An entity error occurs when the entity codes for one or more of the persons or things that are the focus of the claim are incorrect. A code identifies the role of a person in the claim (for example, billing provider or rendering provider), and may provide information about the person or thing in question.
Determining the role of the person or thing is often difficult. Messages associated with claim rejections provide little to no useful information, if any, to the biller. A generic term such as “entity” is often provided, and numbers are used to indicate providers and persons. These numbers often lead the biller to many unrelated records.
Breaking the role and associated information into smaller components may help simplify the identification of the information questioned.
Remember the following:
- A rendering provider is assigned code 82 and a billing provider is assigned code 85.
- An entity code identifies a role. An identification number (NPI, TIN, Member ID) identifies a person or thing.
- A claim may be “sent” but require an acceptance check. A full response to a question may depend on what is being checked.
Start With the Party Named in the Message
Medical claims may include several parties. The billing group employs the practitioners. The beneficiary receives the services. The insurance company processes the claim. The subscriber is typically a spouse or parent.
To be meaningfully interpretable to the receiver, each piece of information in the claim should include the name of the role it represents. An NPI, by itself, does not indicate whether the practitioner rendered the service, ordered the service, or supervised the service.
It is possible for a practitioner to render a service and refer a patient to a specialist on the same day. The practitioner would be represented by a different claim role for each service. The entity code refers to the role the service provider played for that service.
For a medical billing services, the entity code implies the role the service provider played in rendering the service. The entity code helps provide focus for the billing service.
Making numerous fields for claim information available to a claim processor does not assist in claim processing if the field information is not relevant to the claim being processed. There are other constraints such as coverage and authorization. The claim processor may identify the provider of the service, but that does not determine the paying provider.
The Codes Worth Keeping Beside Your Work Queue
You don’t need to memorize an entire code set to investigate common entity errors. A short reference gives you a useful starting point.
| Entity code | Role identified | Record to review first |
|---|---|---|
| 85 | Billing provider | Practice or individual billing profile |
| 82 | Rendering provider | Practitioner reported for the service |
| IL | Insured or subscriber | Subscriber and insurance record |
| QC | Patient | Patient demographics and relationship information |
| PR | Payer | Insurance destination and payer setup |
| DN | Referring provider | Referring practitioner details |
| DK | Ordering physician | Ordering practitioner details |
| DQ | Supervising physician | Supervising practitioner details |
| 77 | Service location | Office or facility location record |
| 71 | Attending physician | Attending physician information, where applicable |
| 72 | Operating physician | Operating physician information, where applicable |
These codes belong in specific transaction contexts. The table does not mean every claim needs every role. Report the parties required for the service and claim type.
Billing provider and rendering provider: the frequent mix-up
Many group practices use an organizational NPI to bill services and assign an individual NPI to the clinician who renders the service. In these cases, the individual and organization NPIs are associated with different records.
There are several exceptions to the rule. A given service may be rendered by more than one practitioner. Some services may be bundled. In the case of a medical director, the rules for reporting the practitioner may differ from other employees of the group. Determine the exact situation before making any changes to the NPI record.
There are a number of other exceptions to the general case that the billing provider is the same as the individual who renders the service. Outsourced medical billing services companies, for example, may bill on behalf of a practice, but would typically not be considered the billing provider of the rendered service.
Patient and subscriber: one person or two records
It is important to be able to distinguish between the patient and the subscriber who is receiving coverage, especially when the coverage is extended to include additional family members.
For example, a subscriber may be a child under a parent’s subscriber record. When a claim is processed, the child is identified as a patient, and the parent is identified as the subscriber. The relationship between a parent and a child is reported independently from the role of the entity.
The electronic structure of a claim is determined by the terms of the health plan. Not all health plans require family members to be identified as individual patients. Therefore, it is important to review the health plan to determine the membership and reporting requirements. If a health plan requires family members to be reported individually, then a patient record should be created for each family member.
Separate the Role From the Number Beside It
An entity code is not a unique identifier assigned to your practice. Other unassociated practices can share the same entity code.
Other practice identifiers exist and are used to establish a practice’s legitimate identity. Some of these identifiers include the NPI, the Tax ID Number, the practice name, and the practice’s mailing address.
| Claim detail | Its job | A useful distinction |
|---|---|---|
| Entity code | Identifies a role within the transaction | 82 means rendering provider |
| NPI | Identifies a healthcare provider or organization | The identifier must belong to the party reported |
| TIN | Identifies a taxpayer | The appropriate tax ID depends on the billing arrangement |
| EIN | Serves as one type of tax identification number | EIN and TIN are not universally interchangeable terms |
| Payer ID | Identifies a payer destination or record in the EDI setup | Select the correct destination for the transaction |
| Member ID | Identifies an insurance membership or coverage record | Verify it against the applicable plan |
| Taxonomy code | Describes provider classification or specialty | It does not replace an NPI or role code |
This makes it less likely that role code 85 will be mistakenly adjusted. The issue will always be with the identifier associated with that role.
