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Electronic Claim Submission 101


There is a big push in the healthcare industry to get off paper transaction claims and switch to electronic data interchange (EDI) for claim submissions. In order to effectively bill claims to payers requiring electronic transactions, it’s important to find a software company that can support all specifications payers have in place for data elements in claim files.

HIPAA and Electronic Transaction Standards

The United States enacted the Healthcare Insurance Portability and Accountability Act (HIPAA) in 1996 to standardize the electronic exchange of patient-identifiable health information. The exchange of claim-related information is done via EDI, which transmits data from one computer system to another.

The data format in which these exchanges occur is mandated by the American National Standards Institute (ANSI). This not-for-profit organization implements the code structure to be used interchangeably through the various insurance payers in the United States. The ANSI designates the format version for healthcare EDI in the U.S. and requires all payers to use the current ASC X12 Version 5010.

National Transaction Standards for EDI

In healthcare, there are multiple transaction sets to standardize and support data transmission. The associated EDI claim submission transaction sets are as follows:

  • EDI Healthcare Claim Transaction Set (837) includes institutional claim transactions and professional claim transactions;
  • EDI Functional Acknowledgement Transaction Set (997/999) provides batch-level acceptance/rejection responses to the associated 837 set and claim batches inside the file;
  • EDI Healthcare Claim Status Notification (277) provides claim-level acceptance/rejection responses to the associated 837 set;
  • EDI Healthcare Claim Payment/Advice Transaction Set (835) provides the explanation of benefits related to the remittance advice for patients in the submitted 837(s) that were accepted and processed for adjudication.

Behind the Claims Approval Process

When a claim is submitted electronically, it goes through an intricate processing workflow involving multiple “check points” that it must pass through before being approved for adjudication by the payer. The method used to route the claim, either directly to the payer or through a clearinghouse or vendor, will determine how many processing “check points” the claim must go through before being adjudicated.

For a claim to be accepted into a payer’s system for adjudication, it must successfully pass the SNIP, the abbreviated name of the Workgroup for Electronic Data Interchange Strategic National Implementation Process (WEDI SNIP). SNIP validates EDI files to ensure they comply with HIPAA standards. The processing system will notify the submitter of successful or unsuccessful processing through the 999 batch-level response report or a 277 claim-level response report (if the payer supports the 277 claim-level response).

Axxess has an intelligent RCM platform that is designed to meet the industry’s requirements for EDI transactions and enable users to effectively manage their claims. Find more industry tips on the Axxess Resources page.

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