Revenue cycle

How to read an 835 remittance advice, and use it to find short payments

The 835 is the HIPAA-standard electronic remittance: one file per payment that says, line by line, what you billed, what the payer allowed and paid, what it adjusted, and why. Most practices see it only after the practice management system has posted it. That's where short payments slip through: they post correctly and get adjusted off, and nobody compares the allowed amount with the contract.

835, ERA, EOB, EFT: what's what

The 835 and the ERA (electronic remittance advice) are the same thing. The EOB, or paper remittance, is the readable version; Medicare's is the Standard Paper Remittance. The EFT is the money itself. Under HIPAA it travels as an ACH CCD+ entry whose addenda record carries the 835's TRN reassociation trace number, so you can match each deposit to its remittance (45 CFR 162.1602(d)).

Medicare contractors may release the ERA before the payment date but never after it, and they stop sending paper remittances to Part B providers 45 days after the provider starts getting both formats (CPM ch. 22 §40.1).

The structure in one picture

An 835 nests like an outline. Each indent below is a level the numbers must add up through.

ISA / GS / ST           envelope: sender, receiver, version
  BPR                   the payment: amount, method, date
  TRN                   trace number (check or EFT number)
  1000A  N1*PR          payer
  1000B  N1*PE          payee (you)
  2000   LX             header number for a group of claims
    2100 CLP            one claim
         CAS            claim-level adjustments
         NM1, REF, DTM  patient, references, dates
         AMT            claim amounts (AMT*I = interest)
         MOA / MIA      claim-level remark codes
      2110 SVC          one service line
           DTM          date of service
           CAS          line adjustments
           REF*0K       payment policy ID
           AMT*B6       allowed amount
           LQ*HE        line remark codes
  PLB                   provider-level adjustments
SE / GE / IEA           envelope close

The segments to know, in plain language

Element names follow CMS's 835 flat file and companion guide.

Medicare uses only the CO, OA and PR group codes; PI isn't used (CMS companion guide). Commercial payers may also send PI (X12 group codes).

Three equations every 835 must satisfy

CMS requires Medicare 835s to balance at the line, claim and provider level (CPM ch. 22 §30). Each equation tells you where money went.

1. Line: SVC02 minus the line's CAS amounts equals SVC03 (X12 RFI 2601). The CAS amounts are where the line's missing money went. PR amounts belong to the patient. CO amounts are written off, so CO is the group to audit.
2. Claim: CLP03 minus all the claim's CAS amounts, at claim and line level, equals CLP04 (X12 RFI 2601).
3. Payment: in practice, BPR02 equals the sum of CLP04 minus the sum of PLB amounts. A positive PLB reduces the payment and a negative one increases it. UnitedHealthcare, for example, reports interest as a negative PLB L6 that "adds to the check total" (UHC PLB guide). The general rule is in the paywalled TR3, so we state it from payer guidance.

The allowed amount (AMT*B6) isn't part of any equation. X12 says the AMT segment conveys information only (RFI 2601). That's why a wrong allowed amount still produces a balanced file.

A synthetic 835, annotated

Illustrative numbers, not real rates. This is not a real remittance: every name, ID and number is invented. One payment covers two claims and a recoupment of an older overpayment.

ISA*00*          *00*          *ZZ*TESTPAYER      *ZZ*TESTCLINIC     *261019*1200*^*00501*000000001*0*P*>~
GS*HP*TESTPAYER*TESTCLINIC*20261019*1200*1*X*005010X221A1~
ST*835*0001*005010X221A1~
BPR*I*303.00*C*ACH*CCP*01*000000000*DA*0000000*1234567890**01*000000000*DA*0000000*20261019~
TRN*1*EFT0000001*1234567890~
DTM*405*20261019~
N1*PR*TESTVILLE HEALTH PLAN~
N3*1 EXAMPLE WAY~
N4*TESTVILLE*ZZ*00000~
N1*PE*TESTVILLE MEDICAL GROUP*XX*1234567890~
LX*1~
CLP*PCN-A001*1*550.00*255.00*0.00*12*PAYERCLM0001*11*1~
NM1*QC*1*PATIENT*TEST****MI*TEST000001~
SVC*HC:10060*300.00*180.00**1~
DTM*472*20261001~
CAS*CO*45*120.00~
AMT*B6*180.00~
SVC*HC:11400:51*250.00*75.00**1~
DTM*472*20261001~
CAS*CO*45*100.00**59*75.00~
AMT*B6*75.00~
CLP*PCN-B002*1*200.00*88.00*22.00*12*PAYERCLM0002*11*1~
NM1*QC*1*PATIENT*SAMPLE****MI*TEST000002~
SVC*HC:99213*200.00*88.00**1~
DTM*472*20261003~
CAS*CO*45*90.00~
CAS*PR*2*22.00~
AMT*B6*110.00~
PLB*1234567890*20261231*WO:PAYERCLM0000*40.00~
SE*28*0001~
GE*1*1~
IEA*1*000000001~

All three equations close. Line 2: $250 − $100 − $75 = $75. Claim B: $200 − $90 − $22 = $88. Payment: $255 + $88 − $40 = $303. The file balances whether or not $180, $150 and $110 match your contract, and the deposit is $40 short of the claims because of a claim that isn't on this remittance at all.

