Phase III CAQH CORE EFT & ERA Operating Rules

I. Overview of CAQH CORE EFT & ERA Operating Rules

  1. What do the Phase III CAQH CORE EFT & ERA Operating Rules address?
  2. Who should implement the Phase III CAQH CORE EFT & ERA Operating Rules?
  3. What transactions are addressed by the Phase III CAQH CORE EFT & ERA Operating Rules?
  4. What are the HIPAA-mandated Healthcare EFT Standards?
  5. Do the CAQH CORE EFT & ERA Operating Rules apply when entities make electronic healthcare payments via other Electronic Funds Transfer (EFT) standards (e.g., Fedwire, card payment networks, CTX, etc.) instead of the HIPAA-mandated Healthcare EFT Standards (NACHA CCD+ and the X12 v5010 835 TR3 TRN Segment)?
  6. My organization is a health plan. We currently send a paper Remittance Advice (RA) and do not support the X12 v5010 835. As we do not use the X12 v5010 835, are we exempt from conformance with the CAQH CORE Operating Rules? Or do the CAQH CORE EFT & ERA Operating Rules require us to implement the X12 v5010 835 transaction in order to conform to the applicable rule requirements?
  7. My organization is a health plan. We currently deliver both a proprietary paper Remittance Advice (RA) and the X12 v5010 835. Do the CAQH CORE Operating Rules addressing the X12 v5010 835 require us to stop sending a paper RA and only provide remittance information via the X12 v5010 835?
  8. My organization is a health plan. We currently do not support claim payments via the HIPAA-mandated Healthcare EFT Standards. As we do not use the transaction standards, are we exempt from conformance with the CAQH CORE Operating Rules? Or do the CAQH CORE EFT & ERA Operating Rules require us to implement the HIPAA-mandated Healthcare EFT Standards in order to conform to applicable rule requirements?
  9. My organization is a provider office. We currently do not receive electronic claim payment and remittance information from all health plan trading partners. Do the CAQH CORE EFT & ERA Operating Rules require us to accept claim payment and remittance information via the Healthcare EFT Standards and X12 v5010 835 from all health plans?
  10. My organization is a provider office. We currently receive claim payment via paper with accompanying electronic remittance information from some of our health plan trading partners. Do the CAQH CORE EFT & ERA Operating Rules require us to receive claim payment electronically via the Healthcare EFT Standards (CCD+ and X12 v5010 835 TR3 TRN Segment) in order to continue to receive the X12 v5010 835?
  11. My entity is a provider organization. We currently cannot access EFT and/or ERA from some of the health plans we work with but would like to begin using the transactions. Do health plans need to offer these transactions and does CAQH CORE have any tools to assist us with this?
  12. My entity is a provider organization. Can we be charged a fee by health plans to receive claims reimbursement via the HIPAA-mandated Healthcare EFT Standards?
1. What do the Phase III CAQH CORE EFT & ERA 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
  • In-ability 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 Phase III CAQH CORE EFT & ERA Operating Rules address these challenges by requiring:

2. Who should implement the Phase III CAQH CORE EFT & ERA Operating Rules?

The Phase III CAQH CORE EFT & ERA Operating Rules apply to all HIPAA covered entities that conduct the ASC X12 005010X221A1 Health Care Claim Payment/Advice (835) and the HIPAA-mandated Healthcare EFT Standards (NACHA CCD+ and the X12 v5010 835 TR3 TRN Segment) transactions. ACA Section 1104 requires all HIPAA covered entities to comply with the HIPAA-mandated EFT and ERA operating rules. Entities acting in the role of a Business Associate of a HIPAA covered entity may also need to implement various aspects of the Phase III CAQH CORE EFT & ERA Operating Rules. The CMS website provides charts HERE to help organizations determine whether they are a HIPAA covered entity.

3. What transactions are addressed by the Phase III CAQH CORE EFT & ERA Operating Rules?

The Phase III CAQH CORE EFT & ERA Operating Rules apply to use, conduct, or processing of the ASC X12 005010X221A1 Health Care Claim Payment/Advice (835) transaction and the HIPAA-mandated Healthcare EFT Standards (NACHA CCD+ and the X12 v5010 835 TR3 TRN Segment).

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

ACA Section 1104(c)(2) adds the 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 X12 v5010 835 TR3 TRN Segment together as the 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 EFT transaction standards (e.g., Fedwire, card payment networks, 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.

5. Do the CAQH CORE EFT & ERA Operating Rules apply when entities make electronic healthcare payments via other Electronic Funds Transfer (EFT) standards (e.g., Fedwire, card payment networks, CTX, etc.) instead of the HIPAA-mandated Healthcare EFT Standards (NACHA CCD+ and the X12 v5010 835 TR3 TRN Segment)?

