Healthcare office utilizing 837 files to improve billing efficiency and accuracy.

The Significance of the 837 File in Billing and Payment Processes

The digital era promises to boost service quality and improve patient experiences. It also promises to relieve staff from tedious data entry and manual tasks. 

837 files in healthcare play a central role in streamlining the claims procedure, ensuring fast and accurate reimbursement. 

In this article, we’ll explain what an 837 file is and why it’s important in the billing process. We’ll also look at its role in medical billing. 

Then, we’ll shine a light on CollaborateMD’s time-saving batch import feature. Finally, we’ll wrap up with three quick tips for making the most of 837 files in your practice. 

What Is an 837 File?

An 837 file is a type of HIPAA-compliant electronic document used in healthcare. It’s essentially a digital alternative to paper forms for healthcare claims. 

The documents are sent for approval or denial to payers like insurance companies, clearinghouses, and government agencies  

Clearinghouses act as intermediaries. They check the data’s formatting before sending the file on to insurance companies. 

837 files are different from HL7 file imports. Health Level 7 (HL7) is a set of standards that govern the exchange of health information. 837 files are specific to healthcare claims. 

An 837 file contains several key pieces of information: 

  • Details about the patient receiving treatment 
  • What the patient was treated for 
  • The medical services given to the patient 
  • How much those services cost 
  • The total amount being claimed from the insurance 

This information is structured in loops, elements, and segments. 

Loops are the largest sections. They organize information about things like the billing provider and client. 

Loops are divided into segments, which are individual lines of data. You can identify these by code (for example, NM1 for name, PRV for provider, and CLM for claim). 

Each segment is made up of elements, the most granular data points in the file. Some elements have sub-elements, which are delineated by an asterisk (*) or colon (:). 

Elements include ABK for the primary diagnosis, 472 for the date of service, and 77 for the service location. 

This standardized structure allows healthcare providers and payers to communicate clearly and efficiently. Information is accurate, complete, and formatted correctly. 

837 files play an important role in healthcare transactions. They enable providers to submit claims electronically while maintaining security and privacy standards. 

This means faster reimbursement, less administrative overhead, and fewer claims processing errors. 

In addition, staff can submit several claims at once. This further optimizes transactions, supporting the financial health of the practice. 

RELATED ARTICLE: 5 Characteristics to Look for in a Medical Billing Company 

Healthcare provider inputting billing information into an 837 file format.

What Is the Importance of the 837 File in Billing Processes?

The 837 file ensures all parties involved in the billing process have the information needed to quickly and accurately process claims. Let’s take a closer look at the value of the 837 file. 

Optimized Billing Processes

The 837 file makes the billing process smoother and more reliable. 

How? For one, it creates a common language for claims. Whoever’s system receives the data—be it that of a small insurance company or large government agency like Medicare or Medicaid—can understand and process it. 

The result is fewer errors and maximum revenue capture: 

  • A standardized structure means there’s less room for mistakes in how information is presented and understood. Fewer claims are rejected or denied, and that means medical practices get reimbursed faster. 
  • By decreasing the number of error-related rejections, practices experience better revenue capture. The services provided are more likely to be paid for on time and in full. 

Accurate Claims Submission

In addition to the standardized structure, tools like medical billing software and electronic health record (EHR) systems allow teams to check 837 files for mistakes before they are submitted. 

Locating and fixing errors early prevents late or incomplete payments. 

Insurance companies also have strict deadlines for when claims can be submitted. Errors can lead to delays and missed opportunities. Accurate claims submissions keep the billing cycle on schedule. 

RELATED ARTICLE: How to Increase Your Clean Claim Rate and Why It Matters 

Compliance with HIPAA

HIPAA’s electronic data interchange (EDI) rule requires covered entities to follow strict specifications when exchanging information electronically. 

This rule defines the type of information that can be shared and the structure it must follow. The aim is to ensure all electronic transactions maintain a consistent level of security. 

837 files are designed to be HIPAA compliant. So, when a healthcare provider uses them, they can rest easy knowing their organization and patients are protected. 

Streamlined Reimbursement Procedures

Healthcare providers deliver a service. Then, they bill a payer, either an insurance company or the government. The payer reimburses the provider. 

