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How to Read an EDI 837 File

Reading Time: 7 Minutes
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837 File Format Guide

Today’s technology innovations allow for the rapid exchange of data all over the globe. In offices that offer patient services, safeguarding patient privacy is of the utmost importance. The 837 or EDI file is a HIPAA form used by healthcare suppliers and professionals to transmit healthcare claims.

Before delving deeper into the 837 form, it’s critical to understand what an EDI file is. EDI stands for the electronic data interchange. It’s the structured electronic process that all businesses, including the healthcare industry, use to transfer information to other companies electronically instead of using paper.

A variety of business forms are transmitted this way. The HIPAA form 837 is one of the more common forms in healthcare transmitted by EDI. Today, EDI is mandated by many large organizations, but it took years for this to happen.

EDI in Relation to Healthcare

Naturally, the healthcare industry processes extraordinarily high amounts of paperwork in the form of medical records, healthcare claims, reimbursements from health insurance, and more. Paper forms severely crippled these businesses because they wasted a lot of time.

The Health Insurance Portability and Accountability Act (HIPAA) further necessitated the standardization of forms and paperwork transmitted electronically.

EDI healthcare transactions are not performed by mail exchanges. Transmission is entirely electronic. Different transaction modes are point-to-point EDI, web-based-EDI, EDI via AS/2, EDI VAN, and mobile EDI.

HIPAA

The legislation was enacted in 1996 to address one specific issue: insurance coverage for people in between jobs. Without it, employees lost their insurance coverage while looking for a new job or waiting to start a new one.

Additionally, HIPAA was introduced to prevent fraud in the healthcare system and to make sure a patient’s medical information was secure and restricted to authorized individuals only.

Another benefit was that HIPAA helped the industry transition over to electronic healthcare records instead of paper ones. As a result, administrative functions of the healthcare system were streamlined, and efficiency improved.

All entities covered under HIPAA must use the same codes and standards to ensure consistency and uniformity as health information is transferred between various providers and insurance companies.

The patients benefit the most from this law because it makes sure every healthcare entity involved in the healing process implements systems to protect sensitive patient information. No one in the industry wants to expose confidential information or have it stolen from their computer systems, however without HIPAA the healthcare industry would not be required to safeguard this information since there would be no repercussions.

After HIPAA, strict security measures were implemented in the medical industry, and patients now have the right to control who their information is shared with or released to. This allows them to take an active role in their medical care.

The 837 File

So, what is an 837 file? Basically, it’s an electronic file that contains information about a patient claims. This form is submitted to a clearinghouse or insurance company instead of a paper claim. Claim information includes the following data for one encounter between a provider and a patient:

  • A patient description
  • The condition that the patient was treated for.
  • The services that were provided.
  • How much the treatment cost.

Formats for the 837

After March 31, 2012, version 5010 HIPAA standards took effect and divided the form into three groups.

  • 837 D – for dental practices
  • 837P– for professionals
  • 837I– for institutions

These forms are sent by patient providers to payers such as HMOs or health maintenance organizations, PPOs or preferred provider organizations, or government agencies like Medicaid and Medicare. They are either sent directly to the agency or through clearinghouses. Information on coordinated benefits and payments are sent back to providers using the 835 file.

The EDI 837 specification transaction set is comprised of the format and establishes the information contents of the 837 for use within the EDI environment. This transaction set is used to transmit billing information for healthcare claims, information on the encounter, or both from providers to payers.

It can also be used to submit claims and billing payment data between payers that have different responsibilities for payment where benefits must be coordinated between regulatory agencies and payers.

Loops, Elements, and Segments

837 files are separated into segments, loops, and elements. Each one of these contains specific data:

  • The Header– This is the first part of the file.
  • Details on the Billing Provider
  • Subscriber Details
  • Details about the Patient
  • Claim Details
  • Ending Trailer– This is where the file ends.

Loops

A loop is a section or block of the EDI file, and each loop contains multiple segments which include elements and sub-elements. While they are the largest component of the EDI, loops are usually the most difficult to distinguish. Normally, they begin with an NM or HL segment.