For the first time, you will have to think about the sequencing of your implementation. You will have to add and activate identifiers, and then complete your billing integration. You will not have to separately submit any requests for assignment of role code 85.
Read the Entire Rejection Before Editing Anything
The phrase “this code requires use of an entity code” is typically seen with a claim status code. This means that there is a need for a code to identify the party for which the status is being conveyed.
This is typically not the case when a role code has not been entered on a claim.
In some instances, a role code may not need to be entered on a claim to process it. An example is a commission claim for a veteran where there is no role code for “veteran” to be entered on the claim. In such a case, the status of the claim may state that the claim requires the use of an entity code.
Consider this simplified combination:
| Response component | Meaning |
|---|---|
| A3 | The claim was returned as unprocessable and did not enter adjudication |
| 562 | The status detail concerns an entity’s NPI |
| 85 | The affected entity is the billing provider |
These values point to the billing provider’s NPI, but do not determine if the NPI was missing, was assigned to another provider, or did not pass a payer’s validation checks. You need to review the surrounding data and message for clarification.
If the Entity value was 82, your focus would be on the rendering provider.
Pay special attention to lone numbers. One number can be assigned more than one meaning in different code sets. The interpretation of a number is dependant on the context in which it is used.
For example, in ICD-10 codes, the number ‘1’ is assigned a unique meaning for each code. However, in different code sets, number ‘1’ can represent multiple meanings. So, in order to decipher the true meaning of a number, it is very important to evaluate the context in which it is provided.
Identify the system that stopped the claim
A clearinghouse can stop a claim from being sent to the insurance company. A payer can also reject a claim during its intake. While these situations may appear similar in your work queue, the response source will tell you who to contact for more information.
An example of this would be a payer rejecting a claim due to the member being on the payer’s enrolled population. In this case, the claim should be adjusted accordingly and the member’s enrolled status should be verified. If the claim is sent repeatedly, it will not resolve the issue.
Another example would be a clearinghouse stopping the claim due to the claim format not being correct. In this case, the clearinghouse support will need to determine the correct field and the claim will need to be corrected. Sending the claim repeatedly will not resolve this.
Establish whether adjudication began
The course of action that follows a rejection before a decision (adjudication) is different from the course of action after a claim has been denied (processed). Claimants must review the remittance advice or acknowledgment to determine whether to request a resubmission, correction, reconsideration, or appeal.
An example of a 999 acknowledgment would be a claim number assigned to a particular case. A 277CA is an acknowledgment sent to advise claimants that their claims have been received. Just because an acknowledgment has been sent or a claim number assigned, does not mean the case will be processed or payment will be made.
While pursuing a case, it is important to be mindful of time limits. In case of a denied claim, it is important to retain the record of the claim that was originally submitted and review the payer’s policies rather than assume that the first time a claim was denied, the time limit for filing was protected.
Find the Information in the Electronic Claim
An electronic professional claim uses the 837P transaction. Information is organized into loops and segments. Loops and segments allow receiving systems to identify specific details of various parties.
Information in a loop is related. An example of a segment that carries specific information in a loop is the NM1 segment. The segment carries, for example, an individual’s name and identification in an insurance claim. The location of the segment is also important in identifying the segment. For example, stating “There is a segmentation error in loop 100” is not as useful as stating “There is a segmentation error in loop 100, and the error is in the second occurrence of the NM1 segment.”
Each segment and loop in an 837 has a specific purpose. Knowledge of these purposed aids in determining errors in segmentation and looping.
| Party | Common 837P location |
|---|---|
| Billing provider | 2010AA |
| Subscriber | 2010BA |
| Payer | 2010BB |
| Separate patient, when required | 2010CA |
| Referring provider at claim level | 2310A |
| Rendering provider | 2310B, or 2420A at service-line level |
| Service facility at claim level | 2310C |
Claim level and service-line records require separate considerations. It is possible for a provider to look correct at the claim level, and for an individual service line record to contain an unintended override.
Four NM1 fields that explain different parts of the record
The fields inside a provider NM1 segment have separate purposes:
- NM101 identifies the entity role.
