Tuesday, 30 June 2015

Understanding EDI 835 Electronic Remittance Advice

First Let us understand the Workflow

  1. Patient Calls / Walks to the Physician(or Doctor or Provider) office to fix an Appointment.

  2. On the Appointment day, patient checked In to the office and give all the demographics information(last name, first name, DOB, address,etc.) and insurance information;

  3. Doctor check the Patient Previous medical record and does the treatment to the patient for the current problem(or Disease);
  4. Each Disease represents by a Code. That code is called ICD. It is also called Dx Codes or Problems or ICD Codes or Diagnosis Codes; So for each patient visit, doctor choose the correct ICD Code;

  5. Each treatment represent a code and that code is called CPT. It is also called Procedure Codes; So for each patient visit, doctor choose the correct CPT Code;

  6. Once all the process are over, now patient leaves the doctor room. Now the doctor office to get paid for the service provided to the the patient;

  7. Since the patient has health insurance, so patient leaves(checked out) the clinic and ask the clinic to get money from the insurance company;

  8. Now the Billing department of the Clinic prepare the Bill(Claim) by entering all the necessary information. This process is called Charge entry or Charge Posting;

  9. Once the Claim is prepared and send to the Insurance company for payment; 

  10. Billing Department using the Practice Management System (PMS), send the claim via EDI File. The EDI Transaction used to create the claim in the Electronic format is EDI 837
    Refer the Following Link to understand more on EDI 837
    What is an EDI ?
    EDI 837 Health Care Claim

  11. Once the 837 EDI File is created, then it will be send to the Clearing House.

  12. Clearing House will validate the EDI File and send to the particular insurance company.

  13. Insurance Company Process the Claim and prepare the Check (Cheque) and Statement(This statement is called Explanation of Benefits OR Remittance Advisory (EOB)          
    Refer the following Link for EOB
    EOB - An explanation of benefits 

  14. Insurance company also generates the EDI 835 File using their System. EDI 835 is electronic version of EOB.
    The Electronic Remittance Advice (ERA), or 835, is the electronic transaction which provides claim payment information in the HIPAA mandated ACSX12 005010X221A1   Format. These files are used by practices, facilities, and billing companies to Auto Posting payments into their systems.
    Refer the following link for Sample

    EDI 835 Health Care Claim Payment/Advice:

  15. Once the Check, Statement (EOB) and ERA File are ready, then insurance company first send the ERA File and EOB to the clearing house.Second , insurance company  will send the Check and copy of the EOB to the billing provider address . Third for each patient in the statement, the copy of the EOB will be emailed.

  16. Now the Billing Team download the EOB and ERA from the clearing house. If the PMS system has Auto Posting Using ERA File, then they will download the EDI File and do auto posting. If there is no auto posting Module, then they will download the EOB PDF and apply posting manually.Remember, some time, ERA/EOB file will be reach the clearing house, even before the insurance company send the payment check to the doctor.

      Now let us understand the EDI 835 File.

    1.        Download the EDI File Here and Corresponding PDF Format here.

    2.       Open the 0000060267841_070209.txt in Notepadd ++

    3.          Replace as follows


    4. The segment BPR Contains the Information about the Check No and Check Amount



      In this example, Check Amount is $ 4.

            5. The next NI PR contains the Payer Information




         6. The next CLP Contains the Claim Information and Claim Level Payment


                          a)  CLP01 Is the Key Field to Match with the System. The value(153 is this example) is the claim Number in the Provider System. This number is an echo back number from EDI 837 Submit Electronic Claims
                      b)  CLP02 is the Claim Status code which determines whether it is paid by primary or secondary, etc


              The other information are


            7.  Segment SVC Contains Line Item Information . This is main and important segment because it contains Line Item Payment, Copay, Coninsurance, etc




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