How it works
When a payer processes claims, it sends an 835 file listing each claim, the amount billed, the allowed amount, the payment and every adjustment with its group, reason and remark codes. The money itself usually arrives separately by electronic funds transfer (EFT); a trace number links the payment to the remittance.
Why it matters
ERAs allow payments to be posted automatically and accurately, and they carry the denial and adjustment detail needed to work denials and check payments against contracts. Practices that still post from paper explanations of benefits lose time and miss detail.
Example
An EFT deposit cannot be matched to any remittance. Using the trace number, the billing team finds the 835 for that payment and posts it — rather than leaving unapplied cash sitting in the account.