EDI Unleashed – Series 7

We discussed EDI 835 message EDI in the previous blog, Now let’s look at EDI 820 transaction now.
The EDI 820 transaction deals with payments. It is used in conjunction with an electronic transfer of funds for payment of goods, insurance premiums or other transactions.

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

• Health Care Premium Payment – This 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 and 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.

The 820 EDI includes payer and payee identification, bank and account IDs, invoice number(s), adjustments from an invoice, billed and paid amounts. This information allows the suppliers and health plans to reconcile payments they receive against invoices they have issued.

This transaction set can be an order to a financial institution to make a payment to a payee. It can also be a remittance advice identifying the detail needed to perform cash application to the payee's accounts receivable system. The remittance advice can go directly from payer to payee, through a financial institution, or through a third party agent.

Key Segments which are a part of 820 message are as follows:

GS Functional Group Header
ST Transaction Set Header
BPR Beginning Segment for Payment Order/Remittance Advice
TRN Trace
REF Reference Identification
DTM Date/Time Reference
Nl Name
ENT Entity
RMR Remittance Advice Accounts Receivable Open Item
REF Reference Numbers
DTM Date/Time Reference
SE Transaction Set Trailer
GE Functional Group Trailer NM1: Insured’s Name
MIA: Provides claim-level data related to the adjudication of Medicare inpatient claims
MOA: To convey claim-level data related to the adjudication of Medicare claims not related to an inpatient setting
AMT: To indicate the total monetary amount

Segment ID Name
(Header)
ST Transaction Set Header
GS Function Group Header
BPR Beginning Segment for Payment Order/Remittance Advice
NTE Note/Special Instruction
TRN Trace
CUR Currency
REF Reference Identification
DTM Date/Time Reference
N1 Name
N2 Additional Name Information
N3 Address Information
N4 Geographic Location
PER Administrative Communications Contact
RDM Remittance delivery Method

(Detail)
ENT Entity
NM1 Individual or Organization Name
REF Reference Identification
PER Administrative Communications Contact
DTM Date/Time Reference
IT1 Baseline Item Data (Invoice)
RMR Remittance Advice Accounts Receivable Open Item Reference
NTE Note/Special Instruction

(Summary)
SE Transaction Set Trailer

We are now acquainted with the core EDI messages and significance of each. We will take a look at a couple of more healthcare EDI messages in the next blog. So stay tuned!