What is ERA in Medical Billing & Why it Should be Integrated?

Medical and healthcare providers wish to have the claim accepted on the first attempt, and providers want their claims to be error-free. Learn how ERA and EOB can efficiently improve reimbursements and collection rates.

What Is ERA & EOB?

ERA is an abbreviation for Electronic Remittance Advice, and EOB stands for Explanation of Benefits. All medical providers want their claims to be accepted on the first attempt, and their claims must be error-free. That is possible only if the medical billing staff is trained enough to read and understand the ERA and EOB easily.

What Does ERA Mean When It Comes to Medical Billing?

After the claim submission to the clearing house, it is sent to the insurance provider. Once the payer receives the claim, within two or three weeks, the payer will inform the healthcare provider through ERA/EOB whether the claim will be paid or denied.

In medical billing, the communication between the payer and provider through ERA/EOB is very significant and has a lot of benefits.

Let’s read how they are different from each other:

Electronic Remittance Advice – ERA

After reading the name, one thing is clear: it is Handled Electronically. Mostly, when the payment concerns ERA, they are sent in the form of checks via traditional mail. They are also delivered through direct deposit or EFT (Electronic Funds Transfer). This is the major reason that when you are connected with ERA, then in the claims, you need to add your bank details to make the direct money deposit.

In addition to serving as a communication medium and a payment mechanism for remittances, ERA operates more quickly than EOB.

Explanation of Benefits – EOB

When the services are rendered to the patient by the healthcare provider, then the explanation of the benefit is formed. EOB has been sent to the provider through mail once the claim has been processed, and the payment of the rendered services is sent through the traditional mail in the form of checks.

The reasons for sending an EOB to the provider by the insurance provider are the following:

• Cost of all medical services rendered by a provider
• The amount of money saved by patient visits to in-network providers in detail
• Information on prescriptions or costs the patient will be responsible for paying out-of-pocket.

Why Is There A Usage of ERA and EOB In Medical Billing?

There’s a huge importance of ERA and EOB in confirming information of denials, submission of claims, and payment schedules. Because of them, you can easily learn about the number of services and additional information, such as co-insurance and deductibles, that are the specific expenses that patient has to bear out of pocket.
Once you know what you need to pitch to the patient directly, you can keep track of the reimbursement collection and remain informed about what to collect and what you need to pay.
Providers must provide all relevant information in EOB management systems, such as tracking down patient payment accountability.

There are so many benefits of entering information in the billing software that, includes:

• The software makes it easier to understand the taxable amount and the collection amount in one spot.
• Patient Liability
• Unpaid or wrongly paid bills and claims can be easily followed up on

How ERA/EOB Can Be Maintained?

The following information from the healthcare provider is necessary to get the most out of an EOB or ERA:

• Dependents name (an entity that is responsible for receiving the services and payments after you)

• The information about the service provider, such as the dentist, surgeon, specialist, clinic, or hospital

• Information about the patient, their health insurance ID, their claim number, their policy number, and their dependents.

• Your healthcare history, including the type of services you received, when they were provided, and how long you were under treatment.

• The specifics of the claim that was made and filed by the provider to the insurance firm.

• The cost of the services that the insurance company, either primary or secondary, has covered and how much is still owed by the patient. The insurance company covers the amount and the patient’s financial responsibility.

Additionally, there are some limitations on how much money you can get from the insurance company for each item. Contract adjustments are the agreed-upon difference between the price you charge and the price the insurance company accepts.