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What Does ERA Stand for in Medical Billing?

2 Minute Read

After an insurer processes a medical claim, providers receive an explanation of benefits (EOB) that breaks down what the insurer has paid and any reasons for coverage denial. In doing so, an EOB informs providers of what a patient owes so they can then bill them for that amount.

Traditionally, EOBs have been sent in a paper format that providers then have to manually process and post. Electronic remittance advice (ERA, or ANSI 835), is considered the HIPAA-compliant electronic equivalent of a paper EOB in medical billing.

The Benefits of Using ERA in Medical Billing

ERAs include all the same information as a standard paper remit (SPR) — and as the Centers for Medicare & Medicaid Services (CMS) reports, “generally contain more detailed information than the SPR.” But an ERA requires much less work on the part of administrative staff to process. 

An electronic remittance advice (ERA) saves the high administrative costs connected to the time-consuming, inefficient processing of standard paper remit (SPR)]

Upon receipt of an SPR, staff would have to file paper documents, manually post payments, and adjudicate claims with payors. When you consider the high number of claims a behavioral health clinic might process each month, these manual measures can add up from a time perspective. Not to mention, they’re also more prone to result in medical billing errors when, for instance, incorrect dollar amounts are manually keyed. 

An ERA automates this process. When a healthcare provider uses electronic claim submission and reconciliation, staff no longer have to deal with papers or the risk of misplacing files. Payments and adjustment codes are automatically posted from an ERA, giving staff back more time to handle higher-value functions of the revenue cycle. At the same time, less human intervention in the transaction reduces the odds for error.

Through electronic communication and increased payment accuracy, electronic remittance advice gives healthcare provider staff and medical practices more time to spend with patients

Alongside operational efficiencies, practices that opt to electronically receive remittance advice also improve their cash flow. In the words of the American Psychological Association, “by standardizing data, electronic claims submission can speed up claims processing, reducing the errors and payment delays or denials that are common with manual or paper claims submissions.”

It's worth noting that the ERA is often paired with electronic funds transfer (EFT), a direct deposit, to deliver maximum efficiency. While a more secure method for payers to send payments, it also allows providers to receive remittance in far less time than having to wait for a check to arrive in the mail.

While an ERA streamlines post payments and secondary payers benefit coverage in the medical industry, the use of EFT that allows for electronic payments supports more efficient interactions between a health plan and a provider

At the same time, access to stored ERA data makes it easier for providers to maintain oversight of and reconcile any outstanding balances. Without having to sort through files, healthcare providers have better visibility over their accounts receivable records and can take the necessary steps to streamline collection efforts.

BillingTracker Allows for the Processing of ERA Files

BillingTracker is ClinicTracker’s complete billing system for behavioral health providers. Part of that package includes the 835 ERA module, which allows providers to process ERA files from payers in BillingTracker and automatically post them to patient accounts. Remaining balances can automatically be transferred to patient responsibility, or follow resubmission rules to a secondary payer. This means less work for administrators, no risk of posting errors, and a more accurate and real-time understanding of where your monthly financials stand.

The electronic remittance advice for medical billing in BillingTracker supports more efficient payment posting and faster payment collection

In addition to supporting ERA file transactions, BillingTracker offers an array of other features that make it easier for behavioral health providers to manage client and insurer payments. This includes the ability to record bulk insurance payments covering multiple clients, manage credit balances for payers and patients, send statements through the Patient Portal, use sophisticated rules to meet payer requirements, and generate collection letters through integrated collection methods.

Learn more about how BillingTracker can improve your financial outcomes. Request a demo.