Healthcare & ACH Be Prepared for Kevin Olsen, AAP, MCSE Director of Education EastPay. All Rights Reserved EASTPAY

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1 Healthcare & ACH Be Prepared for 2014 Kevin Olsen, AAP, MCSE Director of Education Teamwork Respect Passion Integrity Trust EASTPAY Not-for-profit Regional Payments Association Educational Programs Member benefits Voice & Representation in National Rule Making and Regulatory Process Toll free operational assistance and Discounts on seminars, publications, conferences Online purchasing and registration 8 ACH Accredited Professionals (AAP) on staff 2 1

2 Disclaimer This presentation and applicable materials are intended for general education purposes and nothing in this presentation should be considered to be legal, accounting or tax advice. You should contact your own attorney, accountant or tax professional with any specific questions you might have related to this presentation that are of a legal, accounting or tax nature. Image source: Thinkstock 3 WHAT S COMING IN HEALTHCARE? 4 2

3 5 Health Plan Healthcare Payment Chain 2. Provider submits Claim (837) to Health Plan 1. Patient Encounter with Provider 3. Health Plan Adjudicates Claim 4. Health Plan send Electronic Remittance Advice (ERA) (835) to Provider. The ERA contains a TRN Reassociation Trace Number 5. Health Plan sends CCD+ to ODFI for Claim Reimbursement including a matching TRN Reassociation Trace Number The CCD+ and ERA are generally not sent on the same day. New health care operating rules will establish max timeframe for distribution. ACH Operator 8. Provider reconciles the payment and ERA by matching the TRN segment from both transactions. ODFI 6. ODFI Sends ACH CCD+ Addenda through ACH Network to RDFI 7. RDFI receives CCD+ for Provider, deposits credit RDFI to Provider account, and delivers the TRN Reassociation Trace Number to Provider 6 3

4 Impact All financial institutions have potential to be impacted Plans: Government payments (Medicare and Medicaid), Insurance companies Providers: Doctors, Physicians Groups, Hospitals, Clinic 7 Medicare Payments Today CCD+ payments sent to RDFI RDFI must provide any Receiver with remittance information in the Payment Related Addenda record if it is requested* Most Receivers not aware they have to request the FI to deliver the data What s Changing By January 2014, all Medicare claims payment reimbursements must be made via ACH (est. 13M payments) Healthcare payment operating rules require use of CCD+ and will educate Providers to request reassociation data from FIs Provider may request the CORErequired Minimum ACH CCD+ Reassociation Data Elements 8 4

5 Medicare Payments Implications to Financial Service Providers Receivers will request information from their FI. Request could be made via any channel (e.g., branches, , corporate account managers) Recommended Action: Ensure FI has product available to deliver remittance data to Provider Educate all FI personnel (that deal with customers) on services for delivery of CCD+ addenda records Proactively contact healthcare customers to educate on advantages of ACH payments and services available to receive reassociation data 9 Private-Sector Healthcare Payments Today Majority of healthcare claims payments being sent via paper checks (estimated 1.75B/year) Only 10-30% of healthcare claims payments are done via ACH What s Changing Health Plans must be certified that they are able to send CCD+ payments by January 1, 2014 Health Plans can include acceptance of ACH claims payments reimbursement as contract requirements 10 5

6 Private-Sector Healthcare Payments Implications to Financial Service Providers Receivers will request information from their FI. Request could be made via any channel (e.g., branches, , corporate account managers) Recommended Action: Ensure FI has product available to deliver remittance data to Provider Educate all FI personnel (that deal with customers) on services for delivery of CCD+ addenda records Proactively contact healthcare customers to educate on advantages of ACH payments and services available to receive reassociation data 11 Healthcare Providers Healthcare entities include, but are not limited to, the following: Health Care Facilities Practitioners Clinics Physicians Hospitals Physical Therapists Local group homes Chiropractors Hospice facilities Dentists Nursing homes Optometrists/Ophthalmol Rehabilitation facilities ogists Medical schools Psychologists/Psychiatrist Medical laboratories and Massage Therapists testing facilities Midwives Pharmacies Nurses & Nurse Practitioners 12 6

7 HEALTHCARE PAYMENTS 13 What Do FI s Need To Do? Determine if your organization has a product or service to deliver the Payment Related Information in the CCD+ Addenda Record to your Provider customers If no service is currently available, develop one Work with third-party service providers or core vendors to service determine capabilities (can this information be added to the online banking platform?) Both ACH Operators have EDI services available that facilitate delivery of the Addenda Record information Train FI staff how to respond to a Provider that requests to receive the Payment Related Information 14 7

8 Requesting the Reassociation Trace Number THEY DON T KNOW WHAT I M ASKING FOR? 15 It s all in the language Provider RTN = Reassociation Trace Number Trace Number = RTN Addenda =?? Financial Institution RTN = Routing & Transit Number Trace Number = unique ACH transaction identifier Addenda = where the Reassociation Trace Number is located 16 8

9 Talk to your bank or credit union I m receiving an ACH transaction that has information included with it. Who can I speak with to arrange receipt of this information? I m sure someone in your ACH department or your operations department will understand the term addenda or remittance advice. Receiving this information is not an option. ACH Operations areas that have questions on delivery of the TRN Reassociation Trace Number should contact your RPA EastPay Healthcare Payments CCD+ A CCD with an addenda record Mandatory addenda record TRN (Reassociation Trace Number) Effective September 20,

