What Is “ERA” in Medical Billing?

November 27, 2022

doctor sitting at her desk writing on a clipboard

The electronic remittance advice (ERA) describes the payment or resolution of a claim by a payer in an electronic format. An ERA provides information about payment transfers and payment processing from a healthcare provider’s bank. It explains the actual remittance of funds, if any, and in what amount. Also included in an ERA are adjustments to how funds were distributed based on benefits, contracts, copays, or secondary payers.

You can save time and money by automating your practice’s collection and payment processes. You may already submit electronic claims or eligibility request forms to insurance companies. If so, you’ve already realized the many benefits of moving from manual to automated processes.

The electronic receipt of remittance advice rather than by mail offers an additional way to use electronic health records (EHRs) to improve patient care. With electronic remittance advice (ERA), you can replace piles of papers with an efficient and streamlined payment reconciliation procedure. Discover everything you need to know about ERA for your practice in this article.

ERA Advantages

Practitioners that take full advantage of ERAs are able to benefit in many ways:

  • Increased practice automation: Many software systems post all payments and standard adjustments to the patients’ accounts. This eliminates the managerial burden of manually entering these transactions into the system.
  • Manual tasks reduced: The ERA eliminates the necessity of handling paper, opening mail, and filing papers, as well as reducing the risk of lost records.
  • Easier to process coordination of benefits: HIPPAA mandates ERA standardization. This results in the ability to consistently report adjustments from other payers, eliminating the need for extra managerial tasks such as copying, manually scanning, or attaching paper documents with the secondary claim.
  • Improved patient experience: Patients can view their account balance at any time, which is not possible when using manual methods.
  • Reduced administrative costs: The cost of maintaining an office staff to handle paper claims is eliminated. This also frees up time for staff to handle more impactful tasks, like denial appeals.
  • Increase in standardization: Health plans are mandated to employ standardized sets of code. This improvement in consistency facilitates payment and improves the denial management process.
keyboard mug clipboard and stethoscope on desk

More Advantages of Using ERAs

  • They save time: EOBs (explanation of benefits, the paper version of ERAs) are often manually processed. Considering the ever-increasing volume of claims that change hands through the medical field, manual processing will quickly become tedious and time-consuming. In contrast, ERAs are entirely electronic, making them seamless to create and send. This results in precious time being preserved in your front office, allowing your staff to be more available for patients and to perform other duties.
  • Fewer errors: When manually processing a high number of EOBs, it’s easy to make mistakes. Switching to an ERA billi­ng system significantly reduces the freq­uency of these errors. This results in more accu­rate and com­prehensive correspondence that can easily be moved and tracked.
  • Easier grouping: By using electronic medical records (EMRs), you can group all of a particular type of claim into one communication. This makes it easier for your practice to track a single claim at a time, which helps streamline the process of sending out bills and collecting payments.
  • Easier to tell who paid and who didn’t: You can easily track whether a claim has been paid. Since ERAs are electronic, they‘re much easier to follow than paper records. This results in you getting more accurate account receivables. Plus, because delivery is automatic, you don’t need to adjust your accounts receivable books manually.
  • Easier to manage claim denials: A small number of rejected claims is unavoidable for your practice. The good thing about ERAs is that you can quickly organize denials, partial pays, and approvals. This bird’s eye view will allow you to focus with accuracy, leading to increase revenue.
  • Easier to analyze metrics: Since ERAs are electronic, they usually include tools for reporting and analytics. This will enable you to review data on how efficient your practice is or isn’t in collecting payments. You’ll likely see metrics – like how fast your patients pay after getting notices and how much revenue is earned each period, including months or quarters, from ERAs. You’ll be able to use these metrics to enhance your overall performance.

The Anatomy of an ERA

How ERA data is shown depends on which software vendor the payer uses. The ERA display or every vendor tends to have a different look and feel, but they all communicate the same basic structure and elements. Some vendors also feature a view of the ERA that adopts the EOB format used by Medicare, even though this isn’t mandated.

The ERA system uses standardized coding systems to communicate between providers and payers. This makes it easier for providers to view claims from different payers and for vendors to create automated processes that handle payments.

ERA codes deliver crucial information regarding a claim’s status that your staff must understand when deciding on a course of action and performing follow-up.

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About the author 

Gene Hooks

Gene Hooks is a content marketer who's a writer during the day and a reader at night with a passion for researching and finding the best medical companies that lead to patients having a better experience and doctors achieving better results.

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