Electronic Remittance Advice (ERA) is revolutionising the way healthcare providers manage their financial transactions. As a digital document sent by health insurance providers, an ERA details the payments and adjustments related to claims submitted by healthcare practitioners. This modern approach replaces traditional paper remittance advice, significantly enhancing efficiency and accuracy in medical billing processes.

What is Electronic Remittance Advice (ERA)?

ERA stands for Electronic Remittance Advice. It is an electronic document that provides a comprehensive explanation of the payment decisions made by health plans regarding claims submitted by healthcare providers ^[1]. Typically formatted as an ANSI 835 file, an ERA includes crucial information such as:

• Amount billed vs. amount paid
• Adjustments made to claims
• Reasons for any claim denials
• Patient financial liabilities
  

The ERA streamlines the communication between insurers and healthcare providers, allowing for quicker access to detailed financial data without the need for paper documents.

To better understand ERA, it's helpful to compare it with its paper counterpart, the Explanation of Benefits (EOB). An EOB is a document generated by insurance companies when they process a claim, detailing the patient's information, service date, billed charges, allowed amount, and the amount paid to the provider. It also outlines the patient's responsibility, including any deductible, co-payment, or coinsurance, along with any adjustments or denials and their explanations.

ERA is essentially a digital version of the EOB formatted for direct posting into the practice's billing system. This enables the automated import of EOB receipts from health insurance providers into practice management software, directly matching payments to debtor accounts in a structured format ^[7].

Benefits of Using ERA in Medical Practice Management

Implementing ERAs in your medical practice can yield numerous advantages:

• Faster Payments: ERAs facilitate quicker payment processing compared to traditional methods ^[1]. This speed not only improves cash flow but also reduces delays associated with manual reconciliation of payments.
  
• Increased Accuracy: By automating the posting of payments and adjustments, ERAs minimize human errors that are common with manual data entry ^{[1] [5]}. This leads to more precise reimbursement tracking and fewer billing disputes.
  
• Reduced Administrative Costs: The automation of payment processing means that staff can spend less time on paperwork and more time focusing on patient care ^[3]. This efficiency can significantly lower operational costs associated with billing and collections.
  
• Improved Patient Satisfaction: With faster and more accurate billing processes, patients receive clearer explanations of their charges, fostering trust and satisfaction with their healthcare experience ¹.
  
• Enhanced Compliance and Audit Readiness: ERAs help maintain accurate records, making it easier to comply with regulatory standards such as HIPAA ^[1]. They also streamline the audit process by providing clear documentation of payment histories.
  
• Streamlined Workflow: ERA streamlines the workflow of medical billing by providing healthcare providers with a comprehensive solution for managing payments, adjustments, and denials ^[5].
  

Manual ERA Creation

For private medical insurance companies that do not support ERA functions, many practice management software systems offer the ability to create manual ERAs. This feature allows you to post receipts to multiple debtor accounts simultaneously, rather than processing each invoice receipt individually. This flexibility ensures that practices can benefit from the efficiency of ERA even when dealing with insurers that haven't yet adopted the technology.

Integration with Provincial Insurance Systems

One of the key advantages of using ERA is its ability to integrate with provincial insurance systems. For example, integration with the Ontario Health Insurance Plan (OHIP) allows for the automatic import of Remittance Advice, reducing manual data entry and improving accuracy ^[4]. This integration is particularly beneficial for Canadian healthcare providers, as it streamlines the billing process for publicly insured services.

How to Use ERA in GoodX Healthcare

At GoodX Healthcare, we understand that integrating ERA into your practice management software can seem daunting. However, our system is designed to simplify this process.

For detailed guidelines on how to manage ERAs within the GoodX platform, please refer to our instructions below:

A) Creating a manual ERA for Private Insurance payments

1. Create a New ERA

• Navigation >> Communication >> Era Management

2. Input details as received from Insurance EOB

3. Save the ERA

• Payments can only be added once the New ERA has been Saved.
• The ERA can be saved for later or finalized to Post payment (see step 4 below).

B) Processing ERA for integrated Provincial Insurance payments

1. Import a New ERA

• Navigation >> Communication >> Era Management

2. Edit the Imported ERA

• The New ERA will now be classified as Status: ‘Imported’.

3. Check details as received from Insurance EOB

• The ERA can be saved for later or finalized to Post payment (continue to Step 4).

Finalizing All ERA payments

From the ERA Management screen, select the ERA to finalize (either a manually created or automatically imported ERA).

• This distinction can be seen in the ‘Type’ column.

4. Add New payment / Edit existing payment

• Either select ‘Add New Payment’ or select the existing payment line and choose ‘Edit Payment’.

5. Add payment information

Take note of the following:

• Ensure there are no Unlinked amounts anywhere.
• If the Insurance did not pay the entire amount (short payment), the leftover amount can be “Shifted” to the patient’s account for payment, “Written-off” as bad debt, or “Discounted”.
• When happy with the payments, “Mark Resolved”.
• ERA will not post unless it is 100% resolved.

6. Post Current ERA

Check the following:

• $0 Unlinked amounts
• $0 Difference between Paid amount and Assigned
• All Payments are “Resolved”

7. Progress should be 100% before posting

By leveraging the capabilities of Electronic Remittance Advice through GoodX Healthcare's software, you can enhance your practice's efficiency, improve financial management, and ultimately provide better care for your patients.

Citations:

1. Remittance Advice: All You Need to Know for Medical Billing
2. Ontario's Secure Messaging Pilot: A Digital Healthcare Leap
3. Electronic Remittance Advice (ERA) In Medical Billing - ClinicTracker
4. https://goodxhealthcare.ca
5. Electronic Remittance Advice (ERA) in Medical Billing - DocVilla
6. https://dam.assets.ohio.gov/image/upload/procure.ohio.gov/pdf/0A13186282021168150A1318_Base%20RFP.pdf
7. Getting started with electronic remittance advice
8. MedMatters Monthly - February 2024