There are multiple types of loops, but they are all broken into five primary sections:

  • 2000A- Billing Provider
  • 2000B- Subscriber
  • 2000C- Client, though this is only on the form if it’s different than the subscriber.
  • 2300- Claim Information
  • 2400- Service Line Information

Segments

Each segment is separated on its own line making it easier to read the file. Also, each line ends with a (~) or tilde. The tilde is known as the Segment Separator. A Segment Identifier Code is located before each segment. Here are some common codes that you may see:

  • SV1- Service
  • PRV- Provider
  • LX- Line
  • SBR- Subscriber
  • CLM- Claim
  • HL- Hierarchy
  • REF- Reference
  • NM1- Name
  • DMG- Demographic
  • N3- Street Address
  • N4- City, State, and Zip code
  • DTP- Date

Elements

Data elements have the same claim information that prints on the paper forms. You’ll notice several asterisks (*) in each segment. These asterisks are Element Separators. There are also sub-elements that are separated using colons (:). Multiple colons and asterisks side-by-side means that the sub-element or element is empty. Here are some common Element Identifier Codes:

  • ABF- Diagnosis
  • 41- Claim Creator (Hardcoded to EI Assistant)
  • ABK- Principal Diagnosis
  • 40- Claim Receiver
  • HC- Standard CPT Code
  • 85- Bill Provider
  • Y4- Claim Casualty Number
  • 82- Rendering Provider
  • XX- NPI
  • DN- Referring Provider
  • EI- EIN or Tax ID
  • IC- Information Contact
  • SY- Social Security Number
  • 472- Date of Service
  • 77- Service Location

Sub-elements use single digit numbers, and elements use two-digits. When sub-elements and elements are referenced, they are attached to a Segment Identifier Code. For example, Loop 2300, HI02-1 where HI is the Segment Identifier Code, 02 is the element, and 1 represents the sub-element.

Information on Implementation Guides

Each 837 format has its own guide that defines how the file is structured and the content of each one. Different payers and clearinghouses require that specific data is populated in certain segments. Information on those requirements is located in the payer/clearinghouse companion guides.

Separating Data to Make it Easier to Read

Microsoft Word has a tool called a macro that can separate the information in the 837 data file to make it easier to read. You only need to set it up once, and it works on the export modes for all three of the 837 forms.

How the 837 File is Related to the CMS 1500 Form

The 837 file is the standard form for electronically transmitting healthcare claims while the CMS-1500 is the paper form used to bill Medicare Fee For Service businesses. Both of these forms are suitable to file bills with some private and governmental agencies, but most require the 837 file.

The CMS-1500 form is specifically for medical providers that are non-institutional. Durable medical equipment providers accept these forms to waive electronic claims as well.

Additional Factors to Consider

EDI files have certainly benefited many healthcare agencies. While these messages seem complicated, once you’re familiar with their formatting, reading them becomes easier.

When implementing these systems at your facility, you should consider the compliance and security level that the system offers as well as how easy integration is. However, the system you choose to use should also provide an organized structure for the raw data behind it.

A robust, data-centric management solution should provide the highest security and compliance possible to safeguard against data breaches and human error. Nothing is more important than keeping your patients’ sensitive information safe. At Apex EDI, we take patient security very seriously and ensure your patient data is encrypted and safe.

Healthcare EDI is predicted to reach $1,681.1 million by the end of 2018. EDI has numerous advantages such as security, standardization, cost savings, faster processing, and improved productivity. EDI systems speed up the benefits and claims process significantly. Standardization made healthcare information exchanges more compliant, organized, and accurate.

Productivity is improved for more efficiency, speed, and better accuracy. EDI minimizes human error because human intervention is limited. There are fewer shipping errors, manual data errors, and errors with billing addresses.

Both healthcare payers and providers have seen fewer requests for reworking claims and denials. Another nice benefit of these systems is that they make it possible to transmit multiple buyer transactions at one time.

Start utilizing these benefits by enrolling for electronic claims processing through Apex EDI.

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