No. The CAQH CORE EFT & ERA Operating Rules apply only when entities are using the HIPAA-mandated EFT & 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 X12 v5010 835 TR3 TRN Segment), these other standards are outside the scope of the CAQH CORE EFT & ERA 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, 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.

6. My organization is a health plan. We currently send a paper Remittance Advice (RA) and do not support the X12 v5010 835. As we do not use the X12 v5010 835, are we exempt from conformance with the CAQH CORE Operating Rules? Or do the CAQH CORE EFT & ERA Operating Rules require us to implement the X12 v5010 835 transaction in order to conform to the applicable rule requirements?

Under the HIPAA provisions, health plans are “required to have the capacity to accept and/or send (either itself, or by hiring a health care clearinghouse to accept and/or send on its behalf) a standard transaction that it otherwise conducts but does not currently support electronically” (see CMS FAQ #8121). This requirement applies to all HIPAA-mandated transaction standards, including the X12 v5010 835 transaction standard. When using the HIPAA-mandated X12 v5010 835, operating rules apply for HIPAA covered entities. In August 2012, HHS issued an IFR adopting the CAQH CORE EFT & ERA Operating Rules to fulfill the ACA Section 1104 mandate, with the exception of rule requirements pertaining to use of Acknowledgements. On April 19, 2013, HHS issued an industry notice that the IFR is a Final Rule now in effect.

ACA Section 1104 requires all HIPAA covered entities, including health plans, to comply with the mandated standards and applicable operating rules. It is a health plan’s individual business decision whether or not to deliver a proprietary paper RA in addition to supporting the X12 v5010 835 and applicable CAQH CORE Operating Rules. If a health plan offers a paper RA it must still implement the X12 v5010 835 transaction and applicable CAQH CORE Operating Rules.

The ACA-mandated CAQH CORE EFT & ERA Operating Rules include four rules that specify data content and infrastructure requirements applicable to the X12 v5010 835 (the fifth CAQH CORE Rule applies to the HIPAA-mandated healthcare EFT standard transaction):

7. My organization is a health plan. We currently deliver both a proprietary paper Remittance Advice (RA) and the X12 v5010 835. Do the CAQH CORE Operating Rules addressing the X12 v5010 835 require us to stop sending a paper RA and only provide remittance information via the X12 v5010 835?

The CAQH CORE EFT & ERA Operating Rules do not require any health plan to send remittance information via the X12 v5010 835 only.

Under the HIPAA provisions, health plans are “required to have the capacity to accept and/or send (either itself, or by hiring a health care clearinghouse to accept and/or send on its behalf) a standard transaction that it otherwise conducts but does not currently support electronically” (see CMS FAQ #8121). This requirement applies to all HIPAA-mandated transaction standards, including the X12 v5010 835 transaction standard. It is a health plan’s individual business decision whether or not to deliver a proprietary paper RA in addition to supporting the X12 v5010 835 and applicable CAQH CORE Operating Rules.

The CAQH CORE 350: Health Care Claim Payment/Advice (835) Infrastructure Rule does include a requirement that applies to health plan delivery of a proprietary paper RA. Specifically, Section 4.3, Dual Delivery of X12 v5010 835 and Proprietary Paper Claim Remittance Advices, of the CAQH CORE 350 Rule requires health plans that currently deliver a proprietary paper RA to support a parallel processing period during which providers can continue to receive a paper RA while they test the use of the X12 v5010 835 standard and associated operating rules. The required timeframe for the dual delivery period is 31 days (or a minimum of 3 payments). NOTE: If a health plan does not currently deliver proprietary paper RAs, the CAQH CORE 350 Rule does not require the plan to start doing so.

At the end of the parallel processing period, “if the provider determines it is unable to satisfactorily implement and process the health plan’s electronic X12 v5010 835 following the end of the initial dual delivery timeframe and/or after an agreed-to extension, both the provider and health plan may mutually agree to continue delivery of the proprietary paper claim remittance advices.” Additionally, “at the provider’s discretion, the provider may elect to not receive the proprietary paper claim remittance advices, to choose a shorter time period, or to discontinue receiving the proprietary paper claim remittance advices before the end of the specified timeframe by notifying the health plan of this decision.”

8. My organization is a health plan. We currently do not support claim payments via the HIPAA-mandated Healthcare EFT Standards. As we do not use the transaction standards, are we exempt from conformance with the CAQH CORE Operating Rules? Or do the CAQH CORE EFT & ERA Operating Rules require us to implement the HIPAA-mandated Healthcare EFT Standards in order to conform to applicable rule requirements?

