NACHA Operating Rules, health plans, clearinghouses or payment-related vendors must receive explicit authorization from the provider prior to use of the ACH EFT debit transaction for recoupment purposes.

“Despite the adoption of national standards aimed at decreasing administrative costs, providers are increasingly facing epayment transaction fees and expanded use of virtual credits cards. Combined, these serve as a significant impediment to wide-spread adoption of ACH EFT,” stated Robert Tennant, director of HIT Policy for the Medical Group Management Association and co-chair of the WEDI ePayments Taskforce. We expect that these ePayments Principles will serve as a guidepost for the industry and lead to further automation of the provider revenue cycle.”

For more information on WEDI’s industry efforts surrounding electronic funds transfer, please visit the WEDI EFT Workgroup page.

About WEDI

The Workgroup for Electronic Data Interchange (WEDI) is the leading authority on the use of health IT to improve healthcare information exchange in order to enhance the quality of care, improve efficiency, and reduce costs of our nation’s healthcare system. WEDI was formed in 1991 by the Secretary of Health and Human Services (HHS) and was designated in the 1996 HIPAA legislation as an advisor to HHS. WEDI’s membership includes a broad coalition of organizations, including: hospitals, providers, health plans, vendors, government agencies, consumers, not-for-profit organizations, and standards development organizations. To learn more, visit http://www.wedi.org and connect with us on Twitter, Facebook and LinkedIn.

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