- NM102 describes whether the entity is a person or non-person.
- NM108 identifies the type of identifier that follows.
- NM109 contains that identifier.
In the applicable provider segment, the following number can be assigned an NPI by XX.
XX should not interpret 1 and 2 in NM102 as patient and subscriber, respectively. They are to be interpreted as person and non-person. They are not to be interchangeably used with NPI Type 1 and Type 2 in all instances. Differences between the services offered and the locations where the services are rendered are to be reported.
Match the Paper Form to the Correct Information
The CMS-1500 provides a number of boxes, each of which is prelabeled. There is no box that permits the entrant to fill in a generic role code for electronic records.
| Information needed | CMS-1500 location |
|---|---|
| Insured’s ID number | 1a |
| Patient’s name | 2 |
| Insured’s name | 4 |
| Patient relationship to insured | 6 |
| Referring or other applicable practitioner and NPI | 17 and 17b |
| Rendering provider NPI, subject to billing instructions | Unshaded 24J |
| Federal tax ID | 25 |
| Service facility information and applicable NPI | 32 and 32a |
| Billing provider information and NPI | 33 and 33a |
The billing provider’s NPI belongs in 33a. As explained in the Pay and Chase section of the Instructions to Filers, Box 33b is not a general-purpose field for entity code 85. Therefore, any other identifiers and/or qualifiers for this field would be in the directions to the payer and claim.
Providers, as defined in professional terms, differ from institutions. Institutional claims are typically filed electronically using the 837I and via paper CMS-1450 (UB-04) claim forms. Professional claims are filed via paper forms. Institutional claims do not use institutional provider locations, and therefore, providing a loop number on an 837P for an institutional claim will not provide the information being sought.
Work Through the Error That Was Actually Reported
Most useful corrections begin with a narrow question: which piece of this party’s information failed the check?
Provider identifier or enrollment mismatch
Review the submitted NPI and legal name. Assess the payer to ensure they have appropriately established the tax relationship. Check the enrollment status. If the NPI is valid but there is no tax relationship established between the billing group and the provider, modifying claim numbers is not a solution.
Also check the date of service. It is possible that the provider was active on that date but the claim is for a different time period. Check the effective dates of enrollment and determine if further enrollment follow-up or data entry is warranted.
Subscriber or member details do not match
Check member ID, subscriber information, plan, and coverage dates. Look for old insurance records, attached to the encounter, which may show dependent coverage. Also check the subscriber setup to see if the dependent was entered under the correct subscriber.
An eligibility response may be used to pull the insurance record and is not a guarantee that all the services on the claim will be covered or paid.
Service location or address is incorrect
Compare the reported location to the actual encounter and the payer records to determine if the addresses are in the same general location. Different addresses are permitted.
There are different uses for billing and service locations. Unless the difference is considerable, differences in address elements, including ZIP codes, are permissible.
The ZIP+4 code is often sufficient to meet a nine digit ZIP code requirement. If additional digits are entered to reach the nine digit requirement, the ZIP+4 code may no longer be correct.
Referring, ordering, or supervising details are missing
Ensure that the requested role is appropriate for the service being performed. Once verified, provide the requested information using the practitioner’s record.
A false positive edit may occur when a field is populated with the NPI of an alternative practitioner to satisfy an edit check. Format check editing ensures that required elements of a claim are in the correct location; however, information on a claim may still be factually incorrect.
A Medicare identifier is confused with a claim number
Routine Medicare billing requires the use of the Medicare Beneficiary Identifier (MBI). A beneficiary identifier is used to identify an individual’s record in the Medicare system. A claim control number is assigned by the payer and is used to identify an individual claim.
Each of these numbers serves a different purpose. For example, an error in patient identification will not be resolved by repeating the claim control number in an unrelated location.
A Correction Process Your Team Can Repeat
Use the same sequence for each unresolved entity error. It makes the work easier to hand off and leaves a clear record of the correction.
- Capture the response. Save the reporting source, claim reference, service date, category, status detail, entity value, and explanatory text.
- Identify the affected role. Narrow the investigation to the provider, subscriber, patient, payer, or location named in the response.
- Inspect the submitted version. Compare the actual transmitted claim with the current account. Record any differences.
- Verify the questioned detail. Check the relevant membership, provider, enrollment, or encounter information.
- Correct the source record. Update the patient account, provider profile, location setup, or claim mapping responsible for the error.
- Choose the proper submission route. Follow the process appropriate to the claim’s status. Do not automatically label every rejected claim as a replacement.