ACA Section 1104 requires all HIPAA covered entities, including health plans, to comply with the mandated standards and applicable operating rules. ACA Section 1104 adds Electronic Funds Transfer (EFT) to the list of electronic health care transactions for which the HHS Secretary must adopt a HIPAA standard. In January 2012, HHS issued an IFC adopting the NACHA CCD+ and X12 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. As of January 1, 2014, health plans must support the CCD+ to initiate EFT payment through the Automated Clearing House (ACH) Network (see CMS FAQ #6357). NOTE: The HHS Final Rule does not prohibit health plans and providers from using the CTX format to conduct EFT via the ACH Network or using non-ACH networks (e.g., Fedwire, card payment networks, etc.) to send/receive EFT claim payments (see CMS FAQ#6343).

Under the HIPAA provisions, health plans are “required to have the capacity to accept and/or send (either itself, or by hiring a health care clearinghouse to accept and/or send on its behalf) a standard transaction that it otherwise conducts but does not currently support electronically” (see CMS FAQ #8121). This requirement applies to all HIPAA-mandated transaction standards, including the EFT transaction standard.

When using the Healthcare EFT Standards, the ACA-mandated operating rules apply for HIPAA covered entities. In August 2012, HHS issued an IFR adopting the CAQH CORE EFT & ERA Operating Rules to fulfill the ACA Section 1104 mandate, with the exception of rule requirements pertaining to use of Acknowledgements. On April 19, 2013, HHS issued an industry notice that the IFR is a Final Rule now in effect. The ACA-mandated CAQH CORE EFT & ERA Operating Rules include two rules that apply to the Healthcare EFT Standards (the remaining three rules apply to the X12 v5010 835 transaction):

9. My organization is a provider office. We currently do not receive electronic claim payment and remittance information from all health plan trading partners. Do the CAQH CORE EFT & ERA Operating Rules require us to accept claim payment and remittance information via the Healthcare EFT Standards and X12 v5010 835 from all health plans?

The CAQH CORE EFT & ERA Operating Rules do not require any provider to accept claim payment and remittance information via the HIPAA-mandated X12 v5010 835 and Healthcare EFT Standards (CCD+ and X12 v5010 835 TR3 TRN Segment).

Under the HIPAA provisions, health plans are “required to have the capacity to accept and/or send (either itself, or by hiring a health care clearinghouse to accept and/or send on its behalf) a standard transaction that it otherwise conducts but does not currently support electronically” (see CMS FAQ #8121). This requirement applies to all HIPAA-mandated transaction standards, including the EFT and ERA transaction standards.

Providers are not required to send or receive any of the HIPAA-mandated transactions in order to comply with the HIPAA provisions (see CMS FAQ #1809). However, if a provider chooses to receive claim payment and remittance information electronically via the HIPAA-mandated X12 v5010 835 and Healthcare EFT Standards, the provider must comply with the applicable ACA-mandated CAQH CORE EFT & ERA Operating Rules.

CAQH CORE offers a Sample Provider EFT Request Letter, with instructions, that a provider can email to health plans or use as talking points with health plan contacts to request payment via EFT and EFT & ERA Operating Rule implementation status.

NOTE: While Federal law does not require providers to use the HIPAA-mandated transaction standards, certain states or health plans may require providers to conduct the electronic transactions.

CMS is the HHS designated authority on any decisions regarding interpretation, implementation, and enforcement of the regulations adopting the HIPAA and ACA Administrative Simplification standards and provisions; for additional questions regarding the regulations, please contact CMS.

10. My organization is a provider office. We currently receive claim payment via paper with accompanying electronic remittance information from some of our health plan trading partners. Do the CAQH CORE EFT & ERA Operating Rules require us to receive claim payment electronically via the Healthcare EFT Standards (CCD+ and X12 v5010 835 TR3 TRN Segment) in order to continue to receive the X12 v5010 835?

The CAQH CORE EFT & ERA Operating Rules do not require any provider to accept claim payment or remittance information via the HIPAA-mandated X12 v5010 835 and Healthcare EFT Standards (CCD+ and X12 v5010 835 TR3 TRN Segment).

The HIPAA Administrative Simplification provisions do not require providers to send or receive any of the HIPAA-mandated transaction standards (see CMS FAQ #1809) nor do they require providers to accept claim payment via EFT (see CMS FAQ #6343). A provider can choose to receive remittance information electronically via the X12 v5010 835 ERA while receiving claim payment via paper.

However, if a provider chooses to receive remittance information electronically via the X12 v5010 835, while receiving claim payment via paper, the provider must implement and comply with the following ACA-mandated CAQH CORE Operating Rules addressing use of the X12 v5010 835:

CAQH CORE offers a Sample Provider EFT Request Letter, with instructions, that a provider can email to health plans or use as talking points with health plan contacts to request payment via EFT and EFT & ERA Operating Rule implementation status.

