California law mandates that when a provider bills electronically for workers’ comp services, the claims administrator must timely send the provider an electronic Explanation of Review (EOR), in X12 835 EDI format.
These electronic EORs eliminate the provider’s administrative burden of posting payment information from paper EORs, because billing software can automatically post the reimbursement amounts reported in the electronic EOR to the appropriate e-bill.
These electronic EORs, or ‘835s’ (for short) are crucial for providers to track whether the practice receives timely and proper reimbursement. Once an electronic EOR automatically posts to an e-bill, the posting closes the payment loop on that e-bill.
Below, we outline electronic EOR (835) requirements in California, and explore how 835s make managing practice revenue much, much easier.
Electronic EORs (835s) contain information that would normally populate a non-electronic paper EOR. Below is an example of EOR data in 835 format:
California law mandates claims administrators reimburse providers who send e-bills within 15 working days of receipt of the e-bill. Further, California law mandates that the claims administrator send the provider an electronic EOR (835) that adheres to Division of Workers’ Compensation (DWC) Medical Billing and Payment Guide Appendix B.
According to the Guide, upon receipt of the provider’s e-bill for medical treatment, the claims administrator must:
(By comparison, claims administrators must remit payment and EORs for non-electronic bills in 45 days and in 60 days for government employers).
The 15-day 835 deadline applies regardless of whether the claims administrator denied or adjusted payment. As Section 7.1(b) of the Guide specifies, the 835…
The 15-day 835 deadline is further reinforced by California Labor Code Section 4603.4, which states:
Bottom line: when a practice bills electronically, within 2 business days the provider knows when the 835 and payment are due from the claims administrator (based on the 277 electronic receipt). And within 15 business days of the e-bill’s receipt date, the provider knows:
When the provider bills electronically, the provider must also submit any necessary Second Review appeals electronically. Just as with the original e-bill, the claims administrator must respond to the electronic Second Review appeal with a final electronic EOR, in 835 format.
According to the DWC Guide, claims administrators must return the final EOR in 835 format within 14 days of receiving the Second Review appeal. However, the claims administrator has 21 days to remit any additional payment owed as a result of the Second Review appeal:
Bottom line: When a practice submits a Second Review appeal electronically, within 14 days the provider knows:
The majority of workers’ comp claims administrators (insurers, third-party administrators (TPAs), and self-insured employers) lack the technology to generate 835s and remit the 835s to providers. For that reason, claims administrators employ clearinghouses. These specialized vendors:
Delays in e-bill processing and payment may originate in any one of the claims administrator’s vendors, be it the clearinghouse, bill review service, or the software companies serving the clearinghouse or bill review service.
Regardless, by California law it is the claims administrator’s sole responsibility to timely return 835s in response to provider e-bills.
Our Claims Administrator Directory provides detailed data on all 593 claims administrators billed by daisyBill provider clients — including statistics on each claims administrator’s compliance in timely returning 835s.
In future articles, we’ll explore the 835 compliance data available on the Claims Administrator DIrectory in further detail. Stay tuned!
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