EDI 835 Health Care Claim Payment/Advice (ERA)

The EDI 835 is the explanation behind every health care payment. A deposit lands in the practice's account for $4,812.37. The 835 says which claims that money covers, why each one paid less than billed, what the patient owes, and what the payer took back from earlier overpayments. Billing teams post payments from it, work denials from it and bill patients from it, so reading CAS segments correctly is a core billing skill.

This guide covers the 835's structure, every segment billing and health IT teams read, the claim adjustment group codes and reason codes, how the file balances, how to match an 835 claim back to the 837 that billed it, and a live example with a payment, a denial and a takeback. It explains the file format only. It is not billing, coding or legal advice; the payer's companion guide and your contracts govern how amounts are calculated.

What Is an EDI 835?

An EDI 835 is the Health Care Claim Payment/Advice transaction set defined by ASC X12, used by a health plan to send payment information and an explanation of each claim's adjudication to a provider or its billing agent. It is the HIPAA standard for health care remittance advice. 45 CFR 162.1602 names the X12 technical report 005010X221, and files carry the errata version 005010X221A1 in GS08 and ST03. The same section names the NACHA CCD+ format for the health care EFT that moves the money, with the 835's TRN reassociation trace number in the addenda record.

Authoritative references for 835 work:

• 45 CFR Part 162, administered by CMS, lists the HIPAA transaction standards, including the 835 and the EFT standard
• X12's claim adjustment group codes, claim adjustment reason codes (CARC) and remittance advice remark codes (RARC) are the external code lists every CAS and LQ segment draws from. X12 publishes all three; its code list index shows the RARC list as maintained by CMS
• The CMS Medicare 835 companion guide shows how one large payer fills each element, including which codes Medicare does not use

Who sends it? The health plan, or a clearinghouse or payment vendor acting for it.

Who receives it? The payee named in loop 1000B: the provider, or a billing service or clearinghouse acting for it. Providers usually enroll for ERA with each payer before 835s start flowing.

When is it sent? With each payment cycle, alongside the EFT or check. One 835 covers one payment (or one notification) to one payee.

Why does it matter? The 835 is what posts payments, sets patient balances and starts denial follow-up. Misreading a CAS group code means billing a patient for an amount the provider was supposed to write off, or writing off an amount the patient actually owes.

How Claim Payment and Remittance Works

1. Provider bills. The provider sends an 837 claim. CLM01 carries its patient control number.
2. Payer acknowledges. A 999 confirms the file passed validation, and a 277CA claim acknowledgment says which claims were accepted into adjudication.
3. Payer adjudicates. Each line is priced against the contract or fee schedule, benefits are applied (deductible, coinsurance, copay), and edits run.
4. Payer pays and explains. The money moves by EFT (or check), and the 835 explains it. TRN02 in the 835 matches the trace number in the EFT addenda so the two can be reassociated.
5. Provider posts. The billing system matches each CLP01 back to the claim, posts payments and adjustments, moves patient responsibility to the patient's account, and queues denials.
6. Follow-up. Denied or underpaid claims are corrected and resent as replacement 837s, or appealed. Status questions in between go out as 276 claim status requests and come back as 277 responses.

Interactive Example: Payment, Denial and Takeback

A fictional health plan pays a fictional family practice for two claims and recovers an earlier overpayment:

• Claim EFP26110301 (office visit plus rapid strep test, billed $160.00) is processed as primary. Each line is reduced to the contracted rate (CO-45) and the patient owes a $25.00 copay (PR-3). The plan pays $85.00.
• Claim EFP26110288 (billed $95.00) is denied with CO-204 (service not covered under the patient's current benefit plan) and remark N130.
• A PLB segment recovers a $40.00 overpayment on an earlier claim (WO).
• The check is for $85.00 minus $40.00 = $45.00.

The first claim's CLP01 matches CLM01 on the 837P sample in our 837 guide. All people, providers and IDs are fictional; NPI 1999999992 is a check-digit-valid test value.

835 Structure at a Glance

Key Segments Explained

BPR: Financial Information

BPR*I*45*C*CHK************20261120~

TRN: Reassociation Trace Number

TRN*1*CHK00412877*1990000001~

TRN02 is the check number or EFT trace number. It is the key that joins the 835 to the deposit on your bank statement. TRN03 identifies the payer; the TR3 has it as a 1 followed by the payer's tax ID. When an EFT arrives without its 835 (or the other way round), matching TRN02 to the trace number in the bank's CCD+ addenda is how the two are reassociated.

N1: Payer (1000A) and Payee (1000B)

N1*PR*SAMPLEVILLE HEALTH PLAN~
N1*PE*EXAMPLE FAMILY PRACTICE*XX*1999999992~

PR is the payer and PE the payee. The payee is normally identified by NPI (XX), with the tax ID in a following REF*TJ. The payer also sends a PER segment with its technical (BL) contact for EDI questions.

