HIPAA Summit ACA Operating Rules Update. NACHA The Electronic Payments Association

Transcription

1 HIPAA Summit ACA Operating Rules Update March 28, 2012 Janet O. Estep NACHA The Electronic Payments Association 2 NACHA The Electronic Payments Association Non-profit rule-making entity Author of the NACHA Operating Rules for almost 40 years Focused on maintaining a safe, secure, and reliable Network, while balancing innovation and risk management In support of financial institutions, consumers, businesses and government entities that utilize the ACH Network Responsible for managing the development, administration and governance of the ACH Network Backbone by which funds are moved between bank accounts throughout the country Support industry education and dialogue (See Appendix) 1

2 3 ACH Network Supporting EFT Payments 20B+ transactions with over $32T+ carried over the Network* * 2011 full year estimates 3 4 The NACHA Operating Rules Define the implementation specifications for movement of dollars and information from one bank account to another Utilized by many different industries for a variety of uses, and is adaptable and flexible as technology and needs change Standard Entry Class Codes ( SECs or SEC Codes ) Permit various kinds of ACH transactions to be distinguished Define roles and responsibilities of entities using the transaction Identifies the specific computer record format used to carry payment and payment related information specific to the users of the SEC 2

3 5 There are Many ACH Network Participants NACHA Operating Rules The Clearing House ACH Network Operators The Atlanta Fed Third party processor Financial Institutions (ODFIs & RDFIs) Third party processors (Healthcare clearinghouse, service providers) Originators (Plans) Receivers (Hospitals, Physician Groups) Third party processors (Healthcare clearinghouse, service providers) Originators (Plans) Receivers (Hospitals, Physician Groups) 5 6 Business to Business SEC Codes Two NACHA-defined standards used by many businesses: CCD+: carries EFT payment and one addenda record This is used to carry a TRN (Trace Number) Segment to reassociate the EFT with the ERA in healthcare CTX: carries EFT payment and information (like an ERA) together via up to 9,999 addenda records (More later on the definition of these standards. See Appendix) Almost all businesses use the ACH Network today for all types of Direct Payments and Direct Deposit (payroll and bills) Why? Electronic payments plus information drives efficiencies and less fraud vs. paper checks and cards 3

4 7 Electronic Payments Benefits & Barriers Top Three Benefits of Sending or Receiving Electronic Payments* Cost Savings 52% Improved Cash Forecasting 40% Fraud control 37% More efficient reconciliation 32% Barriers to Increasing Use of Electronic Payments* Difficulty in convincing customers to pay electronically 83% Trading partners cannot send or receive automated remittance information with electronic payments 77% Difficulty in convincing suppliers to accept electronic payments 74% No standard format for remittance information 72% * 2010 AFP Electronic Payments Study 8 Fraud Across Payment Types ACH Credits have very low incidence of actual or attempted fraud And of those with attempted fraud, only 12% suffered losses An ACH transaction is secured as it moves in every step within the ACH Network Payment Method % subject to actual or attempted fraud % with increased incidents Payment method most responsible for losses Checks 93% 30% 53% ACH Debits 25% 15% 8% Consumer Cards 23% 18% 23% Corporate Cards 15% 6% 14% ACH Credits 4% 3% 1% Wire Transfers 4% 5% 1% * Source: AFP 2011 Payments Fraud and Control Study Annual study since 2005 of cross-industry corporate practitioners 4

5 9 The Confluence of Health Care and Financial Services NACHA s focus is supporting efficiency for payments and related information sent through banks from plans to providers. Author of the NACHA Operating Rules and a Standards Development Organization helping to facilitate use of EFT in the healthcare industry, working with CAQH CORE in development of the EFT/ERA Healthcare Operating Rules. Financial Institutions Healthcare Entities Sustainable Collaboration: Managing Conflict and Cooperation in Interorganizational Systems, Kuldeep Kumar, MIS Quarterly, 9/ EFT and ERA Process Flow 10 Health Plan creates Health Plan the creates CCD + and the CCD ERA + and ERA ERA (835) Remittance Advice ERA (835) Payment/Advice Sent from the Health Plan to the Provider through separate channel Provider receives the ERA with the TRN Reassociation segment and must Match it to the TRN Reassociation segment received from the RDFI. Provider ODFI sends the CCD + Payment to the ACH Operator RDFI receives CCD+ and posts funds to Provider s account Reassociation TRN segment sent to the Provider when requested 5

