270, 271 Healthcare Eligibility, Coverage and Benefit Inquiry (270) and Response (271) EDI Transaction Definition
270, 271 Healthcare transactions, their relationship, functions and purposes will be described further in the post.
The 270 transaction is the EDI function that requests eligibility and benefit information from the Insurance Company of the patient. It is set to receive care from a Provider of Service. The 271 transaction is the EDI function that responds eligibility and benefit information of the patient. It is set to receive care, from the Insurance Company to the Provider of Service.
270, 271 healthcare eligibility details should be loaded to patients schedule. It is done to receive services from a Provider of Service prior to care being rendered. The practice management software should reconcile 271 Responses to patients who have appointments and correlate with the patients identifying information, co-pays and deductibles for accounts receivable.
270, 271 healthcare transactions background information
A patient’s eligibility is one of the driving elements in the healthcare industry. The amount of coverage and level of benefits are determined by a patient’s eligibility with an Insurance Company. A patient’s eligibility also directly impacts the amount of payment for services. Historically a patient’s eligibility was verified via a phone conversation. These conversations are often limited to a “Yes/No” response of eligibility. There is a limited exchange of what the coverage and benefits detail. The adoption of the Healthcare Eligibility, Coverage and Benefit Inquiry (270) and Response (271) transactions allow for a Provider of Service to obtain an in-depth detail of coverage, benefit and eligibility from the patient’s Insurance Company. The 270 Inquiry and 271 Response also leverage system automation allowing to spend less on manual process.
270, 271 healthcare transactions purpose & relationship
The 270 Request is initiated by the Provider of Service. The 270 contains patient data in which eligibility detail is being requested from the Insurance Companies.
The purpose of the 270 transaction is to allow Providers of Service an automated capability of requesting detailed eligibility information from a patient’s Insurance Company. The 270 transaction allows a Provider of Service’s practice management software to create a HIPAA compliant file. The file is requesting eligibility details of a patient’s benefit scheduled of service to be received. The practice management software would contain service dates of patients, their identifying information and service coding specific to the type of service received. All able to be verified with a 270 Request.
The 271 Response is directly related to a 270 Request. The 271 transaction is designed to allow an Insurance Company to automate uniformed eligibility and benefit responses with as much detailed information as was received in the original 270 Request.
Indirectly, the 270 Request and the proper use of the 271 Response information will reduce possible 837 claim rejections and 835 remittance advice denials for ‘non-eligible member’ or ‘non-eligible service’. Properly verified eligibility ensures that claim processing and accurate benefit provisions are received.
270, 271 healthcare transactions usage frequencies
The eligibility 270 Request and 271 Response is the third most utilized transactions in the healthcare industry, after claims submission and remittance advice transactions. Mandates from the Department of Health and Human Services requiring claim and remittance adoption were contributing factors to claim and remit transaction levels less the 270/271 could be the predominate healthcare EDI transaction. Before the 270/271 transactions were adopted, most eligibility verification was handled over the phone. Since the Healthcare 270/271 has been made a standard industry wide, Providers of Service can send the 270 Request to all Insurance Companies and expect to receive the same uniformed 271 Response format across the board.
Most Insurance Companies also have some method of web based eligibility verification. However, web based eligibility is driven for checks done at the point of service. Also, most web based eligibility verification does not support a batch method or provide a greater detail of benefits as the 271 Request. More information about common healthcare EDI transaction is provided at EDI Academy HIPAA seminars and trainings.