NOTE: While Federal law does not require providers to use the HIPAA-mandated transaction standards, certain states or health plans may require providers to conduct the electronic transactions.

CMS is the HHS designated authority on any decisions regarding interpretation, implementation, and enforcement of the regulations adopting the HIPAA and ACA Administrative Simplification standards and provisions; for additional questions regarding the regulations, please contact CMS.

11. My entity is a provider organization. We currently cannot access EFT and/or ERA from some of the health plans we work with but would like to begin using the transactions. Do health plans need to offer these transactions and does CAQH CORE have any tools to assist us with this?

Yes. As of January 1, 2014 all HIPAA covered health plans must offer to providers an electronic payment option via the newly mandated Healthcare EFT Standard (e.g. NACHA CCD+). Health plans have been required to offer payment via the X12 v5010 835 HIPAA standard for ERA for many years. Additionally, health plans must be compliant with the ACA mandated EFT & ERA Operating Rules which support more efficient provider use of both EFT and ERA. CAQH CORE offers the following tools to assist providers seeking to utilize EFT and/or ERA:

  • Contact your Health Plans - Sample Provider EFT Request Letter: A sample letter, with instructions, that a provider can email to health plans or use as talking points with health plan contacts to request payment via EFT and EFT & ERA Operating Rule implementation status.
  • Contact Your Banks - Sample Provider EFT Reassociation Data Request Letter: A sample letter, with instructions, that a provider receiving EFT payments may customize and email to its banks or use as talking points for a phone or in-person meeting with its bank contacts to request delivery of the ACH Payment Related Information via a secure, electronic means. The ACH Payment Related Information contains the necessary data to reassociate EFTs and ERAs and is not automatically delivered to providers unless requested by the provider.
12. My entity is a provider organization. Can we be charged a fee by health plans to receive claims reimbursement via the HIPAA-mandated Healthcare EFT Standards?

ACA Section 1104 added Electronic Funds Transfer (EFT) to the list of electronic healthcare transactions for which the HHS Secretary must adopt a HIPAA standard. In July 2012, HHS adopted the NACHA CCD+ and ASC X12N/005010X221 Health Care Claim Payment/Advice (835) and associated errata (hereafter referenced as ASC X12N v5010 835) TR3 TRN Segment together as the HIPAA-mandated Healthcare EFT Standards. As of January 1, 2014, health plans are required to support the CCD+ to initiate EFT payment through the Automated Clearing House (ACH) Network. NOTE: The HHS Final Rule does not prohibit health plans and providers from using the CTX format to conduct EFT via the ACH Network or using non-ACH networks (e.g., Fedwire, card payment networks, etc.) to send/receive EFT claim payments. When using the Healthcare EFT Standards, all HIPAA-covered entities, including health plans, must comply with the ACA-mandated CAQH CORE EFT & ERA Operating Rules.

Under the HIPAA Administrative Simplification provisions, all health plans are required to have the capability to accept and/or send the HIPAA-mandated transactions standards including the HIPAA-mandated Healthcare EFT Standards. A health plan can provide this capacity itself or by hiring a clearinghouse to accept and/or send the mandated transaction standards on its behalf (see CMS FAQ#8121). The regulation adopting the adopting the HIPAA-mandated transaction standards specifies the following additional requirements for health plans: (see 45 CFR §162.925)

(1) If an entity requests a health plan to conduct a transaction as a standard transaction, the health plan must do so.

(2) A health plan may not delay or reject a transaction, or attempt to adversely affect the other entity or the transaction, because the transaction is a standard transaction.

(3) A health plan may not reject a standard transaction on the basis that it contains data elements not needed or used by the health plan (for example, coordination of benefits information).

(4) A health plan may not offer an incentive for a health care provider to conduct a transaction covered by this part as a transaction described under the exception [for direct data entry transactions] provided for in §162.923(b).

(5) A health plan that operates as a health care clearinghouse, or requires an entity to use a health care clearinghouse to receive, process, or transmit a standard transaction may not charge fees or costs in excess of the fees or costs for normal telecommunications that the entity incurs when it directly transmits, or receives, a standard transaction to, or from, a health plan.

Please Note: CMS is the HHS delegated authority on any decisions regarding interpretation, implementation, and enforcement of the regulations adopting the HIPAA and ACA Administrative Simplification standards and provisions. Within CMS, the National Standards Group (NSG) enforces the regulations addressing the HIPAA and ACA-mandated transactions, national identifiers, operating rules, health plan certification, and additional standards. More detailed information on the provisions, as well as compliance and enforcement requirements, is available on the CMS website and via the CMS FAQs.