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X12 transaction guide · Healthcare and insurance

EDI 187 Premium Audit Request and Return

The X12 document used to communicate premium audit information between property and casualty insurers and premium audit service providers.

Sent by
Insurer or premium audit service provider
Received by
Premium audit service provider or insurer
Standard
ANSI ASC X12

What is an EDI 187?

The EDI 187 Premium Audit Request and Return is the ANSI X12 transaction set used to communicate premium audit information between property and casualty insurers and independent premium audit service providers.

Policies such as workers' compensation and general liability are priced on estimated payroll or sales, then audited after the policy period to calculate the final premium. The insurer requests the audit, and the audit firm returns the verified exposures by classification, from which the insurer calculates any additional or returned premium.

How the EDI 187 worksDiagram of the EDI 187 Premium Audit Request and Return. Insurer or premium audit service provider sends it to premium audit service provider or insurer. It usually starts the exchange. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment), detail: the required 2000 loop with HL (Hierarchical Level) and summary: TDS (Total Monetary Value Summary). 7 optional loops are listed by their first segment.How the EDI 187 worksPremium Audit Request and Return: who sends it, where it fits and what the standard marks required1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeEDI 187SENDERInsurer or premiumaudit service providerRECEIVERPremium audit serviceprovider or insurer997 or 999 acknowledgment back, if the partners agreeUSUALLY FOLLOWED BY997FunctionalAcknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDsISA … IEAFunctional group, ID code AEGS … GETransaction set 187ST … SEHEADINGBGNBeginning Segment+ 1 optional loop, starting with:N1DETAILRequired loop 2000 · repeatsmany timesHLHierarchical Level+ 3 optional loops, starting with:LXNM1IIISUMMARYTDSTotal Monetary ValueSummary+ 3 optional loops, starting with:ITABALN1Blue box: required loop. Optional loops are listed by the segment that starts them; when a loop is used, that first segment is required. Optional segmentsoutside loops are not drawn.Structure: required segments and loops in the X12 008010 listing for the 187. Your trading partner's implementation guide adds its own requirements.
How the EDI 187 worksDiagram of the EDI 187 Premium Audit Request and Return. Insurer or premium audit service provider sends it to premium audit service provider or insurer. It usually starts the exchange. It is usually followed by 997. Inside the ISA, GS and ST envelopes, X12 release 008010 requires, in the heading: BGN (Beginning Segment), detail: the required 2000 loop with HL (Hierarchical Level) and summary: TDS (Total Monetary Value Summary). 7 optional loops are listed by their first segment.How the EDI 187 worksPremium Audit Request and Return: who sendsit, where it fits and what the standard marksrequired1 WHERE IT FITSUSUALLY FOLLOWSStarts the exchangeEDI 187SENDERInsurer orpremium auditservice providerRECEIVERPremium auditservice provideror insurer997 or 999 acknowledgment back, if the partnersagreeUSUALLY FOLLOWED BY997Functional Acknowledgment2 WHAT X12 RELEASE 008010 REQUIRESInterchange: sender and receiver IDs (ISA… IEA)Functional group, ID code AE (GS … GE)Transaction set 187 (ST … SE)HEADINGBGNBeginning Segment+ 1 optional loop, starting with:N1DETAILRequired loop 2000 · repeatsmany timesHLHierarchical Level+ 3 optional loops, starting with:LXNM1IIISUMMARYTDSTotal Monetary ValueSummary+ 3 optional loops, starting with:ITABALN1Blue box: required loop. Optional loops are listedby the segment that starts them; when a loop isused, that first segment is required. Optionalsegments outside loops are not drawn.Structure: required segments and loops in the X12008010 listing for the 187. Your trading partner'simplementation guide adds its own requirements.

How to read this diagram: the top row shows who sends the 187, to whom, and which documents usually come before and after it. The lower part shows what X12 release 008010 itself requires: the envelopes around the 187 and the segments and loops the standard marks as required, area by area. Optional loops are listed by the segment that starts them rather than drawn in full. This is the standard's minimum, not a trading partner's requirement: each partner's implementation guide usually makes some optional loops mandatory, restricts the codes and may use a different release.

Expand diagram Download SVG

When it is used

  • Ordering premium audits at policy expiration
  • Returning audited payroll or sales by class
  • Supporting final premium calculation

Where it fits in the document flow

This document 187 Premium Audit Request and Return
Usually followed by 997 Functional Acknowledgment

Structure

Mandatory segments in the 187 (X12 release 008010)

The segments X12 release 008010 marks as mandatory at their level, in order. Segments inside optional loops are needed only when the loop is used. This is the standard's requirement, not your trading partner's: each partner's implementation guide names the release it uses, adds the optional segments it requires and restricts the values. The requirement status comes from one published X12 reference listing and has not been checked against a second source.

  • ST
  • BGN
  • N1
  • HL
  • LX
  • QTY
  • EFI
  • NM1
  • III
  • SUP
  • LQ
  • ITA
  • TDS
  • BAL
  • SE

Practical example

The 187 in practice

A contractor's workers' compensation policy expires. The insurer sends its audit firm a 187 request with the policy, period and classifications. The auditor reviews the contractor's payroll records and returns the audited payroll by class, and the insurer bills additional premium for higher-than-estimated payroll.

Implementation

Implementation considerations for the 187

  • Use the classification codes of the applicable rating system.
  • Request audits promptly after policy expiration.
  • Reconcile audited exposures with original estimates.
  • Protect policyholders' confidential business data.

How ECOM helps

Automate the 187 with ECOM

Industry

Financial Services

Secure file transfer and B2B integration for banks and financial institutions.

Solution

Financial Document Automation

Automate invoices, remittances, payment files and bank statements from capture to posting.

Solution

EDI Integration

Exchange X12 and EDIFACT documents with partners and integrate them directly with your ERP.

More general questions about EDI are answered in the EDI FAQ.

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