ASC X12 Version: 005010 | Transaction Set: 835 | TR3 ID: 005010X221
Example 7: Coordination of Benefits
Coordination of benefits is described in detail in the 005010X221 guide in section 188.8.131.52 (Secondary Claim Reporting Considerations). This response supplements those requirements and is not a replacement or contradiction of that section.
The 835's purpose is to allow the receiver to automatically post the remittance detail at either the claim or service line level. The governing principles are based upon the receiver's needs and the enabling of automation, rather than the sender's systems and their internal constraints. While this situation is frequently considered to be coordination of benefits, it also applies when the payer doesn't actually coordinate benefits. In all instances below, references to a prior payer also include instances where that prior payer is the same payer that had adjudicated the claim under a different coverage. The principles involved are based upon a provider receiving multiple claim payments (2100 loops) related to a single patient accounting record or event.
In the case of claims that involve multiple payers, the fact is that each claim received within an 835 transaction must account for 100% percent of the original submitted charge for the related services. Every claim reports the same original submitted charge, not just the unpaid balance. Each claim must report adjustments and payments for the claim that also account for 100% of the original submitted charges. Because the results reported by subsequent payers must include information from the prior payers in order to balance, care must be taken to ensure that amounts are not sent in a way that providers will post multiple times. Since the provider's system can only account for 100% of the original submitted charge it should be clear that the provider should not re-post amounts that were already reported by the prior payer(s).
When it comes to a secondary or later claim payment, items that have already been posted must not be re-posted to the provider's Accounts Receivable (AR). Reposting of prior payer payments or contractual adjustments would negatively impact the AR system (i.e., cause negative balances). To automate posting, those prior posted items must be identifiable to the system so that they can be handled appropriately as informational and not be posted to the AR. That is where Claim Adjustment Reason Code (CARC) 23 applies. CARC 23 currently has a description that reads "The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code OA)". The term "impact" in that description and within section 184.108.40.206 of the 835 TR3 is to be used to identify the payments and contractual reductions that have already been posted to the AR by the provider. This even applies when the secondary payer doesn't take into account what a prior payer actually adjudicated. It isn't about the payer or the payer's system or processes or contracts or business – it is about the provider's AR system, automation and posting.
It must be assumed that by sending prior adjudication detail to the subsequent payer(s), the provider has accepted and posted all previous information to the AR system.
As a result, we have a few guiding principles that apply when a payer is reporting a claim in an 835 transaction that another payer has already adjudicated:
- Report the total charge amount
- Do not repeat any contractual adjustments that the provider would have already posted to their AR
- Do not repeat any payment information that a provider would have already posted
- Include a CAS*OA*23 segment that includes the total of the above two bullets as the adjustment amount
- Report additional contractual adjustments that the provider needs to post to the AR in a CAS segment(s) with the appropriate CARC (not 23).
- Report remaining patient responsibility that the provider can bill to the patient or a subsequent payer in a CAS segment with the appropriate CARC representing the current payer's adjudication (not 23).
- Report additional payment that the provider needs to post to the AR
While 835 TR3 section 220.127.116.11 uses different terms to describe the reasoning, this is the same intended message.
The 835 TR3 identifies the 'how' using these four steps:
- Report the claim coverage amount or service allowed amount in the claim level AMT segment using qualifier AU (claim level) or B6 (service level) in AMT01.
- Report any adjustments related to patient responsibility where the patient is still responsible for the adjusted amount after coordination of benefits with the previous payer(s) using Claim Adjustment Group Code PR.
- Report any prior payer(s) payment and adjustment amounts other than patient responsibility that resulted from adjudication using Claim Adjustment Group Code OA and CARC 23.
- Report any additional contractual obligations, not previously reported by prior payer(s) that may remain after coordinating benefits with the other payer, using Claim Adjustment Group Code CO.
These steps would not apply to the first payer to adjudicate the claim.