Where short payments hide in the 835

• CO-45 larger than expected. The allowed amount (AMT*B6, or SVC02 minus CO-45) is below contract. See CO-45 and how to calculate expected reimbursement.
• CO-59. A multiple-procedure reduction. Was the highest-valued procedure ranked first, and was the right percentage applied? See CO-59.
• CO-97. The line was bundled into another service. Check whether the edit applies, or whether a modifier should have exempted it. See CO-97.
• CO-253. Sequestration, a 2% reduction on traditional Medicare (CGS Medicare). Whether a Medicare Advantage plan may take it from you depends on your contract.
• SVC06 present. The payer adjudicated a different code from the one you billed. Compare the two.
• SVC05 below the units you billed. Check the payer's unit limit against your contract and the documentation.
• CLP02 = 22, then a reprocessed claim. Compare the new CLP04 with the old one. The repayment can be lower than the reversal, and the difference posts as if it were routine.
• PLB WO or FB. Money moved for a claim not on this remittance. Medicare's WO is a withhold against a debt, and FB is a forwarding balance, which Noridian says is not a recoupment (Noridian). Trace the reference ID to the original claim and check that the recovery is valid.
• OA-23. The impact of a prior payer's adjudication. On secondary claims, check that the primary's amounts carried over correctly.

Audit the allowed amount, not the payment. Payment moves with deductible and coinsurance; the allowed amount is what reflects your contract.

CARCs, RARCs and group codes

The group code says who owns the adjustment: CO is a contractual write-off, PR may be billed to the patient, and OA is used when no other group applies (CPM ch. 22 §60.1). The claim adjustment reason code (CARC) says why, one per adjustment amount. Remark codes (RARCs) add detail, and those starting with "Alert" are informational. The X12 code maintenance committee owns the CARC list and CMS owns the RARC list, and both change three times a year (§§60.2–60.3). CAQH CORE also publishes standard CARC and RARC combinations for common scenarios that payers must follow (§80.2).

How to read one without software

For Medicare, your MAC provides two free programs: MREP for professional remittances and PC Print for institutional ones. Both print the 835 in readable form, and MREP shows the reason and remark code text (CPM ch. 22 §§40.4–40.5). For other payers, use the payer portal's PDF remittance or your clearinghouse's viewer.

A raw 835 is plain text. The ISA envelope at the top defines the separators. Medicare uses * between elements and ~ at the end of each segment (CMS companion guide), and many payers do the same, but check the ISA before you parse. Don't paste a real 835 into an online viewer site. It contains PHI.

Using 835 data to find underpayments at scale

For each line you need three things: the expected amount (contract rate, fee schedule and the reductions that legitimately apply), the allowed amount from AMT*B6 or derived from CO-45, and the CO adjustments by reason code. Group the variances by payer, code and reason. A gap that repeats across claims usually means the payer loaded your rate wrong, and fixing the rate once is worth more than appealing each claim. The underpayments guide covers the common causes.

The appeal clock usually runs from the remittance. For Medicare, a redetermination request is due within 120 calendar days of receiving the initial determination, and receipt is presumed 5 days after the notice date (42 CFR 405.942). Commercial contracts set their own windows. When you find one, the underpayment appeal letter shows what to send.

Questions

Is an 835 the same as an EOB?

They carry the same information in different forms. The 835 is the HIPAA-standard electronic remittance, also called the ERA; the EOB or paper remittance is a human-readable version of it. Medicare's paper version is called the Standard Paper Remittance.

Why doesn't my deposit match the claims on the 835?

Usually because of provider-level adjustments in the PLB segment. A recoupment for an older claim reduces the payment, and interest increases it, so the total payment in BPR02 can differ from the sum of the claim payments.

Where is the allowed amount on an 835?

In the AMT segment with qualifier B6 in the service line loop, when the payer sends it. X12 describes it as the amount the payer deems payable before patient responsibility. If it's missing, charge minus the CO-45 adjustment usually gives the same figure.

What does CLP02 = 22 mean on an 835?

Claim status 22 is a reversal of a previous payment. The payer is taking back what it paid on the claim, usually so it can reprocess it, and the corrected claim often follows on the same or a later remittance.

How often do CARC and RARC codes change?

Three times a year. CMS says both lists are updated on or around March 1, July 1 and November 1, so a code your system doesn't recognize may simply be new.

Last reviewed October 19, 2026. This guide is general information about payer payment rules, not legal advice. Your payer contract and provider manual control the details; check them before you file.