Electronic Funds Transfer for Payments to Health Care Providers

Type	Standard / Implementation Specification	Standards Process Maturity	Implementation Maturity	Adoption Level	Federally required	Cost	Test Tool Availability
Implementation Specification	NACHA Operating Rules, Appendix One and Three ACH File Exchange Specifications; ACH Record Format Specifications, Subpart 3.1.8 Sequence of Records for CCD Entries; and Data content in CCD Addenda Record: ASC X12 Standards for Electronic Data Interchange Technical Report Type 3, “Health Care Claim Payment/Advice (835), April 2006: Section 2.4: 835 Segment Detail: "TRN"	Final	Production		Yes	$	Yes

Limitations, Dependencies, and Preconditions for Consideration	Applicable Value Set(s) and Starter Set(s)
File testing is done between the banks and their originators of the ACH files, between the banks and the ACH Operators and for the software vendors with the ACH Operators. Testing for a new originator is done with the bank before they originate their first file. Testing between the banks and the ACH Operators is done when there is a new application – currently a lot of testing is being done between the banks and the ACH Operators for Same Day ACH Debits (to be implemented in September 2017). If a bank changes ACH processing software or hires a third-party vendor, testing will be done between the bank and the ACH Operator. Because only the current version of an ACH file format is allowed through the ACH Network, the originating bank reviews all files to make sure that the formatting is correct before they send the files to the ACH Operators. The ACH Operators also review all files to make sure that the mandatory fields within the ACH file are formatted correctly – if they are not the files are returned to the originating bank. Both the originating bank and the ACH Operators are looks at the files to make sure that the files are syntactically correct. ACH Network is an electronic funds transfer system governed by the NACHA Operating Rules, which provides for interbank clearing of electronic entries for participating financial institutions.	All covered entities are required to meet HIPAA security and privacy requirements in order for Electronic Data Interchange (EDI) to occur. For Automated Clearing House (ACH) Network risks and enforcement, one can refer to NACHA’s ACH Network Risk and Enforcement Topics and 2019 NACHA Operating Rules & Guidelines.

Limitations, Dependencies, and Preconditions for Consideration

Applicable Value Set(s) and Starter Set(s)

File testing is done between the banks and their originators of the ACH files, between the banks and the ACH Operators and for the software vendors with the ACH Operators. Testing for a new originator is done with the bank before they originate their first file. Testing between the banks and the ACH Operators is done when there is a new application – currently a lot of testing is being done between the banks and the ACH Operators for Same Day ACH Debits (to be implemented in September 2017). If a bank changes ACH processing software or hires a third-party vendor, testing will be done between the bank and the ACH Operator.
Because only the current version of an ACH file format is allowed through the ACH Network, the originating bank reviews all files to make sure that the formatting is correct before they send the files to the ACH Operators. The ACH Operators also review all files to make sure that the mandatory fields within the ACH file are formatted correctly – if they are not the files are returned to the originating bank. Both the originating bank and the ACH Operators are looks at the files to make sure that the files are syntactically correct.
ACH Network is an electronic funds transfer system governed by the NACHA Operating Rules, which provides for interbank clearing of electronic entries for participating financial institutions.

All covered entities are required to meet HIPAA security and privacy requirements in order for Electronic Data Interchange (EDI) to occur.
For Automated Clearing House (ACH) Network risks and enforcement, one can refer to NACHA’s ACH Network Risk and Enforcement Topics and 2019 NACHA Operating Rules & Guidelines.

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