CLP: Claim Payment Information

CLP*EFP26110301*1*160*85*25*12*SHP2611190001*11*1~

CAS: Claim Adjustment

CAS explains every difference between what was billed and what was paid. It appears at claim level (loop 2100) and service line level (loop 2110).

CAS*CO*45*33~
CAS*PR*3*25~

One CAS segment holds up to six reason/amount/quantity sets that share a group code. A second group code needs a second CAS segment.

SVC: Service Payment Information

SVC*HC:99213*125*67~
DTM*472*20261103~
CAS*CO*45*33~
CAS*PR*3*25~
AMT*B6*92~

AMT*B6 gives the allowed amount for the line. If the payer adjudicated a different procedure or units than you billed, SVC06 and SVC07 show what you originally sent, which is how you spot recoding.

LQ: Remark Codes

LQ*HE*N130~

LQ01 = HE marks a remittance advice remark code (RARC) in LQ02. RARCs add detail to a CARC, or carry an informational alert. Some CARCs, such as 16 and 96, carry a usage note in the X12 list saying a remark code must accompany them. Claim-level remark codes go in MIA (inpatient) or MOA (outpatient) instead.

PLB: Provider Level Adjustment

PLB*1999999992*20261231*WO:EFP26100917*40~

Common PLB reason codes include WO (overpayment recovery), L6 (interest owed), FB (forwarding balance), 72 (authorized return) and J1 (nonreimbursable). PLB adjustments are not tied to any claim in the same 835, so they are easy to miss during posting and are a common reason a deposit "does not match" the claims.

Claim Adjustment Group Codes: CO, PR, OA, PI

The group code is the first thing to read on any CAS segment, because it says who carries the amount. X12 publishes four group codes.

Not every payer uses all four. The CMS Medicare companion guide limits Medicare contractors to CO, OA and PR. Whether a provider may bill a patient for any adjusted amount is set by its contracts and applicable law, not by the 835 format.

Claim Adjustment Reason Codes (CARC) and Remark Codes (RARC)

CARCs explain why an amount was adjusted; RARCs add detail. Both lists are updated on a regular cycle, and codes are added, revised and deactivated with start and stop dates, so your billing system should load them from the published lists rather than hard-coding descriptions. A few CARCs you will see constantly:

A few RARCs that often travel with them:

The "typical group" column reflects common usage, not a rule. The group code on the actual CAS segment is what counts, and the X12 list itself restricts some pairings (for example, its note on CARC 18).

How an 835 Balances

The 835 is built to balance at three levels. A file that does not balance is a payer error worth raising, and a posting that does not balance is usually a missed PLB or CAS.

The transaction rule comes straight from the TR3, which X12 quotes in its published interpretation on PLB amounts: the sum of all claim payments minus the sum of all provider-level adjustments equals the total payment amount.

Matching the 835 Back to the 837

Posting depends on finding the claim each CLP refers to. The identifiers that tie the two together:

A few cases break naive matching:

• Reversals and corrections. A payer that reprocesses a claim may send a reversal (CLP02 = 22, amounts negated) and the corrected claim in the same or a later 835. Post both.
• Split claims. A payer may split one 837 claim into several CLPs with the same CLP01. Match on CLP01 plus CLP07.
• Forwarded claims. CLP02 values 19 to 21 and 23 mean the payer forwarded the claim to another payer; expect a second 835 from that payer.

Where the 835 Sits in the Claim Cycle

Common 835 Problems and How to Handle Them

835 Implementation Checklist

• Enroll for ERA (and EFT) with each payer, and note which clearinghouse or payee ID will receive the 835
• Get each payer's 835 companion guide and confirm 005010X221A1
• Confirm your billing system loads current CARC and RARC lists
• Map group codes to posting actions: CO write-off, PR patient balance, OA and PI by reason
• Post PLB adjustments separately, with their reason codes and references
• Set up reassociation between 835s and deposits on TRN02
• Keep CLM01 unique on outbound 837s so CLP01 always finds one claim
• Send line item control numbers (REF*6R) on 837 lines if you want line-level matching
• Build a denial work queue keyed on CARC, RARC and payer
• Monitor for 835s that do not balance and raise them with the payer

Reading 835 Files With OrderSync's Free Inspector

When a remittance does not match the deposit or a denial makes no sense, start with the raw file. Paste any X12 file into the free EDI inspector to see the payment, each claim, every service line and CAS adjustment broken out segment by segment, with control-number and segment-count problems flagged. It runs in your browser and needs no signup. Use sample files, or files with patient data removed, when you are trying it out. The same files can be converted with the EDI to JSON converter, and our EDI document types reference covers how the 835 fits among other X12 transactions.

Frequently Asked Questions