837 Transaction sending by a third-party provider
837 Transaction allows claims to be submitted from Professional, Institutional or Dental Provider of Service in a standard format mandated by the Department of Health and Human Services. As we mentioned in our previous posts, 837 Transaction is designed to allow a Provider of Service’s practice management software to create an HIPAA compliant file. Health Care 837 Transaction form contains specific data related to the Patient, Provider of Service, Insurance Company, service codes and request for payment. Today we speak about Direct Submission and Third Party option for 837 Transaction.
A Provider of Service can choose to send their 837 Claim transaction a Billing Agent, Clearing House or other Third Party vendor to forward to the Insurance Company. This gives the Provider of Service a “one stop shop” for 837 Claim transactions that ultimately will be received by many different Insurance Companies. The Third Party vendor will receive the 837 Claim submissions and divide that transaction into smaller ones to deliver to the appropriate Insurance Company. An example would be a Provider of Service sends a single 837 Claim transaction containing 100 claims to their Third Part Vendor. Of the 100 claims, 30 are for Insurance Company A and 70 are for Insurance Company B. The Third Party vendor would receive the 100 claims and then forward the 30 claims for Insurance Company A in one file and the 70 claims for Insurance Company B in one file.
Providers of Service also can utilize Billing Agents, Clearing Houses or other Third Party vendors to send 837 Claim transactions even if the Provider of Service is unable to create the file. A Third Party Vendor can convert a Provider of Service’s proprietary formatted claims to a compliant 837 as well as submit the request to the Insurance Company.
Interested in EDI education? Sign up for vendor-independent trainings in your region.