Medicare Remittance Advice

WhAt Is An RA?

A Remittance Advice (RA) is a notice of payments and adjustments sent to providers, billers, and suppliers. After a claim has been received and processed, a Medicare contractor produces the RA, which may serve as a companion to a claim payment(s) or as an explanation when there is no payment. The RA explains the reimbursement decisions including the reasons for payments and adjustments of processed claims.

WhAt ARE thE UsEs FOR thE RA?

Providers use the RA to post payments and to review claim adjustments. The RA also contains detailed and specific claim decision information. An adjustment may be made for any number of reasons. These reasons are identified on the RA through standardized code sets which include Group Codes, Claim Adjustment Reason Codes, and RA Remark Codes.


A provider may receive an RA from Medicare transmitted in an electronic format, called the Electronic Remittance Advice (ERA), or in a paper format, called the Standard Paper Remittance Advice (SPR). Although the information featured on the ERA and SPR is similar, the two formats are arranged differently, and the ERA offers some data and administrative efficiencies not available in an SPR.

the Importance of the ERA

The ERA must be produced in the current Health Insurance Portability and Accountability Act of 1996 (HIPAA)-compliant Accredited Standards Committee (ASC) X12N 835 004010A1 format. The Secretary of the Department of Health & Human Services (DHHS) adopted ASC X12N 835 version 004010 as the standard for ERA in August 2000. In February 2003, an addendum was added and version 004010A1 became the standard.


Using the ERA saves time and increases productivity by providing electronic payment adjustment information that is portable, reusable, retrievable, and storable. The ERA can be exchanged between partners with much greater ease than a paper remittance. Advantages to using the ERA include:•Faster communication and payment notification•Faster account reconciliation through electronic posting•Less paper generated•Lower operating costs•More detailed information•Access to data in a variety of formats through free, Medicare-supported software

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