What are the differences between 835 and 837 and why knowing matters

What are the differences between 835 and 837 and why knowing matters

How do you know your services and procedures are paid accurately according to payor contract terms?

Month after month, the question of net revenue and write-offs comes from the C-suite to the billing office and impacts all revenue cycle leaders along the way.

Before funneling data into reports, it's vital to know what 835 and 837 data are and what they aren't.

 What is the purpose of 835 and 837 data?

837 data is an electronic file containing patient claim information. 837 data is submitted to an insurance company or clearinghouse instead of sending a paper claim in the mail. In short, 837 data is how a claim is sent electronically.

An 835 is also known as an Electronic Remittance Advice (ERA). It is the electronic claim payment information and documents the electronic funds transfer (EFT).   The 835 data shows how the claim is paid or denied electronically.

When payments are posted with no reconciliation against charges or expected amount, a great deal of opportunity is lost.

How to use 835 and 837 data to ensure successful billing and receivables

At first glance, the 835 data may seem like an overwhelming source of information. However, by applying the appropriate tools to parse and examine the payment files, analysts can gain a wealth of knowledge from regularly tracking this data. Pairing the 835 remittance advice against the 837 claim data adds a dimension of clarity to compare what was submitted on a claim leading to the payment or denial by the insurer.

Creating a process for tracking and trending denials can serve as valuable diagnostic tools and a roadmap for where you need to go to improve your bottom line. These tools can become a checkup device on an ongoing basis enabling continuous process and financial improvements for your revenue cycle.

 What not to do with 835 data

Don't Assume: Regarding 835 data, do not assume "one size fits all" for parsing and analysis. 835 remittance data is not uniform across all payors, and during the parsing and data interpretation process, it is necessary to ensure that all fields are accurately read.

Don't Go Big: The analysis begins with asking for, obtaining, and effectively parsing the correct data. A good starting point is selecting your top 5 payors and concentrating on a finite period. Three months of your most current paid claims for your top payors can provide a wealth of information yet is manageable from a data processing and analysis perspective

Don't focus on what can't be changed: There will always be a subset of Zero Dollar Payments that are unavoidable. Perhaps these are charges for which no payments are available. You must filter these claims from your analysis to clarify the real opportunities.

What you can accomplish with 835 data

With 835 payment data, you can successfully achieve the following:

  • Analyze Payment Data
  • Identify Payment Trends
  • Target Areas for Performance Improvement
  • Identify Revenue Leakage
  • Illustrate Key Payment Indicators
  • Quantify Denials by Category & Reason Code
  • Isolate Payor Trends
  • Build Baseline and Roadmap for Improvements

But how? By identifying the appropriate process and indicators.

Payment Data and Key Indicators

The analysis process begins with classifying and validating your payor mix information and summarizing key elements: charge, payment, zero payment, and patient responsibility data to see if any payment variances, patterns, or other trends emerge.

835 Denials Analysis Process

The second part of the analysis focuses on those Zero Dollar Payments and the specific categorical areas where payment is incomplete: 835 Denials Analysis. The hundreds of claims adjustment reason codes organize into appropriate Claims Adjustment Denial Categories.

By measuring the changes in denials by category, you can pinpoint where denials have increased or decreased in dollar value and claim volume, as well as by payor and facility for a multi-hospital health system. This measurement is significant when comparing quarter-to-quarter or specific periods of payment. The level of detail garnered from the denials analysis forms the foundation for prioritizing performance improvement initiatives and achieving improvements in your bottom line.

Do You Need Help Reading 835 and 837 Transactions?

An 835 document may not automatically match up with a specific 837. It's common for multiple 835 transactions be used in response to a single 837 or one 835 to address multiple 837 submissions. It can be highly complex and challenging to manage. As a result, the 835 is essential for healthcare providers to help track received payments for services billed and provided.

With MedCom Solutions' professional services and ability to parse 835 & 837 raw data, we can dive into the detail of your 835 payment & 837 submission files to help you answer questions like:

  • What revenue cycle issues may be impeding accurate payments to your facility?
  • How do you measure and correct charge capture, coding, and billing process breakdowns?
  • Are you having any specific denial issues?
  • Is it time to reevaluate your payor contracts?

We create a report card of where you're performing well and where there is an opportunity for improvement. Also, develop a concise roadmap of where you need to go and what actions are required to achieve the most significant improvement to your bottom line. To ensure your hospital meets HIPAA 5010 requirements, no one else compares to MedCom Solutions.

Discover What’s Holding Your Organization Back with MedCom Solutions

MedCom’s consulting process and Chargemaster software solutions have saved hundreds of millions of dollars for healthcare organizations for the last 35 years.

Proven to reduce denials, enhance revenues and sustain results, MedCom specializes in OR Charge Optimization and 835 Payment & Denial Trending Analytics in addition to a variety of CDM Management and Charge Capture Services.

To learn more or to get started, visit our homepage or contact us today!

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