In healthcare, every moment matters — not just in patient care but in the systems that keep everything running, too. However, when administrative processes are slow and inefficient, medical providers face billing delays, claim denials, and financial strain, creating unnecessary burdens on both staff and finances.
To address this, many healthcare organizations use Electronic Data Interchange (EDI), which replaces manual paperwork by using digitized, standardized documents like the EDI 837 (Healthcare Claim). Thanks to the EDI 837, claims are processed quicker, errors are minimized, and payments are received with fewer delays.
In this guide, we’ll explain what the EDI 837 is, its various components and how to read them, and how EDI benefits healthcare organizations.
What Is the EDI 837?
The EDI 837 document follows the ANSI ASC X12 standard, a widely used format for electronic data exchange. While ASC X12 applies to multiple industries in North America, such as shipping and manufacturing, the EDI 837 is specifically designed for healthcare to streamline the process of submitting medical claims to insurance companies.
Before adopting EDI, the healthcare sector processed patient claims via paper forms, faxes, and phone calls. This manual system was slow and prone to errors, often leading to delayed payments or denied claims. With the EDI 837, hospitals, clinics, and other medical facilities send claims electronically in a consistent structured format. This improves accuracy, reduces processing times, and eliminates many administrative burdens for both healthcare providers and insurers.
HIPAA Compliance and Data Security
Because EDI 837 files contain private patient health information, they need to be handled with extreme care. In the United States, the Health Insurance Portability and Accountability Act (HIPAA) sets strict guidelines for hospitals, insurance companies, and billing services to protect patient data. To stay compliant, these organizations must take extra precautions to prevent data breaches and unauthorized use. Failing to follow HIPAA regulations can result in hefty fines and legal consequences.
To prevent data breaches, healthcare providers and insurance companies can’t just email patient records or store them on unprotected servers. Instead, HIPAA requires them to use secure file transfer protocols (SFTP) and encrypted networks so that claims and other medical data are transmitted safely.
HIPAA also requires that every EDI 837 claim follows the same structured format. Without this standardization, hospitals, insurers, and billing companies might all use different formats, leading to mistakes and payment delays.
EDI 837 Variations and Use Cases
Not all healthcare claims are the same, and different types of medical providers require different claim formats. To address this, HIPAA introduced the 5010 version of the EDI 837 in 2012, dividing it into three distinct formats:
EDI 837D: Dental providers use this EDI document to submit claims for services such as cleanings, fillings, and oral surgeries.
EDI 837P: Professional healthcare providers, such as doctors, therapists, and outpatient specialists, use this to bill for medical services performed in non-hospital settings.
EDI 837I: Institutional providers, such as hospitals and inpatient facilities, use this to bill for services related to hospital stays, surgeries, and specialized treatments.
While the 837 is the standard for EDI healthcare claims, it's important to note that retail pharmacies don't use this document. Instead, pharmacy claims are processed through the National Council for Prescription Drug Programs (NCPDP) standard, which is specifically designed for prescription transactions.
Sample EDI 837 Document
Here’s an EDI 837 file format example and how its various components, including its segments and elements, appear in code:
ISA*00* *00* *ZZ*SENDERID *ZZ*RECEIVERID *240226*1705*U*00401*000000001*0*T*:~
GS*HC*SENDERID*RECEIVERID*20240226*1705*1*X*005010X222A1~
ST*837*0001*005010X222A1~
BHT*0019*00*0123456789*20240226*1705*CH~
NM1*41*2*SENDER CLINIC*****46*1234567890~
PER*IC*CONTACT NAME*TE*5551234567~
NM1*40*2*INSURANCE COMPANY*****46*9876543210~
HL*1**20*1~
NM1*85*2*PROVIDER CLINIC*****XX*1234567893~
N3*123 MAIN STREET~
N4*LOS ANGELES*CA*90001~
REF*EI*123456789~
HL*2*1*22*0~
SBR*P*18*******MC~
NM1*IL*1*DOE*JOHN****MI*A123456789~
N3*456 PATIENT AVENUE~
N4*SAN DIEGO*CA*92101~
DMG*D8*19700515*M~
CLM*987654321*250***11:B:1*Y*A*Y*Y~
HI*ABK:K500*ABF:Z208~
NM1*PR*2*INSURANCE COMPANY*****PI*9876543210~
N3*789 INSURANCE WAY~
N4*CHICAGO*IL*60601~
LX*1~
SV1*HC:99213*150*UN*1***1~
DTP*472*D8*20240226~
SE*25*0001~
GE*1*1~
IEA*1*000000001~
How to Read an EDI 837 File: EDI 837 Specifications
The EDI 837 file format follows a strict structure defined by the ASC X12 standard to ensure accurate claim processing. Each 837 file consists of segments, elements, and loops that convey details about a healthcare claim.
