ACA Section 1104 Mandate for Federal Operating Rules

III. Requirements for Federal Operating Rules Addressing the EFT & ERA Transactions

The FAQs in this section have been developed to provide clarification on the requirements of the ACA-mandated CAQH CORE EFT & ERA Operating Rules for the HIPAA-mandated EFT and ERA transactions. See CAQH CORE FAQs Part D: CAQH CORE EFT & ERA Operating Rules for guidance on the technical rule requirements.

  1. What do the CAQH CORE Payment & Remittance Operating Rules address?
  2. What CAQH CORE Payment & Remittance Operating Rules have been adopted to fulfill the ACA Section 1104 mandate?
  3. Does the HHS Final Rule for Payment & Remittance Operating Rules adopt the CAQH CORE Rule requirements pertaining to use of Acknowledgements?
  4. What transactions are addressed by the ACA-mandated CAQH CORE Payment & Remittance Operating Rules?
  5. What are the HIPAA-mandated Healthcare EFT Standards?
  6. What entities are required to comply with the ACA-mandated Payment & Remittance Operating Rules?
  7. Do the CAQH CORE Payment & Remittance Operating Rules apply when entities make electronic healthcare payments via other Electronic Funds Transfer (EFT) standards (e.g., Fedwire, card payment networks, ACH CTX, etc.) instead of the HIPAA-mandated Healthcare EFT Standards (NACHA CCD+ and the ASC X12N v5010 835 TR3 TRN Segment)?
1. What do the CAQH CORE Payment & Remittance Operating Rules address?

Payment and remittance advice processing are faster when a provider receives payment via Electronic Funds Transfer (EFT) and Electronic Remittance Advice (ERA) instead of via paper check and corresponding paper remittance advice. The CAQH Index estimates the proportion of these transactions conducted electronically. Several key barriers exist to achieving rapid, industry-wide adoption of EFT and ERA including:

  • Non-uniform and inconsistent use of the 1000+ Claims Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs)
  • Inconsistent data elements required by health plans for provider EFT and ERA enrollment
  • Inability of providers to specify to the health plan how payments should be made, i.e., by National Provider Identifier (NPI) or Tax ID
  • Challenges to provider reassociation of the EFT and ERA due to non-matching trace numbers and extensive time delays between receipt of the EFT and ERA

The CAQH CORE Payment & Remittance Operating Rules address these challenges by requiring:

rule type rules key rule requirements
data content Uniform Use of CARCs and RARCs Rule
  • Idenfities a minimum set of four CAQH CORE-defined Business Scenarios with a maximum set of CAQH CORE-required code combinations that can be applied to convey details of the claim denial or payment to the provider
infrastructure Health Care Claim Payment/ Advice Infrastructure Rule
  • Specifies use of the CAQH CORE Master Companion Guide Template for the flow and format of the guides
  • Requires entities to support CAQH CORE Claim Status Connectivity
  • Includes batch Acknowledgement requirements*
  • Defines a dual-delivery (paper/ electronic) to facilitate provider transition to electronic remits
infrastructure EFT and ERA Reassociation Rule
  • Addresses provider receipt of the CAQH CORE-required Minimum ACH CCD+ Data Elements required for re-association
  • Addresses elapsed time between the sending of the v5010 835 and the CCD+ transactions
  • Adds requirements to resolve late/missing EFT and ERA transactions
  • Recognizes the role of NACHA Operating Rules for financial institutions
infrastructure EFT Enrollment Data Rule and ERA Enrollment Data Rule
  • Identifies a maximum set of standard data elements for EFT enrollment
  • Outlines a flow and format for paper and electronic collection of the data elements
  • Requires health plans to offer electronic EFT enrollment
  • Requires providers to specify how payments should be made, i.e., by NPI or by Tax ID, as part of the EFT and/or ERA enrollment process

*CMS-0028-IFC excludes requirements pertaining to acknowledgements

2. What CAQH CORE Payment & Remittance Operating Rules have been adopted to fulfill the ACA Section 1104 mandate?

The August 2012 HHS Final Rule adopts all the CAQH CORE Payment & Remittance Operating Rules to fulfill the ACA mandate, with the exception of rule requirements pertaining to use of Acknowledgements. Specifically, the Final Rule adopts the following CAQH CORE Payment & Remittance Operating Rules:

NOTE: Rule requirements pertaining to use of Acknowledgements are not included for adoption in the HHS Final Rule given that standards for Acknowledgements have not yet been adopted under HIPAA.

