Capital Deep Dive: Claims and Remittance Files
Updated: Jan 7, 2022
In its simplest form, in order to get paid for their services, providers send files of patient encounter information to insurance companies and eventually receive a file back as a response.
But what are the different files? Where do they come from? We're going to break down the different claim forms and their origins so you have all the knowledge you need to become an expert.
Generally speaking, providers will either be billing professional claims or institutional claims.* In industry terms, Professional Billing (PB) typically leads to billing a professional claim, and Hospital Billing (HB) typically leads to billing an institutional claim.**
Professional Billing (PB) encompasses billing for work performed by physicians, suppliers, and other non-institutional providers for both outpatient and inpatient services.
Hospital Billing (HB), also referred to as Institutional Billing, encompasses billing for services rendered in hospitals, skilled nursing facilities, and other institutions for outpatient and inpatient services.
Furthermore, it includes the use of equipment and supplies, laboratory services, radiology services, and other charges.
*Note: There also exist dental claims, though many providers simply bill for dental services on professional claims.
**Note: There are some scenarios where a provider may bill on the opposite claim form (e.g., PB charges on an HB claim and vice versa), or even where they must bill some services on one claim and the rest on the other. Such scenarios are uncommon and won’t be the focus of this article.
Electronic and Paper Claims
When billing to insurance, a provider will either send the claim electronically or physically on paper, which necessitates different claim forms. Electronic claims are called 837s.
For Professional Billing, an electronic claim is called an 837p (“p” for professional), and the paper claim form is referred to as a CMS-1500.
For Hospital Billing, an electronic claim is called an 837i ("i" for "institutional"), and the paper claim form is referred to as a UB-04.
Note that there are other types of billing that occur, such as Home Health and Hospice which primarily utilizes an 837I or UB-04, or Dental Billing, which can utilize an 837d or CMS-1500 claim.
Claim Form Origins
Many years ago, when the federal government wrote HIPAA into law, they also issued administrative requirements for transmitting data as standardized “transactions.” This is where the American National Standards Institute (ANSI) comes in.
ANSI, and more specifically their subsidiary organization X12, are the Accredited Standards Committee (ASC) responsible for developing, maintaining, and documenting these transactions. In essence, X12 created the modern-day claim form, since over 95% of claims are sent electronically.
These standard "transactions" are referred to as Transaction Sets, or for example, the 837p and 837i files previously mentioned.
These Transaction Sets are then accepted by HIPAA as the standard for healthcare data interchange, and as the standards change over time, new versions are released. Currently, we're on version 5010, whereas 10 years ago, almost everyone used version 4010.
So, understanding the interaction between ANSI, X12, and HIPAA, if you wanted to write out a claim file in all its technical glory, you would call it an:
"ANSI ASC X12N 5010 837P" for a professional claim.
" ANSI ASC X12N 5010 837I" for an institutional claim.
You can see in that name it references each portion of the parties in play.
If you really wanted to get technical, you could notate it like "005010X223A3" where the version number (005010), the X12 cross-industry identifier (X223) and the errata version (A3) are all present, but we won't go into those pieces today.
Remittance deserves its own post, so stay in touch with us so you don't miss out. To keep it high level in the meantime, know that after the 837P or 837I is sent out and adjudicated by the payer, they will send back a different transaction set: the 835 file. This file contains the payer's responses to the claim including what they are and aren't paying, and certain codes indicating why.
Additionally, outside of Claims and Remittance, there are a handful of other transaction sets (that we will also break down later) used to relay information between providers and payers.