Electronic remittance advice (ERA) is the payer's electronic explanation of a payment, sent to the provider as an X12 835 file. One 835 usually covers several claims and lists, for each claim and line, what was billed, what was paid and every adjustment with its codes. An EOB is the patient's version; the 837 is the claim the provider sent.
- The 835 goes to the provider; the EOB goes to the patient.
- The 837 is the claim out; the 835 is the payment answer back.
- The TRN trace number ties the 835 to the bank deposit.
- Post adjustments with their group code, CARC and RARC, not just the paid amount.
What is electronic remittance advice (an 835 file)?
After a payer processes claims it sends remittance advice with the adjudication and payment details. CMS: "One ERA or SPR usually includes adjudication decisions about multiple claims", and the remittance "reports the reason for each adjustment, and the value of each adjustment" (CMS). The electronic version is the X12 835: HHS adopted "Health Care Claim Payment/Advice (835)", ASC X12N/005010X221, as the HIPAA standard (45 CFR 162.1602), and CMS lists the ERA as "ASC X12N 835 Version 5010" (CMS).
The ERA's advantage, in CMS's words, is that payments and adjustments "can be automatically posted to accounting or billing applications from an ERA, eliminating the time and cost for staff to post this information manually" (CMS).
Is an 835 the same as an EOB?
No. The 835 goes to the provider. An explanation of benefits goes to the patient: it "shows you the total charges for your visit" and "isn't a bill" (CMS). Medicare's equivalent for beneficiaries is the Medicare Summary Notice (CMS).
| Electronic remittance advice (835) | Explanation of benefits (EOB) | |
|---|---|---|
| Who receives it | The provider or its billing company | The patient (plan member) |
| Format | Electronic X12 file, posted by software | Paper or a portal page |
| Scope | Usually many claims and one payment | Usually one visit or claim |
| Codes | Group codes, CARCs and RARCs | Plain-language explanations |
| Used for | Posting payments, working denials, reconciling deposits | Telling the patient what the plan paid and what they may owe |
What is the difference between an 837 and an 835 file?
The 837 is the claim the provider sends; the 835 is the payer's payment and explanation coming back. Both are HIPAA standards: the professional claim is "Health Care Claim: Professional (837)", ASC X12N/005010X222 (45 CFR 162.1102), and CMS lists health claims as "ASC X12N 837 Version 5010" (CMS). The patient control number the practice puts on the 837 comes back in the 835's claim segment, which is how the two are matched.
How do you read an 835 file, segment by segment?
Segment names below are from CMS's 835 flat file layout. Practice management systems read these for you; knowing them helps when posting looks wrong.
| Segment | CMS name | What to look at |
|---|---|---|
| BPR | Financial Information | Total actual provider payment and whether it came by check or EFT |
| TRN | Reassociation Trace Number | Check or EFT trace number; matches the bank deposit |
| N1 | Payer Identification, Payee Identification | Who paid and who was paid |
| CLP | Claim Level Data | Patient control number, claim status, total charge, payment, patient responsibility and payer claim number |
| CAS | Claim Adjustment, Service Adjustment | Group code, adjustment reason code and amount for each adjustment |
| SVC | Service Payment Information | Each line: procedure, charge and payment |
| DTM | Service Date, Statement From or To Date | Dates that tie the line to the visit |
| PLB | Provider Level Adjustment | Adjustments not tied to one claim, such as interest or a prior overpayment recovery |
Example: reading one remittance for three claims (fictional)
A fictional ERA pays three claims in one EFT. Amounts are in US dollars. BPR shows a total payment of 344.40 and TRN carries trace number 1234567890, which matches the deposit in the bank statement.
CLP for claim CLM-2001: charged 250.00, paid 180.00, patient responsibility 20.00; CAS shows CO-45 of 50.00 (contractual write-off) and PR-3 of 20.00 (copay). CLP for CLM-2002: charged 120.00, paid 92.40; CAS CO-45 of 27.60. CLP for CLM-2003: charged 300.00, paid 72.00; CAS CO-97 of 228.00 on one line (bundled into another service). There is no PLB segment, so the three claim payments add up to the BPR total.
Use the remittance reconciliation template (CSV) to record each ERA against its deposit and the claims it pays.
| Claim | Charged | Paid | Adjustments | Action |
|---|---|---|---|---|
| CLM-2001 | 250.00 | 180.00 | CO-45 50.00; PR-3 20.00 | Post; bill the patient the copay |
| CLM-2002 | 120.00 | 92.40 | CO-45 27.60 | Post; no follow-up |
| CLM-2003 | 300.00 | 72.00 | CO-97 228.00 | Review the bundling edit before accepting |
How to reconcile an ERA to the bank deposit
Reconcile each ERA to its deposit before month end, so missing payments and missing remittances surface early.
