Chapter 10
EDI Services

10.1 EDI Services

EDI Services is a department solely committed to the ongoing availability and growth of Electronic Data Interchange (EDI). Medicare Claims Express (MCE), Medicare Provider Inquiry Plus (MPIplus), and Electronic Funds Transfer/Electronic Remittance Advice (EFT/ERA) are just a few examples of how we are keeping our pledge to you.

EDI, within EDI Services, also stands for Efficient, Direct, Intelligent. The following words, as defined by EDI Services staff, tells you what this means to us:

Efficient     EDI is the most efficient way to submit claims and the most effective way to serve our customers. EDI yields maximum results using the least amount of time, effort, and money.

Direct     EDI provides a direct connection from your office straight to EDI Services. From transmitting claims to making on-line inquiries, EDI is the clear, concise means for transferring data with complete integrity.

Intelligent     EDI is the intelligent choice in dealing with the constantly changing world of health care. EDI Services is dedicated to helping our customers work smarter, not harder.

10.2 Background

EDI Services has been accepting electronic claims since 1983. Initially, the only viable means of electronic submission was through magnetic tapes that captured the claim data from mainframe computers. As personal computer (PC) technology and capacity increased, EDI Services adapted the claims processing system to allow for electronic claim submission from any health care professional with claims submission software and a modem.

Electronic claim submission offers numerous time and money saving advantages to both health care professionals and the Medicare program. EDI Services is constantly upgrading and enhancing various services and features to better serve our electronic customers. Electronic billers receive reports verifying receipt of thier claims, detailed reporting errors and claim status that paper billers do not receive. As an added incentive, HCFA reduced the payment floor for electronic claims from 27 to 14 days.

To submit Medicare claims electronically, you have three options from which to choose:

a. Dialup

Electronic claims are transmitted by the biller from a personal computer (or computer system) via modem
directly to Medicare. The claims are edited and, upon acceptance, entered into the Multi-Carrier System (MCS) for claims processing at the end of an overnight (24 hour) batch cycle.

b. Tape

Tape billers submit magnetic tapes or cartridges by mail to computer operations. The tapes are logged and loaded onto a tape drive to be read. The claims are edited and, upon acceptance, entered into the Multi-Carrier System (MCS) for claims processing at the end of an overnight (24 hour) batch cycle.

IMPORTANT: Magnetic tape/Cartridge billing mode is not compatible with the American National Standards Institute (ANSI) standard format. Due to the Health Insurance Portability and Accountability Act (HIPAA) of 1996, this means you must migrate from the National Standard Format (NSF) to the ANSI standard format AND migrate to another electronic mode (e.g., dial-up or FTP) when the HIPAA mandate is implemented.

c. File Transfer Protocol (FTP)

File Transfer Protocol, or FTP, is a communications method for delivering and/or receiving data. It allows large volume electronic billers, like Magnetic Tape customers, to deliver and receive large volumes of data faster than using conventional transmission methods.
If you are currently billing electronically using Magnetic Tape or Cartridges, and are interested in migrating to FTP, please contact an EDI Analyst at (717) 763-6722, option 1, for information.


10.3 Advantages of Electronic Claims Submission

Electronic billers receive many advantages by submitting their claims electronically.
Some of the advantages include:

1. Electronic Funds Transfer / Electronic Remittance Advice (EFT / ERA)
2. Medicare Provider Inquiry Plus (MPIplus)
3. Beneficiary Eligibility Inquiry

10.4 What do I need to go EDI?

There are specific hardware and software requirements for each mode of submission.

a. Dialup (Modem) Submission

a.1 Hardware Requirements

a.2 Software Requirements
Billing software may be purchased from a vendor or obtained free from Medicare. Software may be as basic as a program that only submits electronic claims or as sophisticated as a program that automates all aspects of your practice. The software creates the claim data file in one of the following acceptable transmission formats:

b. Tape Submission

Tape submission will be made obsolete by the upcoming HIPAA legislation. File Transfer Protocol, or FTP, is a wise alternative to tape.

b.1 Hardware Requirements

b.2 Software Requirements

Tape billers need a software program capable of formatting an electronic data file in the:

Note: After creation of the electronic data file, it is copied onto a magnetic tape or cartridge and mailed to Medicare along with a tape transmittal form. After the claim data is loaded into Medicare's processing system, the tapes or cartridges are returned to the biller.

