What an 835 Feed Actually Tells You About Cash

Your 835 feed is the most predictive cash signal you have. It tells you, in near real time, which claims have been paid, which have been adjusted, which have been denied, and roughly when the money will land in your account.

Most healthcare finance teams use the 835 feed for posting and reconciliation. They do not use it for forecasting. Which is strange, because the data is right there and it answers exactly the question your 13-week cash forecast is trying to answer.

The Three Components of a Forecast from 835

1. Open AR by payer, aged. Pull from your billing system. This is the inventory of expected cash.

2. Per-payer payment velocity. Calculate from trailing 90 days of 835 history. Express as "days from claim to remit" per payer. This converts AR into expected timing.

3. Per-payer denial and adjustment rate. Calculate from the same 90 days. This converts gross AR into net expected cash.

Multiply: open AR by payer x probability of payment x velocity by payer = expected cash by week. Sum across payers. You have a 13-week forecast that is grounded in actual remit history, not gut feel.

What Beats Spreadsheet-Based Forecasting

A spreadsheet forecast built from monthly aggregate AR is wrong by 10 to 20 percent on any given week. A remit-feed-based forecast is typically within 3 to 5 percent. The difference is real money when you are managing reserves and timing M&A.

Your treasury team should run this every Monday morning. Not once a quarter.