What an 835 remittance is and how to post it line by line

The 835 is the electronic remittance advice (ERA): X12's Health Care Claim Payment/Advice transaction. It is the national HIPAA standard for telling a provider how claims were paid. CMS, for example, sends every Medicare ERA in the X12 835 version 5010 format. It replaces the paper explanation of payment, and it is meant to be read by software, not by people.

One 835 usually covers one payment: one EFT or check, and every claim that payment settles. Payers that pay electronically, directly or through a clearinghouse, can send it. Some brokers send their own payment report instead; the same posting habits apply to those.

An 835 is a stack of segments, each a line of data with a short name. You do not need to read the raw file, but knowing the layers helps when a posting does not add up:

• The payment (BPR): the total amount, how it was paid and when.
• The trace number (TRN): the EFT or check number, which is how you match the file to the deposit in your bank account.
• Each claim (CLP): your claim number, what you billed, what was paid, and the claim's status.
• Each service line (SVC): one per billed line, so for a van trip the base code and the mileage code each get their own.
• Adjustments (CAS): on the claim or the line, each with a group code, a reason code and an amount.
• Provider-level adjustments (PLB): money taken or added that is not tied to one claim, such as a recoupment of an earlier overpayment.

The rule that makes it work is balance. For each line, what you billed minus the adjustments equals what was paid. For the file, the claims' payments plus or minus the provider-level adjustments equal the deposit. If your posting does not balance, something was skipped.

Every adjustment carries a group code, which says who owns the difference:

• CO, contractual obligation: the payer is not paying it and you may not bill the rider for it, such as the gap between your charge and the contracted rate.
• PR, patient responsibility: the amount the member owes, such as a co-payment.
• OA, other adjustment: neither of those.
• PI, payor initiated reduction: a reduction the payer made on its own grounds.

Then a claim adjustment reason code (CARC) says why. X12 describes these codes as the reason a claim or service line was paid differently than it was billed. A remittance advice remark code (RARC) can add detail to a CARC; RARCs that begin with "Alert:" are information only and do not explain an adjustment. The CARCs NEMT billers see most often include:

• 45: charge exceeds the fee schedule or contracted amount. Usually just your rate versus theirs; not a denial.
• 197: precertification or authorization absent.
• 18: exact duplicate claim or service, common when two trips on one day lack times and destinations.
• 16: claim lacks information or has billing errors. Look for a RARC saying which.
• 29: the time limit for filing has expired.
• 4: the procedure code is inconsistent with the modifier used.

The full lists are maintained on X12's site and are updated regularly, so look a code up rather than trusting memory.

1. Match the file to the deposit. Find the bank deposit with the same trace number and amount. If they differ, stop and find out why before you post anything.
2. Match each claim to what you sent, by your claim number. A claim you cannot find usually means it was billed under another number or by someone else.
3. Match each service line to the leg it billed. For a van trip, the base line and the mileage line belong to the same leg, and each can be paid or cut on its own.
4. Record what was paid on each line, and every adjustment with its group, reason and amount. Do not net them into one figure.
5. Write off contractual adjustments (CO-45 and its kind) as expected. They are not denials.
6. Put every denied or partly paid line on a worklist, grouped by reason: missing authorization, duplicate, missing information, late. Each group has one fix.
7. Post provider-level adjustments separately, and find the claim each recoupment refers to.
8. Watch for reversals. A payer that corrects a claim may reverse the first payment and pay it again in the same or a later file. Post both, so the leg's balance is right.

Line by line matters for NEMT because the same trip has two or more billed lines. A payer may pay the base and cut the miles, or deny the second leg of a round trip as a duplicate. A lump posting would show a short payment and nothing else.

Fix the cause, not only the claim. If missing authorizations show up every week, the fix is upstream: no trip should be scheduled without one. If duplicates show up, the claim needs times and destinations for second trips. Our post on Medi-Cal NEMT billing codes covers what a clean claim carries, and trip sheets covers the record behind it.

Corrected claims have deadlines too. A denial you find in week six may already be close to the payer's limit, so work the list every week.

In MileCall you upload the payer's 835 remittance. Every leg posts as paid, partly paid or denied, with the reason in plain words, and the invoice's balance moves with it. Because each charge was priced per leg from the payer's own rates, the remittance lands on the same legs that were billed. See MileCall billing.

1. Remittance Advice: Electronic Remittance Advice (835/ERA) (CMS)
2. 835 Health Care Claim Payment/Advice companion guide, version 005010A1 (CMS)
3. Claim Adjustment Reason Codes (X12)
4. Remittance Advice Remark Codes (X12)
5. Claim Adjustment Group Codes (X12)

This post explains how things work in general; it is not legal, medical or billing advice. Rules change and differ by payer, so check your payer’s current manual and your contract before you rely on any detail here.