10.5 Gold List

If you are interested in a complete office management system, you may want to take advantage of the Gold List and certified Vendors offered by EDI Services. The Gold List is compiled of approved Medicare vendors, billing services, and clearinghouses committed to more growth, better products, and top-notch service.

10.6 Medicare Free Software

a. Medicare Claims Express (MCE)
MCE is a basic claims submission package which formats claim data files and transmits in the American National Standards Institute (ANSI) ASC X12. The software is provided with no license fee charge. MCE software is updated as needed to comply with changes in the Medicare program and to add enhanced features. All Medicare electronic reports can be retrieved easily with MCE. The program is written for use with Microsoft WindowsTM or Windows 95 or 98
TM. The MCE program is not intended for use with a network.

10.7 Authorization Procedures

Once the important decisions about hardware, software, and submission mode have been made, the biller must complete a Medicare Electronic Data Interchange (EDI) Enrollment form. EDI Services processes the form and assigns each biller an electronic source identification and login number. You must complete an EDI Enrollment form with a physician's signature for each individual provider who will be billing under the assigned source number. If billing under a group provider identification number, complete only one EDI Enrollment form. Once the form is processed, the biller receives written confirmation of the assigned electronic source identification, login number and telephone number to transmit (when applicable).

10.8 Testing Procedures

Upon receipt of the electronic source identification number and login identification, you are ready to initiate the testing process. Medicare requires testing to ensure the electronic claim data is accurate and complete, that the software is compatible with our systems, and that the modem is working with proper protocols. The time required for the testing process is determined, in part, by the accuracy of the test claim information submitted. During the testing process, we strongly recommend that you continue to submit paper claims until you receive final approval from the EDI Services department.

Claims submitted for testing should include a variety of procedures applicable to your practice and specialty. For participating physicians, at least one test claim should report the Medigap insurance information including the 5-digit code. Please reference Chapter 8, section 8.5

An EDI Analyst will call your contact person listed on the EDI Enrollment form with the test results. If the test is successful, the biller will receive final approval to begin submitting claims electronically. Additional test submissions may be required if the test submission is unsuccessful.

a. Modem Testing

a.1 Modem Testing Requires:
a minimum of 10 claims per provider

b. Magnetic Tape/Cartridge Testing

b.1 Magnetic Tape/Cartridge Testing Requires:

c. Medicare Claims Express (MCE) Testing

c.1 Medicare Claims Express Testing Requires:

10.9 Electronic Reports

Medicare provides several informational reports to electronic billers. These reports will assist you in streamlining your office activities for efficiency and enhanced productivity.

a. Flat File Functional Acknowledgement
Immediately after transmitting a file, you will be able to retrieve a flat file functional acknowledgement verifying our receipt of your claims. If the acknowledgement reflects an accepted file/batch/claim, this means that Medicare received the entire file and it will be forwarded to the second level of edits. If the acknowledgement reflects a rejected file/batch/claim, this means the claim data is either incorrect or incomplete. The biller must correct the file and retransmit the file to Medicare.

For electronic billers utilizing the American National Standards Institute (ANSI) ASC X12 Format, a Functional Acknowledgment will be received in lieu of a flat file functional acknowledgement, if requested.

The acknowledgement is retained in our system for 5 working days. Please refer to appendix K , EDI Xplanations, for technical information regarding possible errors listed on the acknowledgement.

b. Submission Summary Report

Accepted claim files are subjected to a second set of edits in Medicare's computer system. The Submission Summary Report is generated after the claims go through an edit cycle. This report is created approximately 24 hours after your transmission is received for your electronic retrieval. To electronically retrieve this vital report, dial into Direct Access Services Electronic Mail Claims System and utilize the option "acquire 5001/5004 report" from the main menu.

If this report states, "action taken: file accepted," the biller's claims are sent onto Medicare's claim processing system. If the report states, "action taken: file rejected," the biller must correct the identified errors and retransmit the file or rejected claims to Medicare.

The Submission Summary Report is retained in our system for 5 working days. Please refer to appendix K , EDI Xplanations, for technical information regarding possible errors listed on the Submission Summary Report.

c. Daily Electronic Remittance Advice (ERA)

Daily Electronic Remittance Advice (ERA) is for electronoc dial-up retrieval only. It offers "paperless" payment vouchers which replace the current Standard Paper Remittance (SPR) that accompanies your Medicare checks. Daily ERA is generated as payments are made and can be retrieved up to five working dyas after the creation date. If no claims finalize on a particular day, daily ERA will not be posted for that day. Daily ERA users with a practice management system may use daily ERA for posting of accounts receivables also.

