The EDI 820 transaction set applies to two types of communication, both of which are common in some billing and medical clearinghouse processes. The first is a payment order, which instructs a payer to send funds to a payee. The second is remittance advice, which tells the recipient how to apply cash to their accounts receivable records, and can be sent either directly or through an intermediary.
In either case, EDI 820 communication is generally sent after receiving an invoice, and can therefore be considered an initiation of payment. Once sent, a value-added network (VAN) usually handles transmission and data security, but direct, internet-based connections are becoming quite popular as well.
EDI 820 Transactions in Healthcare
In the medical billing process, a medical clearinghouse may include the 820 transaction as part of a larger banking transaction. Although it has many applications outside healthcare, the 820 transaction set is often used by companies that pay their employees’ health insurance premiums.
Just where do the EDI 820 data come from? The answer depends on the organization, but several input sources may each contribute bank, financial, routing, and other info contained in the 820 transaction. These often include:
- Faxed or scanned paper documents
- Uploaded electronic documents
- Web portals
Automating EDI Data Input
While some organizations have a completely automated, paperless, and nearly labor-free EDI input workflow, this isn’t often the case. In fact, no matter how our clients input data to their EDI system, Paperless Productivity has typically found a way to streamline that process. For example, this may take the form of automatically capturing data that were previously recorded by hand, and/or digitizing incoming documents before they reach the office.
Contact us today to learn more about how we help medical clearinghouses and medical billing firms cut costs and maximize efficiency. Additionally, explore our site for more information on automating data capture with the EDI 835 and EDI 837 transaction sets.