FPA's Collaborate on Efforts to Increase Medical Payments Electronically

By Matt Helfrich, EFT Strategy Division

In December 2010, a workgroup comprised of Federal Program Agency (FPA) representatives from the Department Of Labor (Labor), Department of Veterans Affairs (VA), Department of Health and Human Services (HHS)/Centers for Medicare and Medicaid Services (CMS), and the Financial Management Service (FMS) was organized to identify ways to increase the percentage of medical fee payments made electronically. Representatives from the Indian Health Service will join the workgroup later in the summer. Each year, Labor, VA, and CMS make millions of payments to medical providers, including sole practitioners and hospitals, to reimburse them for medical treatment and related services they provide to beneficiaries. Despite Treasury's Electronic Funds Transfer (EFT) rule that requires that all federal non-tax payments be made electronically, less than half of the federal government's medical payments are made by EFT.

The FPA workgroup agreed to collectively identify and resolve any impediments to making medical payments electronically by addressing operational, policy, and outreach-related issues. Since December 2010, the workgroup has been convening on a bi-weekly basis via conference call and has made significant progress towards its collective goal of increasing the percentage of medical payments made electronically.

Availability of Remittance Data

The workgroup's immediate focus was on identifying and addressing operational issues, namely the availability of remittance data to medical providers for the reconciliation of EFT payments. Several FPA representatives reported that medical providers are resistant to receiving payments electronically because they need adequate remittance data to reconcile outstanding invoices with incoming federal payments. Both CMS and Labor make medical payment data, otherwise known as the Explanation of Benefits, available electronically to medical providers. Additionally, each FPA participating in the workgroup confirmed that unless this medical payment data is available electronically, they will mail a paper remittance for each payment. Moreover, VA has committed to developing an online application where their medical providers can access remittance data electronically. The agency workgroup is currently collaborating with an important industry rules workgroup to stay abreast of the rules and standards being developed for EFT medical payments and remittance. In doing so, the FPA's will be aware of any changes they may want to make to their remittance data systems/processes to align with these standards and minimize operational impediments to EFT.

Informing Medical Providers

After addressing operational impediments, the workgroup agreed to collaborate on the formidable challenge of informing hundreds of thousands of medical providers about the EFT requirement.

In the face of this challenge, the FPA representatives freely shared best practices and ideas with each other in order to determine the most cost-effective way to inform the medical payment community of the Treasury EFT requirement. For example, the FPA representatives are working together to identify medical providers who receive a large volume of check payments from all three FPA's. In doing so, the workgroup will be able to collectively address these common providers about the EFT requirement and possible pilot opportunities, as opposed to dealing with them on a unilateral basis.

CMS, which has extensive experience working with the medical provider community through its Medicare and Medicaid programs, has offered to share its vast collection of contacts in the medical provider community with the workgroup. The workgroup plans to use the list to inform the medical provider community of the EFT requirement, through various communication mediums, including email pushes, social media outlets and newsletter editions.

These messages and articles will inform medical providers of the requirement to switch from check to electronic deposit of their fee payments, how to make this required change to EFT, and encourage providers to use available electronic remittance systems as a cost-effective alternative to paper statements.

Collaborative Efforts

The success of the medical provider workgroup is due to the collaborative teamwork of its FPA representatives. The workgroup looks forward to continued coordination and cooperation over the next several months as it pursues its collective goal to make their medical fee payments electronically and replace paper remittance statements with more cost-effective, electronic solutions. The FPA's will also continue to collaborate with an important industry workgroup on medical payments named the Council for Affordable Quality Healthcare; Committee on Operating Rules for Information Exchange (CAQH CORE). CAQH CORE has been designated by HHS to prescribe rules and standards on the use of EFT for medical payments and the delivery of medical remittance data. The FPA workgroup has fostered an effective working relationship with the CAQH CORE leadership, thereby allowing FPA participants to provide input into the rules and standards being developed and to prepare themselves for any rule changes that may impact them, such as the proposed standard that all remittance information be delivered to the medical provider within 3 days of the EFT payment. FPA compliance with the rules and standards being developed by the CAQH CORE will undoubtedly minimize many of the operational impediments the FPA's experienced with EFT payments to medical providers in the past.

For more information, contact Matt Helfrich at (215) 516-8022.


   Last Updated:  August 24, 2011