How to read an ERA, line by line.

What an ERA is

An electronic remittance advice is the payer’s explanation of a payment, sent as a standard X12 835 file. One ERA usually covers every claim the payer finished for your practice in that payment cycle: several patients, several dates of service, payments, reductions and denials together. Your practice management system or clearinghouse turns the file into a readable report, but the fields underneath are the same for every payer.

You enroll for ERAs with each payer, usually through your clearinghouse, and separately from enrolling for electronic payments. Until both are in place you get a paper remittance in the mail and a check, or a deposit with nothing to explain it.

An ERA has three layers. Read them from the top down.

Start at the top: the payment

The first segments describe the money, not the claims.

• Total payment (BPR02): the amount of this payment, across every claim in the file.
• Payment method (BPR04): ACH for an electronic deposit, CHK for a paper check, NON when no money moves, for instance when every claim in the file was denied or the payment was fully offset.
• Trace number (TRN02): the check number or the electronic payment’s trace number. It is the key that ties this ERA to a deposit in your bank account.
• Payer and payee: who paid, and which provider or group the payment is for. Check that the payee NPI and tax ID are yours before you post anything.

Write the total and the trace number down first. You need both when you match the deposit to the ERA.

Then each claim

Each claim in the file opens with a CLP segment. Five of its fields do most of the work:

Then each service line

Under each claim, an SVC segment reports one billed line: the procedure code and modifiers, your charge, the payment on that line and the units. Around it sit the date of service, the allowed amount and the adjustments that explain the difference. Here is one CMT line, in the raw file and in plain words. The amounts are an example.

SVC*HC:98941*65*33.6**1~
DTM*472*20260914~
CAS*CO*45*23~
CAS*PR*2*8.4~
AMT*B6*42~

• SVC: CMT, three to four regions (98941), charged $65.00, paid $33.60, one unit.
• DTM*472: date of service, September 14, 2026.
• CAS*CO*45: $23.00 contractual adjustment. Your charge exceeds the payer’s fee schedule for your contract, so you write the $23.00 off.
• CAS*PR*2: $8.40 coinsurance. The patient owes it.
• AMT*B6: the allowed amount, $42.00.

Every line balances the same way: charge minus every adjustment equals the amount paid. Here, $65.00 − $23.00 − $8.40 = $33.60. The allowed amount is what the payer pays and the patient owes together: $33.60 + $8.40 = $42.00. When a line does not balance in your report, a field was dropped on the way in, and the posting cannot be trusted until you find it.

Compare the allowed amount to the rate in your contract for that code. A CO-45 adjustment is only correct if the allowed amount matches what you agreed to. If it comes in lower, the payer underpaid, and you have a question for the payer, not a write-off.

Adjustments: a group code plus a reason code

Every CAS segment pairs a group code with a reason code and an amount. Read them together. The group code tells you who carries the amount:

The reason code, a claim adjustment reason code or CARC, says why. The same reason code can sit under different groups. A non-covered charge (96) reported as CO-96 is yours to absorb; reported as PR-96, the patient owes it. The group changes who pays, so never read the number alone.

The guide to chiropractic denial codes covers the reason codes you will see most, and the guide to what the patient owes covers the PR amounts.

Remark codes

Some lines carry a remittance advice remark code, or RARC, in an LQ*HE segment. Remark codes start with N, M or MA. A reason code says what happened to the money; a remark code adds the detail you need to act. CO-16 says the claim lacks information or has a billing error, and payers must send at least one remark code with it to say which. N290, for instance, points to a missing or invalid rendering provider identifier. Read the remark before you work the denial.

Provider-level adjustments

At the bottom of the file, a PLB segment can adjust the payment for reasons that belong to no claim in this ERA. The common ones:

• Overpayment recovery (WO): the payer takes back money it paid on an earlier claim, often months later.
• Interest (L6): the payer adds interest it owes on a claim it paid late.
• Forward balance (FB): an amount carried from or to another payment.

The whole file balances too. The total payment equals the sum of the claim payments minus the provider-level adjustments, where an amount that reduces the payment is positive and an amount that adds to it, such as interest, is negative. When your deposit is smaller than the claims you posted, look here first. Each recovery should name the claim it came from; find that claim and post the recovery against it, or the original visit stays overstated as paid.

A ten-minute reading routine

For each ERA, in this order:

1. Match the total payment and trace number to a deposit or a check.
2. Open every claim with status 4 (denied) or 22 (reversed).
3. Open every adjustment that is not CO-45 or a PR amount, and read its remark code.
4. Check each allowed amount against your contract rate for that code.
5. Move each PR amount to the patient’s ledger, or to the second payer’s claim.
6. Trace each provider-level adjustment back to the claim it belongs to.

Anything left over after step six is a question for the payer, and it stays open until you have an answer.

How Claims Native reads each ERA

We post each payment into your EHR and keep every adjustment with it. We check each payment against the payer’s explanation and your contract. When a payment is short and your contract supports more, the difference stays open, and we go back to the payer with a corrected claim, a reconsideration or an appeal. A person reviews every reconsideration, appeal and payer dispute before it goes out. A short payment does not become a patient bill by default.

Sources

• X12, Claim Adjustment Reason Codes. X12 maintains the code list and updates it three times a year; check the current wording there.
• X12, Claim Adjustment Group Codes.
• X12, Remittance Advice Remark Codes.
• X12, request for interpretation 2661: TRN02 in the 835.
• CMS, Medicare Claims Processing Manual, Chapter 22: Remittance Advice.
• CGS, Medicare 835 companion guide.