- Match the trace number: CMS lists the "TRN Associated Trace Number" as part of the ERA standard (CMS), and the same number travels with the EFT.
- Check that the BPR total equals the sum of claim payments plus or minus any PLB provider-level adjustments.
- Post every CAS adjustment with its group code and reason code, then route denials to the work queue.
- Flag ERAs with no matching deposit, and deposits with no ERA, for follow-up with the payer or clearinghouse.
Common mistakes with 835 files
These cause most posting and reconciliation errors.
- Posting only the paid amount and discarding adjustment codes, which hides denials.
- Treating the 835 like an EOB and sending it to patients.
- Ignoring PLB adjustments, so the deposit never reconciles.
- Not enrolling for ERA with each payer, then posting paper remittances by hand.
- Matching on patient name instead of the patient control number and payer claim number.
Where an 835 points you to the payer's policy
Some adjustment reasons depend on a payer policy rather than on the claim itself. For those codes, the X12 code list adds the usage note "Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present." When that REF segment is on the service line, it identifies the payer policy, which is worth reading before an appeal.
- CARC 16: the claim lacks information or has a billing error.
- CARC 50: not deemed a medical necessity by the payer.
- CARC 96: non-covered charges.
- CARC 4: the procedure code is inconsistent with the modifier.
What each code means and how to work it is in the guide to denial codes and remark codes.
Source: X12: Claim Adjustment Reason Codes (external code list)
Your remittance history records every payer decision
Years of 835s, joined to the claims they answer and to the appeals that followed, are a complete record of what payers paid, reduced and denied, and why.
AI developers building billing, denial and authorization tools ask for this kind of history, where each request or claim is joined to the payer's decision and what happened next. Only the practice or group that owns the records can agree to share them, and only after de-identification that meets HIPAA (see de-identifying company data). A billing company holds these records for its clients and needs their written permission.
If your company keeps years of claims, denial and prior authorization records, the guide for physician groups and billing companies explains what AI developers ask for and who signs. To see what yours could be worth, describe them in six questions; no files or system access needed.
Common questions
What is an ERA in medical billing?
Electronic remittance advice: the payer's electronic statement of how it processed and paid a provider's claims, sent as an X12 835 file. It lists payments and every adjustment with its codes.
Is an 835 the same as an EOB?
No. The 835 goes to the provider and usually covers many claims and one payment. An explanation of benefits goes to the patient, covers their visit and is not a bill.
What is the difference between an 837 and an 835 file?
The 837 is the claim the provider sends to the payer. The 835 is the payer's answer: what it paid, what it adjusted and why. The patient control number links them.
Can I convert an 835 file to a PDF or readable report?
Yes. Practice management systems and clearinghouses display 835s as readable remittances. For Medicare, CMS says free software (PC Print for institutional and Medicare Easy Print for professional providers) can read the ERA and print an equivalent of the paper remittance.
Which version of the 835 is required under HIPAA?
Version 5010: ASC X12N/005010X221, the Health Care Claim Payment/Advice (835), adopted in 45 CFR 162.1602 and listed by CMS as the ERA standard.
How do you match an 835 to a bank deposit?
Use the TRN reassociation trace number, which carries the check or EFT trace number, and confirm the BPR total equals the claim payments plus any provider-level adjustments.
What is a PLB segment in an 835?
The provider level adjustment. CMS gives examples such as interest for a late payment of a clean claim, or a deduction for a prior overpayment. These are not tied to one claim, so post them separately.
What is the difference between an ERA and a standard paper remittance?
They carry the same thing: CMS says that after Medicare processes a claim, "either an ERA or an SPR is sent with final claim adjudication and payment information". The ERA is the electronic version, which Medicare contractors send in the X12 835 version 5010 format, and the SPR is the paper version. To view or print ERAs, institutional providers can get PC Print and professional providers Medicare Easy Print (MREP) from their contractors.
Sources and further reading
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- CMS: Electronic Remit Advice (ERA) and Standard Paper Remit (SPR)
- CMS: 835 Flat File, 5010A1 (PDF)
- 45 CFR 162.1602: standards for health care EFT and remittance advice (X12 835)
- 45 CFR 162.1102: standards for health care claims (X12 837)
- CMS: Adopted standards and operating rules (HIPAA administrative simplification)
- CMS: How to read an explanation of benefits (EOB)
- X12: Claim Adjustment Reason Codes (external code list)