Generally, this procedure follows a fee-for-service model, where each service has a price. The services are identified by a unique code. 

The code used on the billing documentation must be correct. If it’s not, payments can be delayed and, in some cases, not made in full. 

837 files protect providers from these outcomes. 837 files reduce manual errors and speed up the claims submission process. 

837 File’s Role in the Payment Processes 

How might the 837 file look as part of your payment process? Let’s break it down. 

Step 1: Transmission of Claims to Payers

First, you prepare an 837 file. The file includes all the details about the services provided. This includes treatments, patient information, and costs. 

Then, you send it electronically to the insurance company or other payer. Or you may use clearinghouse services. 

Clearinghouse services for medical practices look at the data and its formatting. Any errors or issues will result in an alert. This offers you the chance to edit the information before transmitting the claim, helping avoid delays later. 

Step 2: Verification and Adjudication by Payers

When the payer receives the 837 file, they review it. This process is called adjudication. 

They verify the data is accurate. They also confirm that the services align with what’s covered under the patient’s plan. 

Then, the payer makes a decision. They either approve the claim and decide to pay it, deny the claim, or send a request for more information. 

RELATED ARTICLE: 5 Reasons for Insurance Claim Denials & How RCM Services Can Help 

Step 3: Payment Posting

If the payer approves the claim, they send an electronic remittance advice (ERA). This document details how much they’ll pay. It also explains any differences from the amount you billed. 

This information helps with payment posting to ensure quick reimbursement. 

The process is as follows: 

  1. You update your billing system using the ERA. 
  2. Payments are matched with claims. You can see which have been paid in full, which require funds from patients, which have been denied, and which still need action. 
  3. If there’s any additional money owed, you can send bills to patients. 
  4. When patients pay, their payments are also recorded against what they owe. 

Payment posting helps you track who has paid and how much. 

Integration with Electronic Health Record (EHR) Systems

Many EHR systems can create 837 files directly from the patient’s record. This further optimizes the three-step process above. 

Here are some of the benefits of integration: 

  • Fewer Errors. 837 files use existing information. This reduces the risk of inconsistencies. 
  • Less Manual Work. Integration with the right software can automate steps in the payment process. The system can send 837 files, receive ERAs, and update patient records. 
  • Reduced Risk. Healthcare is always evolving, but EHR systems keep up. You can operate knowing your 837 files include the latest codes and adhere to new rules. 

FROM ONE OF OUR PARTNERS: How the Right EHR Can Save Your Practice Money 

Medical billing specialist reviewing an 837 file for claim submission.

CollaborateMD Offers Claim 837 Import

Healthcare payments and insurance claim billing can be complex. But with the right system, you can ensure compliance, accuracy, and fast reimbursement. 

CollaborateMD (CMD) integrates seamlessly with your EHR system, saving you time and resources. Even better, it offers an import feature for 837 files. 

Here’s how it works: 

Through the Interface Import feature, CMD allows your healthcare staff to batch import 837 files into your EHR system. They can create multiple claims at once and upload them together instead of entering each one manually. 

The ability to submit batch 837 file claims greatly impacts both time and cost efficiency for medical practices. 

  • Time Savings. Manual and individual claim input is time-consuming. Research suggests primary care providers spend more time on paperwork than with patients.  
    For every four hours doctors spend with patients, they spend five on administrative tasks. With CMD, claims data generated during patient encounters can transition into billable claims without additional data entry effort. 
  • Cost Savings. CMD’s batch import feature reduces the reliance on insurance billing services for medical practices. It also eliminates the need for a large billing team focused on manual data entry.  

3 Tips to Get the Most Out of 837 Files

The 837 file is central to a streamlined and compliant billing process. To help your medical practice get the most out of them, follow these three tips: 

  • Double-Check Before Sending. Always review 837 files for errors before transmission. This can prevent delays and rejections. Find out if your EHR or medical billing software can check for errors automatically. 
  • Stay Updated on Codes. Medical codes change often. Make sure you’re using the latest codes to avoid claim issues and delays. 
  • Use EHR Features. Utilizing an EHR capable of extracting 837 files from patient records is crucial. Moreover, collaborating with a practice management or billing solution providing claim and code scrubbing upfront can lead to submitting cleaner claims successfully on the initial attempt. 



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