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X12 transaction guide · Healthcare and insurance

EDI 835 Health Care Claim Payment/Advice

The X12 document health insurers use to make a payment, send an explanation of benefits (remittance advice), or both, to a healthcare provider.

Sent by
Health insurer or payer
Received by
Healthcare provider (often through a clearinghouse)
Standard
ANSI ASC X12

What is an EDI 835?

The EDI 835 Health Care Claim Payment/Advice is the ANSI X12 transaction set a health insurer uses to make a payment, send an explanation of benefits remittance advice, or make a payment and send the advice together, to a healthcare provider, directly or through a financial institution.

The 835 explains how each claim and service line was adjudicated: what was paid, what was adjusted and why, and what the patient owes. Providers post it to patient accounts automatically. HIPAA designates it as the standard for electronic remittance advice in the United States.

How the EDI 835 worksDiagram of the EDI 835 Health Care Claim Payment/Advice. Health insurer or payer sends it to healthcare provider (often through a clearinghouse). It usually follows 837. It is usually followed by 999. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BPR (Beginning Segment for Payment Order/Remittance Advice). 2 optional loops are listed by their first segment.How the EDI 835 worksHealth Care Claim Payment/Advice: who sends it, where it fits and what the standard marks required1 WHERE IT FITSUSUALLY FOLLOWS837Health Care ClaimEDI 835SENDERHealth insurer or payerRECEIVERHealthcare provider(often through aclearinghouse)997 or 999 acknowledgment back, if the partners agreeUSUALLY FOLLOWED BY999ImplementationAcknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDsISA … IEAFunctional group, ID code HPGS … GETransaction set 835ST … SEHEADINGBPRBeginning Segment for Payment Order/RemittanceAdvice+ 1 optional loop, starting with:N1DETAIL+ 1 optional loop, starting with:LXBlue box: required loop. Optional loops are listed by the segment that starts them; when a loop is used, that first segment is required. Optional segmentsoutside loops are not drawn.Structure: required segments and loops in the X12 008010 listing for the 835. Your trading partner's implementation guide adds its own requirements.
How the EDI 835 worksDiagram of the EDI 835 Health Care Claim Payment/Advice. Health insurer or payer sends it to healthcare provider (often through a clearinghouse). It usually follows 837. It is usually followed by 999. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BPR (Beginning Segment for Payment Order/Remittance Advice). 2 optional loops are listed by their first segment.How the EDI 835 worksHealth Care Claim Payment/Advice: who sendsit, where it fits and what the standard marksrequired1 WHERE IT FITSUSUALLY FOLLOWS837Health Care ClaimEDI 835SENDERHealth insurer orpayerRECEIVERHealthcareprovider (oftenthrough aclearinghouse)997 or 999 acknowledgment back, if the partnersagreeUSUALLY FOLLOWED BY999Implementation Acknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDs (ISA… IEA)Functional group, ID code HP (GS … GE)Transaction set 835 (ST … SE)HEADINGBPRBeginning Segment forPayment Order/RemittanceAdvice+ 1 optional loop, starting with:N1DETAIL+ 1 optional loop, starting with:LXBlue box: required loop. Optional loops are listedby the segment that starts them; when a loop isused, that first segment is required. Optionalsegments outside loops are not drawn.Structure: required segments and loops in the X12008010 listing for the 835. Your trading partner'simplementation guide adds its own requirements.

How to read this diagram: the top row shows who sends the 835, to whom, and which documents usually come before and after it. The lower part shows what X12 release 008010 itself requires: the envelopes around the 835 and the segments and loops the standard marks as required, area by area. Optional loops are listed by the segment that starts them rather than drawn in full. This is the standard's minimum, not a trading partner's requirement: each partner's implementation guide usually makes some optional loops mandatory, restricts the codes and may use a different release.

Expand diagram Download SVG

When it is used

  • Posting insurance payments to patient accounts
  • Explaining adjustments and denials by reason code
  • Reconciling payments with bank deposits

Where it fits in the document flow

Usually follows 837 Health Care Claim
This document 835 Health Care Claim Payment/Advice
Usually followed by 999 Implementation Acknowledgment

Structure

Mandatory segments in the 835 (X12 release 008010)

The segments X12 release 008010 marks as mandatory at their level, in order. Segments inside optional loops are needed only when the loop is used. This is the standard's requirement, not your trading partner's: each partner's implementation guide names the release it uses, adds the optional segments it requires and restricts the values. The requirement status comes from one published X12 reference listing and has not been checked against a second source.

  • ST
  • BPR
  • N1
  • LX
  • CLP
  • NM1
  • SVC
  • SE

Practical example

The 835 in practice

A health system receives an 835 for a week of claims paid by one insurer, together with an electronic funds transfer. Its billing system posts each payment and adjustment to the right patient account, moves patient balances to statements and sends denied lines, identified by adjustment reason codes, to the appeals team.

Implementation

Implementation considerations for the 835

  • Match the 835 to the related funds transfer using the trace number.
  • Map claim adjustment reason codes to clear follow-up actions.
  • Post payments at service line level, not only claim level, for accurate balances.

How ECOM helps

Automate the 835 with ECOM

Industry

Healthcare

Secure B2B integration and file transfer for providers, suppliers, distributors and healthcare partners.

Solution

Financial Document Automation

Automate invoices, remittances, payment files and bank statements from capture to posting.

Solution

EDI Integration

Exchange X12 and EDIFACT documents with partners and integrate them directly with your ERP.

More general questions about EDI are answered in the EDI FAQ.

Related transactions

Related healthcare and insurance documents

All 31 healthcare and insurance documents

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