Electronic Funds TransferElectronic Funds Transfer (EFT): With EFT, Medicare can send payments directly to a provider’s financial institution whether claims are filed electronically or on paper. All Medicare providers may apply for EFT.
Advantages of Electronic Funds Transfer (EFT): EFT is similar to other direct deposit operations such as paycheck deposits, and it offers a safe modern alternative to paper checks. Providers who use EFT may notice the following benefits:
- Reduction to the amount of paper in the office
- Valuable time savings for staff and avoidance of hassle associated with going to the bank to deposit Medicare check
- Elimination of the risk of Medicare paper checks being lost or stolen in the mail
- Faster access to funds; many banks credit direct deposits faster than paper checks
- Easier reconciliation of payments with bank statements.
EFT Formats: Medicare contractors can use one of two formats to transmit provider electronic claim payments to financial institutions: Automatic Clearinghouse (ACH) format, or table 1 of the X12 835 version 40101A1 implementation guide which was adopted as a national standard under HIPAA for electronic payment and remittance advice. Both of these formats are considered national standards.