Benefits of Integrating EDI Software Solution in Healthcare Industry

EDI software in healthcare

It is imperative for the care providers to add, update, and manage a plethora of documents & medical records, health insurance reimbursements, and healthcare claims. 

Need For HIPAA EDI Integration In HealthCare

Managing immeasurable data was weary, especially when done on paper manually. Hence, the arduous and laborious paperwork was solved with a promising, reliable, and automated Electronic Data interchange system. 

The first-ever Workgroup for Electronic Data Interchange (WEDI) concerning healthcare challenges – inefficient and unreasonable costs of paperwork, was formed in 1991. 

When HIPAA was not formed, and the healthcare industry had to operate the processes manually, over 400 paper-based medical forms were used by the care providers. 

The manual process also raised concerns over privacy and security issues. The Center for Democracy and Technology when evaluating the challenge concluded that the privacy laws, federal limits, and federal rights for the access of healthcare information were not defined. 

In order to integrate EDI for a definitive and constructive outcome, HIPAA addressed the challenges faced by care providers and formed data addition, access, retrieval, and transmission standard protocol – X12.

The dedicated standard assisted healthcare by addressing the security issues along with seamless compliance. 

We will learn further how EDI integration services transformed the way healthcare manages and operates data today.  

EDI Operation Process in Health Care

EDI is a digitized method to exchange healthcare data in a standardized format. Additionally, the computer’s processable data transmission is completely secure. Care providers or financial institutions, or patients connected with the EDI system can retrieve information securely as well as respond to any request safely. How EDI transactions take place is mentioned below in the steps.

Steps of EDI Transaction

  • The exchange of data between the payers and the institution through EDI undergoes a platform, clearinghouse. Clearinghouse facilitates both parties with the relevant information. 
  • Any EDI transaction begins with inquiring about healthcare-related information from the care provider that ends with a response to the inquiry.
  • Certain fields are mandatory to fill in order to complete the inquiry process and make the response as expected, such as Payer’s ID, date of birth, and member ID number.
  • All the requisite information goes directly to the payer via clearinghouse (contracted by the service provider).
  • After the retrieval of the necessary details, the payer sends the response to the clearinghouse. 
  • Clear housing then responds back to the data received from the payer to the care provider’s practice management system. 

Note: – When an error occurs in the request filled, the care provider can correct and resubmit it to clearhousing. 

Wondering if an EDI transaction is an email exchange, then it is not. It is simply an electronic transmission that a computer can understand. To make data exchange human-readable, you will need translation software.

There are different transaction methods that care providers can use, such as point-to-point EDI, web-based EDI, mobile EDI, EDI VAN, and EDI via AS2. 

Additionally, HIPAA has declared a few transaction sets for healthcare that make distinct request responses easy. These sets include –

  • EDI Benefit Enrollment and Maintenance Set (834) – This transaction standard is used to pay for insurance or claims and enroll employers, insurance agencies, unions, or government agencies. 
  • EDI Healthcare Claim Status Request (276) – This transaction set can be used in healthcare to request the status of the claim.
  • EDI Healthcare Eligibility/Benefit Inquiry (270) – This transaction set is used to inquire about the eligibility needed to add a dependent in healthcare benefits. 
  • EDI Healthcare Claim Payment/ Advice Transaction Set(835) – This standard is used to send an Explanation of Benefits (EOB) or make payment to the payee.
  • EDI Healthcare Claim Transaction Set (837) – This standard is used for claiming the information of healthcare bills. 
  • EDI Payroll Deducted and other Premium Payment for Insurance Products (820) – This set standard is used for making premium payments, remittance advice, and ordering a financial institution.
  • EDI Healthcare Eligibility/Benefit Response (271) – The use of this transaction set is to respond to the inquiry by the care provider for adding a dependent to its health benefits. 

What Should You Consider Before Integrating EDI?

Before deciding to implement an EDI solution, there are various factors that need to be considered. Companies must have an EDI solution that can easily manage their supply chain, provide accuracy of communication and adapt to changing needs.

Preferring an IT consultation services provider will help you evaluate the right EDI solution that meets your business needs. 

