Don’t you hate sitting in traffic trying to get to the bank before they close so you can deposit those long-awaited and keenly needed insurance payment checks?  It’s time for medical practices to stop wasting time and opt in to programs that allow payers to credit your bank accounts with payments for services you’ve rendered to patients.  In fact, as of January 1, 2014, use of electronic funds transfer (EFT) services will be required for all health plans, as provided for in the Patient Protection and Affordable Care Act of 2010. 

Before you balk at the idea of going electronic, let’s lay out a few facts about EFT’s versus paper checks, and then make an educated decision about which method of deposit is really better. 

1. EFT’s deliver payments faster, and this accelerates your cash flow.  EFT’s are available for immediate withdrawal, whereas paper checks can take three to seven days in the mail and in negotiating the banks.
2. EFT’s are easily trackable and more secure from risk of fraud since the funds don’t have to pass through any hands on their way to your account.  In fact, in 2008, 90 percent of payment fraud was linked to paper checks, while only 4 percent stemmed from EFT’s. 
3. EFT’s cost less to issue than paper checks.  The Department of Treasury calculates the cost to process one EFT payment at 11 cents compared to $1.03 per check, excluding the cost of labor.  From the payer’s point of view, EFT’s will reduce their overall cost of doing business.  It’s easy to see how payers issuing a high volume of checks every day can make pennies add up to substantial dollar amounts.
4. EFT’s are deposited automatically, so you won’t have to waste any more time and gasoline driving to the bank to make a deposit. 

We view the switch to mandatory use of EFT services as a win-win for everyone.  The government is happy because EFT’s lower the overall cost of healthcare, payers are happy because EFT’s are cheaper to produce, and you will be happy because you’ll receive your money faster, without having it pass through many hands and letting details about your revenue come out to multiple individuals.

To summarize:  Paper checks cost more to produce, take more time in transit, and expose you to a greater risk of fraud.  EFT’s are faster, cheaper, and safer.  We don’t see any reason a provider would not want to switch to EFT payments as soon as possible, even before it becomes mandatory.  So sign up now and accelerate your cash flow.