How do medical claims work?


How do medical claims work?

Because there are a heck of a lot of medical claims being submitted electronically through drchrono, the questions is how do we do this? There is something called the “EDI”. “EDI” simply means Electronic Data Interchange (EDI). EDI is the electronic interchange of business information using a standardized format; a process which allows one company (e.g. drchrono) to send information to another company, (e.g. Emdeon/Change Healthcare, TriZetto, iHCFA) electronically rather than with paper. (Learn more here.)

It all starts with “EDI 837 Health Care Claim”: The EDI 837 transaction set is the format established to meet HIPAA requirements for the electronic submission of healthcare claim information. The claim information included amounts to the following, for a single care encounter between patient and provider: A description of the patient. Of course, there are many different types of claims that can be submitted:

  • Insurance: To submit the claim to the patient’s primary medical insurance.
  • Secondary Insurance: To submit the claim to the patient’s secondary medical insurance.
  • Auto Accident Claim: To submit the claim to the patient’s Auto insurance.
  • Worker’s Comp Claim: To submit the claim to the patient’s Workers compensation insurance.
  • Durable Medical Equipment Claim: To submit the claim to the patient’s Durable Medical Equipment insurance.

The 837 file is simply transaction file that is submitted from drchrono to a clearing house, which is then sent on to an Insurance Provider/company. There are a number of other transactions which also have numbers associated with them.

I’ll give you one more example: if a medical professional wants to check electronically if a patient has eligibility coverage, the medical provider press a button in drchrono, which triggers a EDI 270 Health Care Eligibility/Benefit Inquiry transaction.

The EDI 270 Health Care Eligibility/Benefit Inquiry transaction set is used to request information from a healthcare insurance plan about a policy’s coverages, typically in relation to a particular plan. The in turn then Insurance Provider sends back to drchrono the EDI 271 Health Care Eligibility/Benefit Response transaction, this is the response back to drchrono to let the provider know what a patient’s coverages is under a plan.

There are a number of these types of transactions, below is a great diagram of the workflow.


Daniel Kivatinos Article by Daniel Kivatinos, COO and cofounder, drchrono

Daniel drives direction, brand vision, and business strategy for drchrono. Daniel’s focus has been in the technology space since 2001, as a software engineer and entrepreneur. Daniel holds an M.S. in Computer Science and a B.S. in Computer Science & Psychology from Stony Brook University.

~ Life is short, build stuff that matters.


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