835 billing scenarios examples
835 billing scenarios describe what meaning and purpose can 835 transaction bring to the receiver. The 835 (similar to the 820) can be transmitted from the payer just as a remittance advice (and EOB explanation of benefits) letting the provider know what is being paid. It can also be transmitted as an EFT (Electronic Funds Transfer) request to the bank. The 835 can also be combined with an EFT and a remittance advice in one document. Another option is to send the 835 Remittance Advice with no money moving at all and it will only serve the purpose of Explanation of Benefits.
835 – Non-Payment – Notification Only
In this 835 billing scenario the transaction is transmitted from the payer to the provider. In this case there no information about money transfer is being transmitted. The BPR-01 in this case equals “H” for Notification Only and BPR-04 = “NON” for “Non-Payment Data”
835 – Check Payment and Remittance Advice
In this scenario the 835 is transmitted from the payer to the provider. The payment was made by check and the 835 serves as a remittance advice/EOB:
For this type of payment BPR-01 equals “I” for “Remittance Information Only” and BPR-04 equals “CHK” for “Check”. The check number (in TRN-02) is a key ID used to re-associate the payment with the Remittance Advice.
835 – EFT Payment and a separate 835 sent to Provider
In this 835 billing scenario the Payer sends one 835 EFT request with BRP-01 equal to ‘D’ to the Bank, and a second 835 directly to the Provider with BPR-01 equal to “I” for Remittance Information Only. The Payer’s Bank transfers funds to Payee’s Bank via ACH.
835 – EFT Payment and Remittance Advice (All-In-One)
In this scenario the Payer sends one 835 EFT request with BRP-01 equal to ‘C’ which means “Payment Accompanies Remittance Advice”: The payer sends an 835 with an EFT request to transfer funds from the Payer’s bank to the Payee’s bank (account numbers and routing numbers are specified in the BPR segment). The Payer’s bank transfers funds to the Payee’s bank using ACH/EFT and also sends the bank a copy of the 835. Payee’s bank makes a deposit into the Payee’s account and sends the Payee a copy of the 835.
835 – Pre-notification of Future Funds
In this scenario the Payer sends the 835 with BRP-01 equal to ‘P’ and it’s used to simply do a connectivity test of account numbers. The payer sends this to the bank when a new provider is brought on board for EFT, simply to validate routing numbers and account numbers.
835 – Split Payment and Remittance
In this scenario the Payer sends one 835 with BRP-01 equal to ‘U’ and it’s usually sent from the Payer to a clearing house, hence giving the clearing house instructions to split EFT and remittance information and send them separately, one to the bank the other one to the provider.
835 – Split Payment and Remittance Optional
In this scenario the Payer sends one 835 with BRP-01 equal to ‘X’ and it’s usually sent from the Payer to a clearing house, hence giving the clearing house the option to split EFT and remittance information and send them separately, one to the bank the other one to the provider. This is a good option if providers don’t’ have capabilities to receive 835s, the payers can send the 835s to the clearing house and the clearing house will take it from there.