Electronic Funds Transfer

The direct deposit of insurance payments into a provider's bank account, replacing paper checks with faster electronic payment processing.

Electronic Funds Transfer is how payers deposit payments directly into your bank account instead of mailing paper checks. Setting up EFT with each payer is a separate enrollment step that happens after your provider credentialing is complete. EFT enrollment requires your banking information: bank name, routing number, account number, and account type (checking or savings). Most payers use a standard enrollment form. Some payers use the CAQH EFT enrollment portal, which lets you set up EFT with multiple payers through a single interface. The benefits of EFT are significant. Paper checks take three to seven days to arrive by mail, then need to be deposited, then take another day or two to clear. EFT payments hit your account in one to two business days after the payer releases them. For a practice receiving hundreds of payments per month, the cash flow improvement is substantial. Most payers now encourage or require EFT. CMS requires all Medicare payments to be made via EFT unless the provider qualifies for a hardship exception. Some commercial payers charge extra fees for paper check processing to incentivize electronic payment adoption. EFT is paired with ERA (Electronic Remittance Advice), which is the electronic version of the Explanation of Benefits. When you receive an EFT deposit, the corresponding ERA tells your billing system which claims were paid, how much each one was, and what the patient owes. Many practice management systems can auto-post ERAs, which eliminates manual payment posting. Set up EFT as early as possible in the enrollment process. Some payers allow you to configure EFT during credentialing so payments start flowing electronically from day one. Others require you to wait until after your enrollment is active. Either way, do not default to paper checks. The time and cost savings of EFT are immediate.