Solutions for HealthCare EDI

HIPAA EDI 820 – Payment Remittance Advice

Imagine that you are a payer who wants to receive information on premium payment information from a state agency. How will you implement this and how will use utilize this information in your business scenarios. The HIPAAA EDI 820 Electronic Payment / Remittance Advice would be important to your organization.

When enacted in 1996, the Health Insurance Portability and Accountability Act (HIPAA) act specified twelve specific HIPAA standard transactions to be used in Health care. For the business scenario when a health plan sends premium payment information to another covered entity, HIPAA mandates that the ASC X12 820 Payment Order / Remittance Advice (RA) transaction be used. The implementation of the 820 in Health Care has been somewhat less than what was intended. Part of the reason for the less than enthusiastic implementation of this document was that it did not provide a major saving in costs (as opposed to the implementation of the electronic claim) or in business process improvement (as opposed to the implementation of electronic claims status, enrollment or patient eligibility) so it was not focused on. Additionally, other documents (such as the 835 Health Care Remittance Advice or paper reports) provide Payment information with extra details useful in the Health Care Claims Management cycle.  

The HIPAA EDI 820 Payment Order / Remittance Advice (RA) have three basic variations/uses in Health Care:   ·     

• Health Care Premium Payment - Reports premium payment financial information to the Managed Care Organizations (MCOs). The 820 transaction set allows the transmittal of premium payment and adjustment information in an electronic format to MCOs from Employers, TPA’s or Governments. The scope includes payroll deductions and Other Group Premium Payment for Insurance Products. ·     

• Health Care Claims Payments – This variation is used by payers to send Remittance information directly (or through the payer’s financial institution) to provider (or the provider’s financial institution).

• Specialized Reporting – In this variation, the 820 is used to report on specialized information. One example of this variation is in the use of Capitation Payments. In this scenario, Primary Care Providers/Case Managers can request electronic capitation reports from state funded programs. The 820 Capitation Payments transactions are combined with the last financial cycle of the month will accompany 835 Health Care Remittance Advice. This transaction is utilized for Premium Payment Remittance Information (PPRI). Total payment amount noted in the Transaction may or may not equal the actual payment amount. This is due to the integration of the premium payment with fee for service claims payment in the same weekly financial cycle.

 

More Information on Payment Remittance Solutions from SoftCare

Download the WhitePaper "HIPAA 820 Payment / Remittance Advice – Improving the Payment Cycle"

 

 

EDISoftware FileTransfer Software IntegrationTools  Portals SharedServices EHR Interoperabilty WhitePapers  HIPAA Home