- Confirm the next acknowledgment. Establish whether the corrected claim entered processing, then continue routine follow-up.
When a claim is handed off to a different team, it should be assigned an owner. “Check credentialing” tells the next person very little. The relevant payer, provider, and date should be included as well as the resolution and the reasoning for needing the confirmation.
Three Situations That Reveal the Source of the Problem
These fictional training examples reflect common billing workflows.
A group NPI fills the rendering field
The addition of a clinician to a practice results in the provider template filling the rendering field with the group’s NPI. Consequently, a series of claims are denied for rendering-provider issues.
Prior to making changes to the template, the billing team assesses the encounter data, determining reporting requirements and checking the enrollment data of the rendering provider. Affected claims are corrected, and subsequent acceptance reports are reviewed. Adjustments to the shared service setup prevent the error from occurring for subsequent patient visits.
The screen is right, but the submitted claim is wrong
Once a claim has been sent, changes to the patient’s insurance record cannot be guarantyed to post to the payer. This often results in a rejected claim. When the billing staff receives the rejection, they will often look at the patient information on the claim status screen, and, if it appears correct, will assume the payer has processed the claim correctly and denied payment.
The claim status function allows the billing user to review the details of the claim that was transmitted. Usually, the old subscriber record is shown. The billing user verifies the record to determine if the service was medically necessary. If so, the user will ensure the account information is selected and initiate transmission of the amended claim.
A new office carries another location’s details
A branch office opens with the same billing profile as the main office. Claims from the branch office begin reporting service location errors.
Staff reviews the office’s billing enrollment and checking place of service reporting to make sure they are completed correctly. Staff update the location profile to be accurate and identify claims which were reported with an erroneous location.
It is possible that, in the past, claims has been posted to the payer without staff resolving the location error. This would explain the continuous exposure to the same problem.
Keep Repeated Errors From Becoming Routine
When new clinicians are registered, update or change their location, review their profiles to confirm accuracy. The same is true for active provider data, including insurance information. Changes in employment or insurance information should trigger an update of the provider records owned by the entity to ensure all payment and access records are accurately updated.
Errors should be tracked to specify payer, entity role, and message. One message may impact multiple claims, therefore focusing on total denials may conceal configuration issues.
For quality and assurance purposes, claim files and/or screenshots may be retained. However, Role codes and/or User IDs, do not ensure compliance with the Entity’s privacy and security policies and therefore cannot be disclosed. Fictitious information may be used to fulfill training requirements. Patient information may be disclosed only to the extent required to resolve an issue or to fulfill an obligation to ensure the accuracy of the information.
Questions That Come Up During Claim Follow-Up
Can I fix an entity code 85 error by changing the rendering NPI?
Entity code 85 points to the billing provider. Review that record and the accompanying message first. Change rendering information only if the investigation shows it is also incorrect.
Do I need a separate entity code for each clinician?
Clinicians reported in the same role use the same applicable role code. Their individual identities are carried by the required identifiers and other claim details.
Can a valid NPI still produce an entity-related rejection?
Yes. A valid NPI can appear in the wrong role or be associated with information that does not match the payer’s enrollment records. Verify the whole affected record.
Should I enter entity code 85 in CMS-1500 box 33b?
No. Box 33b is not a universal field for entity role code 85. Billing provider details belong in box 33, and the billing NPI belongs in 33a.
Should every rejected claim be resubmitted as a corrected claim?
No. The required route depends on whether the claim entered adjudication and the payer’s instructions. A replacement claim is not the automatic solution to every intake rejection.
Who should handle an error that keeps coming back?
Start with the exact message and its source. Software mapping issues may need vendor support, clearinghouse edits may need clearinghouse clarification, and enrollment discrepancies may need payer or enrollment-team follow-up.
Before You Send the Claim Again
This information should help you understand the term “entity code” in the context of medical billing. Next time you come across a term like this, find the role mentioned in the answer, review the surrounding data in the case management system, and make sure the correction was submitted with the claim.
Continuously reoccurring errors require a different approach. The provider setup, claim information, and rejection follow-up should be evaluated by the billing team in combination. Determine which of the reoccurring errors requires the most time or resources to resolve and eliminate the source of the error.
Before you can mark this task as complete, you must:
- Document the response.
- Determine the source of the error.
- Verify the claim in question.
- Review and correct the source system.
- Identify similar issues on other claims.
- Ensure the method of submission is in accordance with the payer’s requirements.
- Obtain a response from the payer to confirm the claim status.
