Health Care Claim: general definition, purposes and benefits coordination

Health Care ClaimHealth Care Claim 837 transaction is the EDI function that submits health care claim form to the Insurance Company of the patient whom has received care from a Provider of Service. The Health Care Claim form contains specific data related to the Patient, Provider of Service, Insurance Company, service codes and request for payment.

Health Care Claim purpose & scope

The purpose of the 837 transaction is to allow for 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. The Health Care Claim transaction is designed to allow a Provider of Service’s practice management software to create an HIPAA compliant file. The 837 file would be submitted to the Insurance Company for considerations of payment for services rendered. The practice management software would contain the patients demographic and policy information, procedure and diagnosis codes, and other pertinent clinical data needed for an 837 claim submission.

Health Care Claim coordination of benefits

Coordination of Benefits occurs when an insured member has more than one policy. It allows for multiple Providers of Insurance to make claim adjudication and payments from 837 transactions coupled with 835 data received from the Insurance Company. For example, Provider of Service submits an 837 claim to the primary Insurance Company. The claim would be adjudicated and benefits rendered to the Provider of Service. An 835 remit would accompany the payment from primary Insurance Company. The Provider of Service can then send an 837 claim to the secondary Insurance Company which will also contain 835 data from the primary Insurance Company. This allows the secondary Insurance Company to render benefits accordingly based on benefits already rendered for the same service. This can prevent overpayments on the same service. In summary here are typical steps to COB: Following the Provider-to-Payer-to-Provider model:

  • The provider sends the 837 to the primary payer.
  • The primary payer adjudicates the claim and sends an 835 Payment Advice to the provider. The 835 includes the claim adjustment reason code and/or remark code for the claim.
  • Upon receipt of the 835, the provider sends a second 837 with COB information populated in Loops 2320, 2330A-G, and/or 2430 to the secondary payer. The secondary payer adjudicates the claim and sends an 835 Payment Advice to the provider.

Health Care Claim bundling & unbundling

Bundling is a process that allows certain procedure codes, when filed together, to be combined into one procedure code during claims processing. This happens when multiple codes are submitted on a single claim that would be better represented by a single code. This is often driven also by the service location.

Unbundling allows certain procedure codes to be separated into multiple codes during claim processing. This happens when a single procedure code would be better represented by more than one code. Again, this is often driven by the service location.

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