What Is an ERA in Medical Billing? How EFT and ERA Impact the Medical Billing Process

In the healthcare industry, healthcare providers are more focused on making effective changes that directly positively affect their reimbursement process. But to receive the reimbursement on time and run the medical billing process smoothly, medical staff at the billing department must know what is an ERA in medical billing and how to read them.

ERA – Electronic Remittances Advice and EFT – Electronic Funds Transfer, both have a strong impact on the medical billing process. They provide a range of benefits associated with the accuracy of cash flow, time-saving and medical records. These two factors are used to inform the outstanding balance and collection of payments in the healthcare industry.

What is an ERA in medical billing?

What is an ERA in medical billing

Electronic remittance advice is an alternative to the paper-based explanation of benefits (EOBs). As ERA is performed electronically, therefore, it takes less time compared to EOBs to complete and automate the process while making fewer or no errors.

ERAs list down the details about a patient such as denied and accepted claims, final claim status, or the adjustment of the final amount owed. However, the ERA details are mandatory to mention instead of the payment suggested.

What is EFT in medical billing?

Through Electronic Funds Transfer, it can be assumed that is associated with financial transfers. Using EFTs, patients or insurance providers can send the money to the providers directly in their bank account. EFT works similarly to a company where the employees are on payroll and instead of receiving paper checks, the payment is directly deposited in their bank accounts.

EFT enables payers and patients in medical billing to pay the billed amount using the service without putting them into the hassle of paper checks or mail. It also needs to understand that the evolution of technology in the healthcare system will affect every part of the medical industry. Similarly, EFT is the only payment platform through which a patient can transfer directly into the provider’s account. Plus, it’s a similar payment platform that companies use for their employees for payroll and pay them directly through their bank account without getting stuck into paper check hassles.

Through EFT, it is also possible to receive payment from third-party payers and patients against your services without even meeting them in person and making long queues for the purpose of check-ins. Also, without integrating EFT as a payment gateway, the patient payment tool instilled into your practice management software won’t work.

Significant benefits of EFT and ERA in medical billing

Several benefits of ERA are there for using it for medical billing such as securing providers’ time from managerial and administrative tasks and allowing them to focus more on providing healthcare services. Here are some ways where ERA can aid you besides medical billing;

Significant benefits of EFT and ERA in medical billing

Fewer errors – On working manually with numbers and calculations, there is a high chance of errors which can affect the whole billing process. When there’s a long list of EOBs to deal with, incorrect information about your client, payers, patients, and even about your practice can bring serious troubles. Switching your practice to ERA will automate the process, make comprehensive improvements, and optimize your overall billing performance.

Saving time – EOBs, as said, are more likely managed manually, and yet they are prone to errors. Given the high volume of claims and bills to work out, they can easily take days and even weeks to complete. As ERA is an electronic process, it becomes seamless to generate practice bills and send them without errors. As a result, your front office staff will look at other competitive options and care for patients more as their time-consuming tasks are looked after.

Easier grouping – Whenever you encounter a patient, you have to provide the payment details to your patients using EOBs. Here comes the most powerful tool of ERA which enables a provider to group out all the patient’s communication in one place and pitch each of them electronically. With easier communication, patients’ bills remain updated, enabling a provider to become aware of the status of payments due and paid.

Claim denial management – ERA helps providers to get a grip on denied claims. With the electronic platform, it becomes easier to group your denied and accepted claims separately and keep track of errors to avoid future claims. Plus, it also helps providers manage resubmissions of denied claims, and streamline them according to near date, hence, aiding in generating revenue.

Benefits of EFT in medical billing

Electronic funds transfer can improve the medical billing process in different ways, such as;

  • Identification of services made easier – When patients are served with the payment bills after encounters, manual EOBs don’t specifically list the services the patient is paying for. However, EFT coupled with ERA ties practice to inherit details and generate detailed claims mentioning the services rendered. Through this process, using the ERA patient portal and keeping transparency, making payments becomes much easier for patients and insurance payers.
Benefits of EFT in medical billing
  • Streamlined cash flow – EFT improves the cash flow of a practice pairing with ERA and eliminating manual EOB productions. The integration of ERA and EFT enables patients to remain aware of the payment they would owe sooner. It hides peace of mind for a provider that he doesn’t need to provide separate reminders or send emails to the patient’s address.
  • Accounting records in hand – With EFT, electronic records of payments are accessible anytime. So, whenever you are billing for new services to patients, you will have the complete payment history linked together and you would know the list of treatments they have taken and if there are previous outstanding balances.
  • Discourages security threats – Whenever you send paper bills through the mail, you know that it lacks security and reports are there to show the stolen mailboxes that often end up delaying the collection process. The built-in security HIPAA compliance software makes it possible to secure payment details and enables users to have a data security advantage which eventually lessens the risks of data breaches.


Implementing innovative techniques like EFT and ERA to satiate your medical billing needs will not only ease the process but cumulatively bring security to the medical billing process. If you are not sure about how to make these structural changes, then you can outsource your practice billing process by just finding a good outsourcing resource.