How to e-Bill: 277 "Receipts" Empower Providers

How to e-Bill:  277 "Receipts" Empower Providers

For workers’ comp providers, one of the most powerful advantages of e-billing is often overlooked: the mandated electronic “receipts” payers must send to providers verifying the payer received the complete e-bill submission, including supporting documents.

One of the biggest problems with non-electronic (aka: paper) bills is that payers routinely claim that unpaid paper bills are ‘not on fileor that payment is denied or downcoded due to allegedly missing supporting documentation.

When e-billing, digital “receipts” preclude bogus claims of missing bills or documents. Formally known as an ASC X12C/005010X214 Health Care Claim Acknowledgment (or ‘277 ACK’ for short), these required electronic 277 receipts offer three massive benefits to providers:

  1.  Proof that the payer received and accepted the e-bill submission, which eliminates the common excuse of ‘bill not on file’.

  1.  Proof of the supporting documents that the provider sent with the e-bill submission, which eliminates the common denial reason of ‘documents do not support the treatment.’

  1.  Establishment of a firm due date by which the payer must return payment and the Explanation of Review (EOR). In California, payment is due to the provider within 15 working days of receipt of the e-bill; the 277 ACK proves the payer received the e-bill and establishes the payment due date beyond question.

e-Bills and supporting documentation (when sent correctly by the provider) can never be “lost in the cloud” precisely because of the requirement that the payer must send a 277 ACK to verify receipt of the complete e-bill submission.

Below, we use one provider bill to demonstrate how these 277 ACKs prevent payers from shifting the blame to doctors for unpaid bills…plus, you won’t believe how insanely fast the claims administrator paid (spoiler: within 6 working days).

277 ACKs Force Payers to Play by the Rules

California requires claims administrators (aka: payers) to follow strict guidelines when responding to provider e-bills.

Upon receipt of an e-bill, the Division of Workers’ Compensation (DWC) Medical Billing and Payment Guide Section 7.1 requires the claims administrator to either accept the e-bill as complete or reject the e-bill as incomplete. Within 2 working days of receipt of an e-bill, the claims administrator must send a provider a 277 ACK alerting the provider that either:  

  • The complete e-bill submission was received and accepted (including supporting documentation), or
  • The e-bill was rejected (and will not be processed)

Below is an example of an e-bill transmitted to Gallagher Bassett on 2/22/2022. This e-bill History clearly displays the following information:

  1. Date the e-bill was transmitted to Gallagher Bassett (via its clearinghouse Jopari)
  2. Documentation transmitted with the e-bill
  3. Due date for EOR and payment

An important note: Jopari is the clearinghouse employed by Gallagher Bassett to accept provider e-bills on its behalf. While Jopari acts as Gallagher Bassett’s agent, Gallagher Bassett is wholly responsible for compliantly responding to the e-bill, even through Jopari. Therefore, sending an e-bill to Jopari is equivalent to sending it directly to Gallagher Bassett.

As required by DWC rules, within two working days after receipt of the e-bill, Gallagher Bassett (via Jopari) electronically sent the provider the required 277 ACK verifying the receipt of the complete e-bill submission (including supporting documentation).

As shown above, Jopari actually sent 3 separate 277 ACKs. Below, the more detailed breakdown of the 277 ACKs confirms that:

  1. Jopari forwarded the e-bill to Gallagher Bassett (referred to below as the “entity”).
  2. Gallagher Bassett acknowledged receipt of the e-bill
  3. Gallagher Bassett accepted the e-bill for processing

This detailed 277 ACK documentation leaves no room for doubt: Gallagher Bassett received and accepted a complete and compliant e-bill submission.

And here’s perhaps the best part: Gallagher Bassett returned the EOR and payment on 3/2/2022 — almost two calendar weeks before payment was officially due on 3/15/2022.

Kudos to Gallagher Bassett (with a great assist from Jopari) for demonstrating just how smooth and efficient workers’ comp billing can be when both provider and payer compliantly embrace technology.

This is the power of e-billing: documented, verified electronic transactions that demolish friction and speed up the payment process — and it all begins with a simple 277 ACK.

Of course, if the 277 ACK indicates that the provider’s e-bill submission was rejected, the provider must take remedial steps. Stay tuned to this blog for a complete breakdown of how providers should handle rejected submissions.

daisyBill makes authorization, billing, and appeals easier & faster. Learn how we can help your practice manage workers’ comp billing and protect your bottom line.


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