Chapter 1. Purpose and Business Information

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1.1 Implementation Purpose and Scope

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For the health care industry to achieve the potential administrative cost savings with Electronic Data Interchange (EDI), standards have been developed to facilitate consistent implementation by all organizations. To facilitate a smooth transition into the EDI environment, uniform implementation is critical.

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This Implementation Guide is designed to assist those sending premium payments to an insurance company, health care organization or government agency receiving premium payments using the 820 transaction set. In the dollars and data together scenario or when the RDFI (Receiving Depository Financial Institution) is reporting only payment information, the specific reporting medium and format that will be delivered to the receiver is pursuant to that receiver’s reporting service with their receiving bank RDFI.

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The 834 enrollment information data sent from the sponsor to the payer corresponds with the payment data sent in the 820 transaction. The 820 premium payment transaction contains member information previously submitted on the Benefit and Enrollment Maintenance transaction.

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