The EDI service providers also assist in integrating EDI that matches your resources and systems to provide maximum benefit. 

Benefits Of Integrating EDI Software Solution for Healthcare Industry

Exchanging information through EDI has multiple benefits that care providers from the healthcare industry can leverage. Ranging from claim management to policy management, you can integrate EDI –

Identifying Submission Errors & Claim Processing Delays

Integrating EDI for Healthcare leverage you from compliance requirements, such as HIPAA, vendor needs, clearinghouse, and payer-level needs. This assisted solution decreases the chances of rejection of claims by the payer, which is challenging in the case of paper claims. 

Copayment Collection

When integrating an EDI system into your healthcare industry, the care provider can easily collect the copayment through eligibility transactions. Care providers can view the patient’s current deductibles, benefits information, and coinsurance, if any, before the claim and collect copayment at the time of service. 

Minimizes Administrative Expenses 

Integrating an automated EDI will aid you to cut down the paperwork. The electronic process eliminated the purchase of paper, forms, postages, and supplies that saves a lot of time spent in manual work, such as printing, faxing, sorting, and stuffing envelopes.

Transmitting Information With Agility

Electronic and an automated system is much more agile than any manual work. It is even more accurate and error-free than the manual processes. For instance, a payer can obtain the claim the same day the care provider shares through the power of automation.

Lesser Time Spent on Phone

Reduce your communication and calling staff for changes or any other needs with EDI. Automated EDI systems can allow you to easily retrieve information related to members, claims, authorizations, referrals, and claim payments without any intervention or assistance. 

Include & Communicate With Multiple Payers

The electronic data interchange allows you to communicate and transmit information with more than one payer seamlessly. The automated system can be easily set for performing daily workflow practice. For instance, the practice management system allows the payer or financial institution to inquire about the claim status while sending the eligibility inquiry response for member’s benefit coverage and copayment verification at the same time. 

EDI in Medical Billing

Medical billing is another tedious and complicated feature of healthcare providers to manage. Standardization featured in EDI pulls you from getting lost with numerous services, diagnoses, and procedures. 

An electronic medical billing system integrated with EDI allows Healthcare providers to request payment from health insurance providers through X12 seamlessly. 

Without EDI integrated, the transaction becomes complicated to manage as the healthcare industry is connected with multiple agencies, institutions, and employees. 

The manual healthcare payment process and remittance process took weeks to complete, while EDI simplified medical processes and compressed from weeks to hours. 

Making EDI Compliant to Healthcare System

Compliance is essential to profit from EDI. As aforementioned, integrating modern structures can comply with custom healthcare software. Building proper system structures can –

  • Provide users with an efficient process.
  • Integrate business continuity.
  • Leverage quick response to immediate requests for a swift transaction.

Role-based Access

The Healthcare industry is a warehouse of enormous patient information that needs to be kept secure. Segregating users and accord groups with particular rights & roles can protect your valuable data without the need for a third-party security layer.

Encryption Communication

Encrypting critical data keeps it secure from the potential privacy risk. Encrypted data can safely keep vital communication channels and infrastructure without letting anomalies infect or attack your confidential information.

PHI Safety 

The central or fundamental element of the healthcare system is protected health information that covers –

  • Biometrics, secure user IDs, PINs, and smart keys for layering the healthcare systems with security.
  • Protected health information also includes precautionary measures, such as data restoration procedures, automatic sign-off, emergency access, and security alerts.

In a Nutshell –

EDI is a set of data transmission specifications that directs the data electronically from the payer to the financial institution or vice versa. Defined by HIPAA, every EDI transaction set follows a definitive and streamlined format, be it claim status, remittance advice, and coordination of benefits, claims, benefits enrollment, certifications, referrals, authorizations, verification, and responses. 

All these were originated to eliminate manual and paperwork maintained by the healthcare industry. The objective of EDI is to enhance the profitability and accessibility of healthcare-related information and minimize the overhead burden of administrative tasks management. Right EDI service providers can assist the healthcare industry to integrate the right EDI system that streamlines the process and delivers substantial outcomes.

Author’s Bio: Alicia works with the editorial team of A3logics, a leading company offering professional IT services. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.