What Are 835 and 837 Claims in Healthcare Billing?

The 835 and 837 claims are standardized electronic transactions in healthcare billing and payment. They are key components of Electronic Data Interchange (EDI), facilitating information exchange between healthcare providers and insurance companies. These electronic formats streamline communication, replacing paper-based methods and improving the financial flow within the healthcare system.

Understanding the 837 Claim

The 837 Health Care Claim Transaction Set is the electronic method for healthcare providers to submit claims for services rendered to payers, including insurance companies, Medicare, or Medicaid. This electronic claim is the digital equivalent of a paper form, containing details necessary for payers to process and adjudicate the services provided.

An 837 claim includes various data for accurate processing. This information encompasses patient demographics, provider details, diagnosis codes (ICD-10), procedure codes (CPT and HCPCS), service dates, and billed charges. The standardized structure of the 837 claim reduces manual errors and accelerates submission.

The 837 claim has three main variants. 837P is for professional claims from physicians and individual practitioners. 837I is for institutional claims from hospitals and facilities for inpatient and outpatient services. 837D is for dental claims. These distinct formats meet the unique requirements of various healthcare settings within a standardized electronic framework.

Understanding the 835 Claim

The 835 Health Care Claim Payment/Remittance Advice is an electronic transaction sent by payers, such as insurance companies, to healthcare providers. It provides a detailed explanation of how a submitted claim was processed, including payments, adjustments, or denials. This electronic document serves as the digital counterpart to a paper Explanation of Benefits (EOB) or remittance advice.

The 835 claim contains financial information for providers to reconcile accounts. It specifies the amount paid for each claim, patient responsibility (deductibles, co-pays, or co-insurance), and adjustments to the billed amount, including disallowed charges. It also provides reasons for any denial or partial payment using standardized reason codes.

This electronic remittance advice allows providers to understand the financial outcome of submitted claims without waiting for paper documentation. The 835 file can include information for multiple claims and payments, even bundling several checks or electronic funds transfers. Efficient processing of 835 data helps healthcare organizations manage cash flow and streamline payment posting.

The Interplay Between 837 and 835 Claims

The 837 and 835 claims function together as parts of the healthcare revenue cycle, forming a complete electronic communication loop. The process begins when a healthcare provider submits an 837 claim to a payer for services provided. Once the payer processes the 837 claim, they respond by sending an 835 claim back to the provider.

This sequential exchange allows providers to reconcile payments received against services billed. The 835 claim provides information for providers to understand the payer’s decision on each line item of the submitted 837, including paid amount, adjustments, and reasons for non-payment. This reconciliation process aids accurate financial record-keeping and managing patient accounts, helping identify discrepancies or underpayments.

The electronic, standardized nature of this exchange offers advantages to the healthcare system. It increases operational efficiency by reducing manual data entry and paperwork, minimizing human errors. This electronic flow accelerates processing times, resulting in faster payments to providers and improved cash flow. Clearinghouses often act as intermediaries, facilitating the secure and compliant exchange of these electronic transactions.