Medical Billing

What Is ERA in Medical Billing and How Beneficial It Is to Integrate ERA?

What is ERA in medical billing and how beneficial it is to integrate ERA

ERA stands for Electronic Remittance Advice and is used by means of electronic communication where the need for EOB Explanation of Benefits becomes negligible.

But what is ERA in medical billing? Medical healthcare providers always wish to have claim acceptance in the first go. And it becomes essential for the providers to reduce/eliminate the recurring errors from their claims. However, this can be made possible once only if the medical billing staff is efficient and trained enough so they can read and understand ERA and EOB properly.

Experts believe that there’s always a chance of error in a medical billing claim, which can be the reason for claim denials. Explore how ERA /EOB can effectively improve reimbursements and collection rates.

What is ERA in medical billing?

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

What is ERA in medical billing

Communication through ERA and EOB in medical billing has its own significance and benefits to the provider and the payer. Here’s how they are different from each other.

EOB – Explanation of Benefits

The explanation of benefits is formed when the services are rendered to the patient by a healthcare provider. This EOB is received through email to the provider, once the claims are processed, the payment for the rendered services is sent through traditional mail in the form of checks.

The purpose of sending the EOB to the provider by the insurance provider is to inform;

  • The total cost of healthcare services a provider has provided
  • Details of the saved money that was saved from patient visits for in-network providers
  • The details of prescriptions or expenses that the patient needs to cover out-of-pocket

ERA – Electronic Remittance Advice

As the name suggests, it is made and handled electronically. Sometimes when the payment is associated with ERA, they are sent in the form of checks through traditional mail. They are also delivered by direct deposit or EFT (electronic funds transfer). This is why, even if you are connected with ERA, you still need to add your bank details to the claim to make bank deposits directly.

Besides EOB being a communication medium and ERA being a payment gateway for remittances, ERA works faster than EOB.

Why is EOB or ERA used in the medical industry?

EOB and ERA are essential for the confirmation of the information about the denials and submission, and of course for the payment schedules. Through them, you can easily identify the amount for the services and additional information such as co-payment, co-insurance, and deductibles that are some of the expenses that the patient has to bear out-of-pocket.

Once you are sure what to pitch to the patient directly, you can keep track of reimbursement collection and remain informed about what to collect and what to pay.

In order to trace the patient liability of payments, providers need to provide the details and all the other information in the EOBs management systems such as Advanced MD, Brightree, etc.

Why is EOB or ERA used in the medical industry

Several pros are there to entering information in the billing software, which includes;

  • The software helps understand the taxed amount and collection amount in a single place
  • Patient liability
  • Easy follow-up for unpaid or incorrectly paid bills and claims

How is EOB/ERA maintained?

To get the most out of EOB or ERA, the following information from the healthcare provider must be there;

  • The name or the name of the dependent (the entity who will be responsible to receive the payment and services after you)
  • The details of the provider who performed services like dentist, surgeon, specialist, clinic, or hospital
  • Patient information, health insurance ID, claim number, or policy numbers, dependents information
  • The form of healthcare services you received, the date and duration of the service like how long the treatment prevailed
  • The details of the claim that the provider submitted to the insurance company
  • The cost of services that the insurance company either primary or secondary has paid and how much is left to be paid by the patient
  • How much the insurance company has paid and the burden on the patient for out-of-pocket to pay.

There are also some restrictions that limit the amount of payments you can receive from each item from the insurance company. The agreement on the amount that you charge and the amount which is acceptable by the insurance provider is called contract adjustments.

Streamlining Revenue Cycle Management with ERA Medical Billing

In the ever-evolving world of healthcare finance, Electronic Remittance Advice (ERA) has become a cornerstone in efficient revenue cycle management. ERA medical billing transforms the traditional paper-based payment processes into a streamlined, electronic format, offering a multitude of benefits for healthcare providers and billing professionals.

The Advantages of ERA in Medical Billing

Enhanced Efficiency: ERA billing reduces the time spent on manual payment posting, enabling faster reconciliation and account resolution.

Improved Accuracy: Electronic processing minimizes human error, ensuring that payments are posted accurately to patient accounts.

Quicker Access to Information: With ERA, the details of claims payment are readily available, expediting the review and auditing processes.

Reduced Administrative Costs: By cutting down on paper, postage, and storage, ERA billing significantly lowers overhead expenses.

How ERA Billing Improves Financial Health

Implementing ERA medical billing into your practice’s operations can lead to a healthier financial ecosystem.

Here’s how:

  • Prompt Payment Processing: ERAs are received sooner than paper remittances, leading to quicker payment turnaround times.
  • Streamlined Denial Management: Clear and detailed reports allow for immediate identification and rectification of denied claims.
  • Enhanced Cash Flow: With the acceleration of the billing cycle, funds are available more rapidly, improving the overall cash flow.

Embracing the ERA Billing Revolution

As healthcare continues to digitize, embracing ERA medical billing is not just a convenience—it’s a strategic move towards a more robust financial framework. Practices that adopt ERA are positioning themselves for success in a competitive healthcare landscape.

To fully leverage the power of ERA, it’s essential to:

  • Choose a compatible medical billing software that integrates ERA seamlessly.
  • Train your billing staff on the nuances of ERA processing to maximize its benefits.
  • Stay updated with payer-specific requirements and changes in ERA standards.


ERA medical billing represents a significant leap forward in managing healthcare payments. By adopting ERA billing, practices can enjoy improved operational efficiency, reduced errors, and a stronger financial footing. As we continue to witness technological advancements, ERA’s role is set to become even more pivotal in the pursuit of streamlined, effective medical billing practices.