To facilitate electronic billing for workers’ comp, California requires claims administrators to confirm receipt of provider e-bills with a standardized electronic acknowledgement.

Claims administrators must send providers an ANSI X12 277 Acknowledgement within two working days of receiving an e-bill. This important ‘277 ACK’ means claims administrators can never plausibly claim an e-bill is “lost in the cloud.”

However, with the exception of CorVel, claims administrators lack the technology to comply with the 277 ACK requirement. For that reason, claims administrators employ clearinghouses to accept and respond to e-bills on the claims administrator’s behalf, including sending the required 277 ACKs.  

Below, we share cumulative data demonstrating claims administrators’ compliance rates for sending 277 ACKs to providers.

Because the clearinghouse sends the 277 ACKs to providers, the compliance rates below are listed by clearinghouse (plus CorVel), rather than by individual claims administrators. However, we must note that it is always the claims administrator’s legal responsibility to ensure the provider receives 277 ACKs, even when doing so through a clearinghouse.

Overall, the 277 ACK compliance rates for CorVel and Carisk are outstanding, topping out at 99%, closely followed by Jopari with a 97% compliance rate. By contrast, we recently reported how claims administrators using Data Dimensions saw their 277 ACK compliance rate plummeted to only 51% in May. 

Read on for overall compliance rates by all claims administrators billed by daisyBill providers, through all four clearinghouses and CorVel.

Compliance Data by Clearinghouse

For each clearinghouse and CorVel, below is internal daisyBill data showing claims administrators’ collective rates of compliance with sending daisyBill providers timely, compliant 277 ACKs.

For both tables (one showing compliance for the year to date, the other showing compliance over the last 30 days), the following data are included:

• Clearinghouse: The entity used by claims administrators to accept e-bills from providers; as noted below, CorVel is a claims administrator, not a clearinghouse
• e-Bill Submission Count: The total number of original bill submissions and Second Review appeals daisyBill providers submitted to the clearinghouse
• 277 ACK Compliant Count: The number of e-bills to which the clearinghouse responded by sending the provider a compliant and timely 277 ACK
• 277 ACK Missing/Late Count: The number of e-bills for which the clearinghouse failed to return the 277 ACK, or returned the 277 ACK untimely
• 277 ACK Compliance Rate: The percentage of e-bills to which the clearinghouse responded by sending the provider a compliant and timely 277 ACK

Claims Administrator Compliance: 1/1/2022 to 4/30/2022

All data below reflects e-bills sent to claims administrators from 1/1/2022 to 4/30/2022.

Claims Administrator Compliance: Last 30 Days

All data below reflects e-bills sent to claims administrators from 5/1/2022 to 5/31/2022 where a 277 ACK is due.

*Corvel is not a clearinghouse. CorVel is a claims administrator with proprietary technology that allows CorVel to accept e-bills directly from providers, and return the required 277 ACK and e-EORs (electronic Explanations of Review) to providers.

How 277 ACKs Help Providers AND Payers

Claims administrators (i.e. insurers, self-insured employers, and third-party administrators) must return an X12 277 acknowledgement (277 ACK) confirming receipt within 2 working days of receiving a provider’s e-bill. The 277 ACK both confirms the claims administrator received the e-bill, and informs the provider that the claims administrator either:

1. Accepted the e-bill for payment processing, or
2. Rejected the e-bill and will not process for payment

The 277 ACK requirement is a crucial preliminary step that cuts unnecessary friction and paves the way for smooth bill processing.

The e-billing workflow below illustrates how the claims administrator’s clearinghouse (or Corvel) must confirm the e-bill submission as complete and compliant, before the claims administrator can adjudicate and pay the e-bill.  

For providers, the 277 ACK:

• Confirms and documents the date the claims administrator received the e-bill,
• Informs the provider if the claims administrator rejected the e-bill and the reason for the rejection, allowing the provider to quickly correct and resubmit the e-bill, and
• For accepted e-bills, establishes the due date for payment and the Explanation of Review (EOR)

For claims administrators, the 277 ACK requirement:

• Ensures that providers submit clean, compliant bills in the correct standardized format, eliminating friction that may occur due to faulty e-bills

Claims Administrators: Responsible for Clearinghouse Compliance

California law holds the claims administrator responsible for failures to comply with e-billing requirements, even if the fault lies with a clearinghouse, bill review, or other outside vendor.

According to the DWC Electronic Medical Billing and Payment Companion Guide:

Billing agents, electronic billing agents, third party administrators, bill review companies, software vendors, data collection agents, and clearinghouses are examples of companies that may have a role in electronic billing. Entities or persons using agents are responsible for the acts or omissions of those agents executed in the performance of services for the entity or person. [emphasis added]

For claims administrators that consistently fail to meet 277 ACK requirements, daisyBill contacts the appropriate clearinghouse to address the problem, and if necessary, submits formal Audit Complaints against the claims administrator for systematic non-compliance.

daisyBill representatives will attend the 2022 California Coalition on Workers’ Compensation (CCWC) Annual Conference from June 8-10; we welcome conversations with any claims administrator representative who wishes to discuss the data presented here, or ask any questions regarding e-billing compliance.

daisyBill has the technology and expertise to make workers’ comp work better. Reach out to see how we can help your practice obtain fast, correct reimbursement for treating injured workers.

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