6 11 ERA Information vs. Reassociation Trace Number ERA contains the information on claims reimbursement amounts for specific patient treatment(s) and allows the Providers to accurately post a payment to patient accounts receivable and file for any secondary insurance. The reassociation trace number segment is in both the remittance advice (paper or ERA) and the ACH CCD+ Addenda Record. It is used by the Provider to match the payment to the remittance advice The CCD+Addenda holds the TRN Reassociation Trace Number: It is designed to be a machine readable number. The following is an example of a TRN Reassociation Trace Number Segment: TRN*1*12345* * \ 11 Interim Final Rule with Comment Period (IFC 1/2012) defines the Healthcare EFT Standard 12 Health Care Electronic Funds Transfer and Remittance Advice Transaction Stage 1 Payment Initiation Stage 2 Transfer of Funds Stage 3 Deposit Notification Health Plan Their Bank Their Bank Healthcare Provider Plan sends CCD+ Format or Other Format by Agreement, including Reassociation TRN (Trace Number) Segment (ASC X12 835) 6

7 13 Confluence of Healthcare EFT and Banking EFT Health Care Electronic Funds Transfer and Remittance Advice Transaction Healthcare Stage 1 Payment Initiation CCD+ Healthcare EFT Standard plus ASC X TRN Segment Health Plan Stage 2 Transfer of Funds Payment instructions to move funds ACH Network Stage 3 Deposit Notification Healthcare Provider Originator ODFI RDFI Receiver NACHA CCD+ Addenda SEC Code NACHA Operating Rules Apply RDFI Posts Payment to Provider s Bank Account RDFI Provides Re-Association Trace Number to Provider Where can NACHA Operating Rules help efficiently support use of the EFT standard? 14 Ensure that banks are standardized in passing along three necessary reassociation components via deposit notification as described in proposed healthcare operating rules (Minimum CCD+ Reassociation Data Elements) Effective Entry Date Amount TRN - Reassociation Trace Number Segment These 3 data elements are already defined as part of the standard CCD+ format and NACHA Operating Rules This information will flow automatically from the plan s bank to the provider s bank 7

8 15 Where can NACHA Operating Rules help? If the minimum information necessary for reassociation is present from bank to bank in the ACH Network, then. How do we ensure the TRN Reassociation Trace Number Segment is delivered to each provider in a meaningful way? 16 Delivery of Addenda Data to the Provider NACHA Operating Rules already obligate the bank to provide Addenda information to the Provider when requested Subsection RDFI Must Provide all information contained within the Payment Related Information field of an Addenda Record Transmitted with a CCD or CTX Entry Upon request of a Receiver (Provider) By the opening of business on the RDFI s second Banking Day following the Settlement Date of the Entry Provider should only have to sign up once to receive the Addenda information (TRN Reassociation Segment) for all CCD Entries received from all Plans through their bank 8

9 17 Where can NACHA Operating Rules help? Help ensure the banks deliver Addenda record to providers in a way that is meaningful to each provider Considering standardized description of the deposit notification: consistent description of transaction and standardized identification of the health plan (Company Name, Entry Description) Ensures the information is consistently and readily identifiable for providers and for the RDFIs who need to deliver the information Provides flexibility for Provider and their Bank to define the best way to deliver the standardized data elements/addenda For example, a hospital may have a preference for how B2B business addenda data is delivered vs. how insurance claim addenda data is delivered (Both may be CCD+Addenda) Changes to normal NACHA processes to help adapt the EFT standard along with healthcare operating rules 18 Requests to modify NACHA Operating Rules are accepted from any party via NACHA web site and through CAQH CORE All requests to modify CCD+ for health care will be shared with the CAQH CORE EFT & ERA Workgroup NACHA expanded its health care industry rules group to add additional participants RFC distributed & posted on NACHA and CAQH CORE websites Adaptive processes facilitate small changes over time, as required 9