Effective August 1, 2000, providers receiving ERA will no longer receive SPR.

Effective July 1, 2000, providers enrolling for ERA will continue to receive the SPR for a 30-day grace period. After the grace period expires, the SPR will be suppressed.

The Daily ERA is retained in our system for five working days. Questions concerning the Medicare electronic reports may be directed to EDI Services.

Questions concerning the Medicare electronic reports may be directed to EDI Services.

10.10 Medicare's Value-Added EDI Services

a. Electronic Funds Transfer (EFT)
Electronic Funds Transfer (EFT) is the quick and easy way to have Medicare payments deposited directly into your bank account. It eliminates paperwork and saves time by reducing routine banking.

Upon completion of the authorization process and a successful test phase, Medicare payment information is transmitted to the Bank One, a clearinghouse bank. In turn, Bank One transmits funds to the Federal Reserve Bank, who places the funds into the provider's bank account. The provider will be able to draw from these funds within three bank working days after Medicare transmits the payment information to the clearinghouse.

Note: EFT if available to both paper and electronic billers.

10.11 Medicare Provider Inquiry Plus (MPIplus)

Medicare Provider Inquiry Plus (MPIplus) is a free value-added communications package that allows you to dial in for direct access to Medicare. MPIplus allows you to:

All of these services are available to Medicare participating providers. To acquire the MPIplus communications package, please call EDI Services at (717) 763-6722, press option 1 for an MPIplus agreement.

10.12 Beneficiary Eligibility Inquiry

Beneficiary Eligibility Inquiry is a new enhancement that will allow you to send an inquiry to Medicare to verify beneficiary entitlement and deductible information for Medicare Part B. The inquiry will be handled in a delayed "batch" environment which means that the inquires are collected all day and then sent in one "batch" through the overnight computer cycle. A response to your inquiry will be available to you 24 hours after your inquiry is received. This information will only be released to providers for the purpose of preparing an accurate claim.

In order to be eligible for electronic Beneficiary Eligibility Inquiry, you must meet the following criteria:

To utilize this feature, the electronic biller will transmit a file with up to 99 specified beneficiary inquiries. The following information represents the minimum data elements required to identify the beneficiary when making the inquiry:

The following beneficiary information will be available to you 24 hours after your inquiry is received. Remember: this
information should only be used for routine preparation of accurate Medicare claims:

1. HMO Name
2. HMO ZIP Code
3. HMO Code (Cost or Risk)
4. Entitlement Date
5. Termination Date

Note: For more information about the value-added services/products available to electronic customers, call EDI Services at (717) 763-6722, press option 1. For detailed technical specifications required for programing of Beneficiary Eligibility Inquiry, contact EDI Services at (717) 763-6722, press option 1.

10.13 Submitting Medical Documentation For Electronic Claims

Follow these steps when forwarding medical documentation for electronic claims:

1. At least seven days prior to your electronic claim submission, mail all pertinent medical documentation:

2. All documentation must have an attachment that clearly indicatespatient name, Health Insurance Claim (HIC) Number, Date of Service, and your Medicare Provider Identification Number (PIN).

3. The statement "RECORDS SENT" must be entered in the Narravtive Record. Please refer to the following chart for location:

National Standard Format (NSF) American National Standard Institute
Record HAO
Position 40-320
Segment NTE
Data Element 02
Note: Only send medical documentation when necessary for the adjudication of procedures/services that are unusual or require such documentaion.


10.14 Applications

To request an application form to become a Medicare electronic customer, to receive Medicare free software and/or to obtain the many other value-added services

Note: For legal reasons, forms sent to EDI Services must be one page, double-sided and contain the providerís original signature or the form will be returned as unprocessable.
10.15 Who to Call for Help?

Are you an electronic biller and not sure who to contact when you have a question? Here are some tips to assist you!

Call your Software/Hardware Vendor if:

Call EDI Services

a) Flat File Funtional Acknowledgement or ANSI 997 Functional Acknowledgement
b) Submission Analysis Report (5001-5004)
c) Reconciliation, Electronic Remittance Advice (ERA)

a) Medicare Claims Express (MCE)
b) Medicare Provider Inquiry plus (MPIplus)
c) Beneficiary Eligibility Inquiry

Call the Audio Response Unit; for:

Call Provider Services; for:

Call Provider Enrollment Services; at: