Healthcare EDI Standards - An Integral Part of Today's Medical System

Healthcare is one industry where Electronic Data Interchange (EDI) plays an important role. Uniform EDI standards in the industry facilitate many basic and complex healthcare business processes, including claims transactions, remittance advices and eligibility and enrollment transactions.

Uniform EDI healthcare standards go back a long time as it has been a long process of establishing standards that work for all players in the industry. Initial attempts for voluntary compliance were initiated with the establishment of the Workgroup for Electronic Data Interchange (WEDI) in 1993 which suggested many changes.

As with any major shift in a large, complex industry like healthcare, it was slow going. To speed it along, many of WEDI's recommendations became mandatory when the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was passed by Congress and signed into law by President Bill Clinton.

The HIPAA law directed the U.S. Department of Health and Human Services to mandate standards for both automating business processes in the healthcare industry while keeping patient records secure and private.

Healthcare EDI uses standard transaction sets rather than paper forms to organize information

To help you understand how EDI standards work in the healthcare industry, let's explore the processes doctors use to submit claims to insurers and get paid for their services. Below is a general outline of how EDI standards facilitate the payment of healthcare services from third-party insurers.

Doctor's Business Application or Practice Management System (PMS)

Naturally, the first step in the process is the EDI software system the doctor uses. Literally hundreds of business applications like the BizTalk server are out there to help doctors manage their practices - collectively referred to as Practice Management Systems (PMS).

PMS systems store vital information about patients. When a doctor makes a request in his PMS system, claim data is transmitted to insurance providers and payers for processing.

Translating Data

Translating claims data from the doctor into a commonly accepted EDI format is the next process in this chain. Because of the HIPAA law, payers will not accept or understand any other format.

Considering most healthcare providers had their own standards and systems prior to the inception and implementation of the HIPAA EDI standards, many healthcare providers have to map their data into EDI format before transmitting it.

Integrating Data

The importance of integrating data between a doctor's PMS and commonly accepted EDI standards cannot over stated. Mapping, a process similar to data translation, is the most common form of data integration. EDI rules are enforced by the data translation while mapping enforces the rules of the doctor's PMS system.

Mapping defines where EDI data should go in the PMS system. Once mapping is concluded, the PMS either sends or receives the EDI data.

Application Program Interface (API) is an alternative method to mapping that some modern applications include, avoiding the need to import/export. Since the API is directly connected to the business application's database, API is more efficient at integrating data than mapping.

Transporting Data

This is the final step of this particular process that harnesses EDI standards to conduct business processes - transmitting the data to the payer. Either a point-to-point (P-to-P) connection or clearinghouse is used.

P-to-P connections require the doctor to setup and maintain separate connections with each payer. Clearinghouses connect to each payer separately, only requiring a single connection from the doctor. Healthcare providers with a low volume of transactions can now use a website to enter claims into a clearinghouse or directly to a payer if they so choose.

This is just a very basic outline of the role EDI standards play in facilitating healthcare business transactions. Bookmark and check back with our EDI knowledge center soon for a more detailed list of specific EDI standards developed exclusively for the healthcare industry.

And if you're looking for experienced EDI consultants to help you harness the most efficient technology in your practice, contact Georgia EDI consultants at Innovative Architects today.