The provider sends electronic claims to the payer via ASC X12N 837 claim submission. The provider is enrolled in 835 ERA transactions with the payer. The provider is out-of-network with the payer. The patient signs the assignment of benefit authorization, and it is marked as so on the 837 claim submission.

The payer policy is not to honor the assignment of benefits. The payer selectively does not send an 835 ERA and instead sends a paper explanation of benefits to the provider stating that it has no obligation to send an 835 ERA if the payment is not made to the provider.

Given that 835 ERA is a response transaction to the 837 claim submission that closes an accounting loop, it makes it illogical that a health plan has no obligation to report the correct adjudication of the claim to the provider if the payment is sent to the patient. Given that 835 ERA specifically has CAGC = PR (Patient Responsibility) and CARC (Claim adjustment reason code) 100 = Payment made to patient/insured/responsible party that specifically reports such situation, it makes it dubious that a health plan can simply decline to return claim adjudication information in 835 ERA. We looked in 005010X221A1 and could not find an exemption or carve-out for health plans that send payments to a party other than the provider that would allow a health plan to decline to send 835 transactions.

We have faced this situation with a number of health plans. These payers claim that X12 rules do not require health plans to send X12 835 ERA to a provider when the payment is made to the patient.