EDI 820 Payment Order/Remittance Advice

The X12 820 transaction set provides the EDI format for transmitting information relating to payments. It is typically used in conjunction with an electronic transfer of funds for payment of goods, insurance premiums or other transactions. The actual funds transfer is often coordinated through the Automated Clearinghouse (ACH) system, and an 820 may be effectively wrapped in an ACH banking transaction. The 820 transaction is used in a number of situations:

• By businesses to provide instructions to banks for making a payment, such as a funds transfer, to a payee
• By businesses directly to individual suppliers to communicate the details of a pending payment, including adjustments reflected in the payment
• By companies providing premium payment information to health insurance plans

The information provided in an 820 document includes payer and payee identification, bank and account IDs, invoice number(s), adjustments from an invoice, billed and paid amounts. This information allows the suppliers and health plans to reconcile payments they receive against invoices they have issued. In healthcare, the 820 is similar to the EDI 835 transaction set. The 820 is specifically for plan sponsors – that is, companies providing healthcare benefits to their employees – to transmit information on premium payments to the health plans. The 835 is used by the health plans for transmitting information on payments to healthcare providers. With so many rules, and constant changes, it may be hard to keep it all straight. To get you where you need to go, don’t hesitate to contact 1EDISource Professional Services. With more than 20 years of experience building and implementing EDI solutions, we have the knowhow and the tools to help you. Contact 1EDISource to discuss your needs.