3. Does the HHS Final Rule for Payment & Remittance Operating Rules adopt the CAQH CORE Rule requirements pertaining to use of Acknowledgements?

No. The August 2012 HHS Final Rule adopting the CAQH CORE Payment & Remittance Operating Rules does not adopt the Acknowledgement requirements The Final Rule does note that, “without Acknowledgements, it is difficult for the sender to know whether the intended recipient received the transmission, which often results in the sender repeatedly querying the intended receiver as to the status of the transmission...until such time as the {Health and Human Services} Secretary adopts a standard for Acknowledgments, we support the industry’s ongoing voluntary use of Acknowledgements and encourage even more widespread use.” The CAQH CORE Operating Rules support the use of Acknowledgements.

4. What transactions are addressed by the ACA-mandated CAQH CORE Payment & Remittance Operating Rules?

The CAQH CORE Payment & Remittance Operating Rules apply to the use, conduct, or processing of the ASC X12N/005010X221 Health Care Claim Payment/Advice (835) and associated errata (hereafter referenced as ASC X12N v5010 835) transaction and the HIPAA-mandated Healthcare EFT Standards (the NACHA ACH CCD+ and the ASC X12N v5010 835 TR3 TRN Segment).

5. What are the HIPAA-mandated Healthcare EFT Standards?

ACA Subsection 1104(c)(2) adds the Electronic Funds Transfer (EFT) transaction to the list of electronic health care transactions for which the HHS Secretary must adopt a HIPAA standard. Specifically, ACA Section 1104 requires the HHS Secretary to promulgate a final rule to establish a HIPAA transaction standard for healthcare EFT no later than January 1, 2012, with the rule effective January 1, 2014.

In January 2012, HHS issued an Interim Final Rule with Comment (IFC) adopting the NACHA CCD+ and the ASC X12N v5010 835 TR3 TRN Segment together as the HIPAA-mandated Healthcare EFT Standards. On July 10, 2012, CMS announced that the IFC is a Final Rule now in effect. The CMS announcement notes that “we have decided not to change any of the policies established in CMS-0024-IFC.”

NOTE: The HHS Final Rule adopting the Healthcare EFT Standards does not prohibit use of other electronic payment methods (e.g., Fedwire, card payment networks, ACH CTX, etc.) to make electronic healthcare claim payments. However, if a provider requests that a health plan conduct EFT using the ACH Network, the health plan is required to do so.

6. What entities are required to comply with the ACA-mandated Payment & Remittance Operating Rules?

The ACA Administrative Simplification provisions require all HIPAA-covered entities to comply with the ACA mandated standards and applicable operating rules by their compliance dates. The compliance date for the ACA mandated CAQH CORE Payment & Remittance Operating Rules was January 1, 2014.

Per ACA Section 1104, by January 1, 2014 HIPAA-covered entities must meet all applicable rule requirements outlined in the ACA mandated CAQH CORE Payment & Remittance Operating Rules. The CMS website provides charts to help organizations determine whether an organization or individual is a HIPAA-covered entity. The role of a Business Associate should also be considered.

See the CMS website for more information on the operating rules compliance and enforcement requirements.

7. Do the CAQH CORE Payment & Remittance Operating Rules apply when entities make electronic healthcare payments via other Electronic Funds Transfer (EFT) standards (e.g., Fedwire, card payment networks, ACH CTX, etc.) instead of the HIPAA-mandated Healthcare EFT Standards (NACHA CCD+ and the ASC X12N v5010 835 TR3 TRN Segment)?

No. The CAQH CORE Payment & Remittance Operating Rules apply only when entities are using the HIPAA-mandated EFT and ERA standards. While the HHS Final Rule permits entities to use EFT transaction standards beyond the HIPAA-mandated Healthcare EFT Standards (the NACHA CCD+ and the ASC X12N v5010 835 TR3 TRN Segment), these other standards are outside the scope of the CAQH CORE Payment & Remittance Operating Rules.

NOTE: The HHS Final Rule adopting the Healthcare EFT Standards does not prohibit use of other EFT transaction standards outside of the ACH Network (e.g., Fedwire, card payment networks, ACH CTX, etc.) to make electronic healthcare payments. However, if a provider requests that a health plan conduct EFT using the ACH Network, the health plan is required to do so.