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Health Care Payment and Remittance Advice and Electronic Funds Transfer

Guidance for the health care payment and remittance advice transaction.


Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: August 02, 2020

The health care payment and remittance advice transaction is the transmission of either:

  • Payment, with information about the transfer of funds and payment processing from a health plan to a health care provider's financial institution
  • Explanation of benefits or remittance advice from a health plan to a health care provider
For an explanation of benefits or remittance advice from a health plan to a health care provider, see the EFT and ERA: Electronic Funds Transfer and Electronic Remittance Advice Transactions Basics fact sheet.

What Is an EFT?

An electronic funds transfer, or EFT, is the electronic message used by health plans to order a financial institution to electronically transfer funds to a provider’s account to pay for health care services. An EFT includes information such as:

  • Amount being paid
  • Name and identification of the payer and payee
  • Bank accounts of the payer and payee
  • Routing numbers
  • Date of payment

What Is an ERA?

An electronic remittance advice, or ERA, is an explanation from a health plan to a provider about a claim payment. An ERA explains how a health plan has adjusted claim charges based on factors like:

  • Contract agreements
  • Secondary payers
  • Benefit coverage
  • Expected copays and co-insurance

Claims Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs)

Under HIPAA, all payers, including Medicare, are required to use claims adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) approved by X12 recognized code set maintainers. Payers are not allowed to use their own proprietary codes to explain any adjustment in the claim payment.

You can request new codes and revisions to existing codes. Select the “Change Request Form” option on the official Washington Publishing Company website pages for CARCs or RARCs.

Requests for codes must include suggested wording for the new or revised message, and an explanation of how the message will be used and why it is needed. Additional Medicare-specific information is available in the Medicare Claims Processing Manual, (IOM Pub. 100-04) Chapter 22 - Remittance Advice.

The CARC Committee reviews requests 3 times a year.

The RARC Committee reviews requests 12 times a year.

HIPAA Adopted Standards

HHS has adopted two standards for EFT transactions:

  • CCD+, otherwise known as the NACHA Corporate Credit or Deposit Entry (CCD) with Addenda.
  • X12 835 TR3 TRN Segment, for data content of the Addenda Record of the CCD+. 

HHS has adopted one standard for ERA transactions:

  • X12 835 TR3 TRN Segment, for data content of the Addenda Record of the CCD+.

Health plans are required to input the X12 835 TR3 TRN Segment into Field 3 of the Addenda Record of the CCD+. The TRN Segment in the Addenda Record of the CCD+ should match the TRN Segment in the associated ERA that describes the payment. Using the same TRN Segment helps to match the payment to the correct remittance advice, a process called re-association.

Note: The EFT standards apply only to transmissions of data over the Automated Clearing House (ACH) Network—a processing and delivery system for EFT that uses nationwide telecommunications networks.

To learn more about adopted standards, visit the Adopted Standards and Operating Rules webpage.

Operating Rules 

EFT and ERA went into effect on January 1, 2014.

View the Phase III EFT and ERA Operating Rules on the CAQH CORE website.

To learn more, see the EFT and ERA Operating Rules.


You can submit complaints about potential Health Care Payment and Remittance Advice and Electronic Funds Transfer violations via the Administrative Simplification Enforcement and Testing Tool (ASETT). Learn how to file a complaint.

Download our Compliance Review Supplemental Resources zip file (ZIP) to learn about common violations related to this standard.


An organization may request an exception from the use of a standard transaction from the Secretary to test a proposed modification to that standard. Learn about our exceptions process and the principles for requesting an exception (PDF).

HHS is committed to making its websites and documents accessible to the widest possible audience, including individuals with disabilities. We are in the process of retroactively making some documents accessible. If you need assistance accessing an accessible version of this document, please reach out to the

DISCLAIMER: The contents of this database lack the force and effect of law, except as authorized by law (including Medicare Advantage Rate Announcements and Advance Notices) or as specifically incorporated into a contract. The Department may not cite, use, or rely on any guidance that is not posted on the guidance repository, except to establish historical facts.