ERA (Electronic Remittance Advice)

An ERA (Electronic Remittance Advice) is the electronic version of a paper EOB, transmitted from the payer to the provider as a HIPAA 835 transaction through a clearinghouse. ERAs are the foundation of automated payment posting in modern medical billing: they enable a clearinghouse or PM system to auto-post payments to patient accounts, auto-route denials into appeal queues, and reconcile expected vs actual reimbursement at the line-item level. Each ERA contains every CARC and RARC for every line, the contracted allowed amount, the actual paid amount, the patient-responsibility breakdown, and the check or EFT trace number tying the remittance to the corresponding payment. Compared to manual EOB processing, ERA-driven posting is 10-20x faster and dramatically more accurate — manual posting introduces transposition errors and missed denial routing that ERA workflows catch automatically. Most major payers default to ERA delivery for any provider enrolled with EFT (Electronic Funds Transfer) for payment, and CMS requires ERA support for all Medicare Administrative Contractors. The 835 transaction also enables underpayment detection: by comparing the paid amount to the contracted fee schedule programmatically, the practice can flag claims paid below contract rate and route them to the underpayment recovery workflow.