EFT Payment Logistics

http://www.fms.treas.gov/eft/regulations/vendexpress.html

Part of the Debt Collection Improvement Act of 1996 mandated that all Federal payers make their payments via EFT (electronic funds transfer) to save the costs of printing and mailing checks. Fortunately, this was not put into place immediately, but has been phasing in over the last 15 years, as Medicare has required all new providers and those making updates to their files to enroll to receive EFTs. There are very few providers who are still receiving paper checks from Medicare. EFTs have also been available with other Federal payers, like the VA, Railroad Medicare or Federal Corrections Facilities, but have been optional up to this point. We have received word from the VA that 2011 is the last year that EFT enrollment will be optional with them, and they will be pushing to get any stragglers enrolled before the end of the year. One reason that we have not aggressively pushed our clients in this direction is the large number of clients who share their County’s bank account with other medical providers, which causes a fair amount of consternation with the County Treasurer when an unidentified EFT arrives.

With Medicare, we are able to receive ERAs (electronic remittance advice) the day before the EFT is sent out, so that we can give adequate notice about the ownership of any given Medicare payment, but we currently do not have anything similar in place for VA payments. For the same reason, there has been some delay in putting on-line credit card payments into practice, due in part to the difficulty of identifying the correct provider to receive the funds when the payment goes to a shared account. Since this is clearly the direction that medical insurances are going—most commercial insurances also offer electronic payments—we would like to suggest that if you do not have a dedicated bank account for your EMS funds, that it would greatly simplify the accounting needed when an EFT arrives if it could be routed to a sub-account that is owned by only one District. There would be no doubt about the ownership of the funds, and the need for pre-notification would be eliminated. If you are one of those who are in a shared account situation, please question your Treasurer about the possibility of opening your own sub-account to receive EFTs. (They may thank you!)

Remember that if you have already enrolled the shared account to receive EFTs from Medicare or VA, you’ll have to allow time to send in updates to re-route your payments. You should also consider whether you would want Systems Design to make our local deposits of paper checks to your sub-account as well, so that all your deposits go to the same place. If so, you would need to provide us with deposit books and an endorsement stamp for your new account. This would allow all your EMS funds to be kept separately for accounting purposes, but would still allow your Treasurer to sweep funds out to the main account if required once they’d been credited to you.

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