10 19 Our Collective Goal To Drive Efficiency Through lack of translation and reduction in steps: Same format used in Stage 1 Payment Initiation, as also used by FIs in Stage 2 Transfer of Funds Designed to facilitate deliver of money and TRN reassociation trace number to providers in a consistent fashion Results in one less step in formatting/translation Increases likelihood (to 100%) that the TRN Segment received from bank will match TRN Segment with ERA Payments flowing with the TRN drive efficiency, reduce errors ACH offers cost benefits and security to providers, as well as to plans Operating Rules and Standards working together drives efficiency in the overall process and across all parties Appendix 10

11 21 NACHA Healthcare Resource Website Healthcare Provider Tool Kit ACH Primer for Healthcare Payments: A Guide to Understanding EFT Payment Processing PowerPoint to educate healthcare Providers Make Electronic Funds Transfer Work for You FAQs Healthcare Reassociation information sheet 11

12 23 Terminology Two ACH B2B Standards There are currently two NACHA-defined standards for EFT transactions between businesses: CTX (Corporate Trade Exchange): permits the EFT payment and the ERA to travel together over the ACH network. CCD+ (Corporate Credit or Debit Entry): carries only the EFT payment and a re-association TRN (Trace Number) Segment over the ACH Network. The ERA travels separately via some other channel. The provider must re-connect the remittances with the appropriate funds using the re-association number. Re-association numbers are unnecessary when the CTX format is used, because the payment instructions (EFT) and payment information (ERA) move together over the ACH Network CCD+ and CTX Standards Are Almost Identical The CCD+ has one addenda record, while the CTX can hold 9,999 addenda records CCD+ with TRN (Trace Number) Segment CTX with X I094101ALL ACH ITEMS BY ACCT EPNC BANK, PGH 5200ABC HEALTH PLANS CTXPAYMENTS JOHN AND MARY DOE ISA*00* *00* *01*TEST 835==>CTX *01* *030128* *U*00200* *0*P*>~GS*HP*TEST 835 * * *1003*245*X*004010~ ST*835*245023~BPR*X*14958*C*ACH**01* *DA* * **01* *DA* * ~TRN*1* * ~REF*EV*BANK~DT M*097* * ~N1*PR*ABC HEALTH PLANS*FI* ~N3*123 EASY STREET~N4*TAMPA*FL* ~PER*CX**TE* ~N1*PE*JOHN AND MARY DOE MEDICAL CENTER*FI* ~N3*PO BOX 12345~N4*TOLEDO*OH*88888~LX*23~TS3*999999*NO* *3* ** **99999~CLP* *1* *1118**HM* *21~NM1*QC*1*SMIT H*WALTER**** MI* ~REF*G2*999999~AMT*1Z* ~SVC*HC>RMBRD* *1118**1~DTM*472* ~CAS*PR*3*50~CAS*CO*42* ~CLP* *1* *6832** HM* *21~NM1*QC*1*SMITH*NATALIA****MI* ~REF*G2*999999~AMT*1Z* ~SVC*HC> RMNEW* *6832**17~DTM*472* ~CAS*CO*42* ~CLP* *1* *7008**HM* *21~NM1*QC*1*SMITH*ROBERT****MI* ~REF*G2*999999~ AMT*1Z* ~SVC*HC>RMBRD* *7008**6~DTM*472* ~CAS*CO*42* ~SE*37*245023~GE*1*245~IEA*1* ~ I094101ALL ACH ITEMS BY ACCT EPNC BANK, 5200ABC HEALTH PLANS CCD+PAYMENTS JOHN AND MARY DOE RTN*1* * * \ An ASC X is shown enveloped in an ACH CTX - Formatting for the NACHA CTX is yellow. The EDI envelope and the transaction set Table I are aqua. Table II, the remittance information, is green. PHI is in Table II. The CCD+: NACHA formatting in yellow with the TRN (Trace Number) Segment in aqua