10 Reassociation Trace Number This is a number created by the Health Plan and carried in both the electronic remittance advice and the ACH claims reimbursement The number is used to match the remittance information to the payment by the healthcare Provider 19 TRN Reassociation Trace Number* *ASC X12N vs TR3 Report 20 10

11 Healthcare ACH Payments Unique Identification of Health Care EFTs HCCLAIMPMT HCCLAIMPMT in Company Entry Description field of the CCD Addition of new EDI data segment terminator The tilde ( ~ ) is now accepted as a second data terminator to any data segment carried in the addenda record of the CCD Entry 5200MEDICAID CCDHCCLAIMPMT Healthcare ACH Payments Formatting Requirements for Health Care EFTs Company Name field of CCD Entry will contain the name of the health plan as known by the healthcare provider Addenda Record will have TRN Data Segment (Reassociation Trace Number) in Payment Related Information field 22 11

12 Already a Rule RDFIs must provide or make available no later than opening of business on RDFI s second Banking Day following Settlement date of Entry This is already required for IAT, CIE, CCD and CTX when requested SUBSECTION Delivery of Payment Related Information RDFIs required to provide or make available, either automatically (if such a service is established by RDFI) or upon request of Receiver (health care provider) all information in Payment Related Information field Via a secure electronic means 128 bit RC4 encryption 24 12

13 Delivery of Payment Related Information (Reassociation Number) RDFIs must provide or make available no later than opening of business on RDFI s second Banking Day following Settlement date of Entry Effective September 20, OPPORTUNITIES FOR FINANCIAL INSTITUTIONS 26 13

14 WIIFM (What s in it for me?) Healthcare legislation provides legal requirements as well as opportunities to: Provide value-added services to existing customer base Expand your healthcare customer base by offering products and services needed by the healthcare industry Treasury/cash management services Capital equipment loans Real estate loans Increase revenue by providing additional products and services 27 Opportunity to Educate FI Healthcare Customers & Enhance Relationships ACH and Treasury Management Services Physicians have expressed concerned about unauthorized debits to account Debit Filter or Debit Block ACH Positive Pay ACH Origination collection of outstanding Patient obligations Delivery of Remittance Information Reduce risk Improve back office administrative processes Educate your healthcare customers on the products and services available from your FI that can help them reduce processing time, funds availability and potentially overall costs of their back office processing 28 14

15 RESOURCES

16 Health epayments News Electronic newsletter covering healthcare issues that impact Financial Institutions To be issued quarterly Register online to receive the newsletter at 31 Healthcare Tools for FIs Healthcare Payments Resource Page Glossary Research paper Links to legislation and organizations Healthcare Presentation from PAYMENTS 2011 & PAYMENTS 2012 Healthcare Payments Tool Kit FAQs New publications Healthcare Resource Guide Healthcare CCD+ Implementation Guide 32 16

17 Healthcare Payments Resource Guide The purpose of this guide is to give the reader a basic understanding of the complexities of the healthcare industry, identify key terms, review recent healthcare legislation, and discuss potential impacts on the financial services industry 33 Healthcare EFT Standard Implementation Guide The purpose of the Healthcare EFT Standard Implementation Guide is to provide the healthcare industry with information on payment processing between the Health Plan to the Provider and for implementing the healthcare EFT Standard for Stage 1 Payment Initiation, as defined by the Standards for Healthcare Electronic Funds Transfers (EFTs) and Remittance Advice

18 Healthcare Industry Resource Tab Information on Healthcare EFT Standard Implementation Link to ACH Rules Online Healthcare CCD+ Implementation Guide ACH Primer for Healthcare Payments: A Guide to Understanding EFT Payment Processing FAQs Healthcare Reassociation information sheet 35 Continuing Education Credits AAP Continuing Education Credits Session title: Healthcare & ACH Be prepared for 2014 The session is worth 1.2 AAP CE (continuing education) credits Topic area: Operational Process/Flow Date conducted: June 21, 2013 Conducted by: EastPay Some of our sessions may also be eligible for other industry certification renewal credits Check with your certifying organization for eligibility requirements

19 Questions? 37 Contact The Presenter Kevin Olsen, AAP, MCSE Director of Education Your 19

20 General Information Audit and Risk Education Follow Us on

21 Learn More - Online Exception Item Processing series (three part series) Account Takeover series (two part series) Tips & Tactics: Onboarding Originators ACH Marketing Expand Your Customer Base ACH Risk Fundamentals Managing High-Risk Originators RDC Rules and Regulations Real RDC Risk Challenges Mobile and Consumer RDC ACH Audit Preparation: Are You Ready? Breaking News: Payments Industry Update 2013 Learn More In Person Getting to Know Your 2013 NACHA Rules Book Payments University (Two-days) Fraud Symposium Manage Your ACH Risk or Explain Your Losses AAPs Start Here - Learn and Prepare (Two-days) AAP Test Before You Test (Two-days) Wire Transfer Training Healthcare ACH Super Day 21