What is Electronic Remittance Advice (ERA)?
Picture this.
Although this scenario affects every healthcare organization, let’s say you’re a therapist who just recently opened. You’ve read countless blogs about mental health billing, established a process that’s right for you and submitted your first claim.
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Before moving forward in this scenario, I need to mention that there aren’t really any significant differences in the mental health billing process as opposed to all of healthcare.
Anyway, you went through your new process and submitted your first claim! Exciting stuff. Now all you have to do is wait to see if the payer likes you personally and accepts what you submitted.
I’m being facetious, of course. Insurance payers all have a long list of requirements for their claim
submission process. As long as you stick to those requirements, you should be good to go, right?
A couple of days go by, however, and you don’t hear back from the payer. You also haven’t noticed any activity in your organization’s bank account either. You’re thinking to yourself, “What on Earth happened to my claim?”
Since the insurance payer hasn’t provided you with any update, you call them. After transferring through departments and waiting on hold for an hour or two, the representative on the line tells you that they denied the claim you submitted.
Naturally, your immediate response to the representative is, “Why wasn’t it accepted?”
They respond to your question with a canned script and mention that you should’ve received an “ERA” from them containing the reason for the denial. The conversation ends and you hand up the phone.
The rest of the day you’re wondering to yourself, “What the heck is an ‘ERA’?” Luckily, you decided to do some googling and found yourself here…watching this video.
Electronic Remittance Advice is a data file that you receive from an insurance payer that provides you with payment information about a claim you submitted to it.
You receive ERA’s through a direct electronic connection with an insurance payer, your practice management (PM) system and/or your clearinghouse.
ERA files come through as ANSI 835 and follow the ASC X12 835 format.
The Health Insurance Portability and Accountability Act (HIPAA) required that the Department of Health and Human Services (HHS) establish a more effective process for electronic transactions.
Thus, the ASC X12835 is the HIPAA-compliant, federally mandated format for ERAs.
There are many benefits to electronic remittance advice such as improving efficiency, auto-posting into software, giving you a better understanding of denials, giving you more storage space, and streamlining your file searching and filing processes. I will have to explain those benefits in more detail in another video, otherwise we would be here for another 10 minutes.
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