Using the above EDI 837 example, let’s take a detailed look at its various components and what they mean:
1. ISA Segment (Interchange Control Header)
The ISA segment acts as an envelope for the entire EDI file. It contains sender and receiver details, control numbers, delimiters, and the transmission date and time. The ISA segment is always a fixed 106-character length.
2. GS Segment (Functional Group Header)
The GS segment groups related transactions within the interchange and specifies the functional type (e.g., healthcare claim submission). It identifies the sender and receiver within this functional group.
3. ST Segment (Transaction Set Header)
The ST segment marks the beginning of an individual healthcare claim transaction. It assigns a unique transaction control number, which must match the SE segment's control number at the end of the transaction.
4. BHT Segment (Beginning of Hierarchical Transaction)
The BHT segment provides more specific details about the claim, including the purpose of the transaction and whether it’s an original claim or a replacement.
5. Submitter Info (1000A Loop)
The 1000A loop contains details about who’s submitting the claim (e.g., a hospital, clinic, or billing service), including their name and contact information.
6. Receiver Info (1000B Loop)
The 1000B loop denotes who’s receiving the claim (e.g., an insurance company or government payer), along with their name and unique Electronic Transmitter Identification Number (ETIN).
7. Billing Provider Info (2000A Loop)
The 2000A loop contains information about the healthcare provider billing for the claim, including their name, address, and a unique ID number called a National Provider Identifier (NPI).
8. Subscriber Info (2000B Loop)
The 2000B loop contains the insurance policyholder’s name and member ID number.
9. Patient Info (2000C Loop)
If the claim is for someone other than the subscriber (e.g., a child on a parent's insurance), the 2000C loop contains patient-specific details. If the patient and subscriber are the same, this loop isn’t required.
10. Claim Info (2300 Loop)
The 2300 loop includes claim-level details such as the claim number, total billed amount, diagnosis codes, and claim frequency (e.g., original, corrected, or voided claim).
11. Service Details (2400 Loop)
The 2400 loop lists each individual service or procedure performed.
12. Service Date (DTP Segment)
The DTP segment indicates the relevant date (e.g., service date, discharge date, or accident date) in YYYYMMDD format. It may appear in different loops based on the type of date information required.
13. End of File (SE, GE, and IEA Segments)
At the end of the EDI 837 file, three segments close the transaction. SE denotes the number of segments in the transaction, GE marks the end of the functional group, and IEA closes the interchange.
3 Benefits of 837 EDI Transactions in Healthcare
Hospitals and clinics already manage a demanding workload without the added frustration of manual paperwork, faxes, and billing errors. The EDI 837 makes things easier, reducing errors while expediting approvals and payments.
1. Streamlined Operations
Managing paper claims takes valuable time, but EDI 837 allows providers to send claims electronically in a format that insurers can process quickly. With all data structured the same way, there’s less back-and-forth and fewer issues for billing teams to deal with.
2. Reduced Errors
Even a tiny mistake in a medical claim can lead to delays, extra work, or even denials. The EDI 837 helps catch errors early, which means fewer rejected claims and resubmissions and a much smoother approval process.
3. Faster Payments
Waiting on claim approvals slows down payments, which can make it harder for hospitals and clinics to manage expenses. The EDI 837 speeds things up by sending claims directly to insurers without manual processing delays. With fewer errors and a clear, uniform format, payment happens faster.
Simplify Claims Processing with EDI 837
The EDI 837 makes healthcare claims easier by improving communication between hospitals, insurance companies, and billing teams. But EDI's benefits stretch far beyond healthcare — businesses in supply chain management, finance, and retail also use it to exchange data securely without manual processing.
Ready to learn more about what cloud-based EDI has to offer your organization? Connect with an EDI expert today.