Features of Electronic Data Interchange(EDI)

What is EDI?

EDI stands for Electronic Data Interchange. The transfer of structured data, by agreed message standards, from one computer system to another without human intervention or interference is called EDI or Electronic Data Interchange . Standard EDI X12 format data is text file separated by segment, element and sub-element delimiters (separators). Each segment is displayed on the separate line.

EDI is governed by standards released by ASC X12 (The Accredited Standards Committee). Each release contains set of message types like invoice, purchase order, healthcare claim, etc called Transaction. Each message type has specific number assigned to it instead of name. For example: an invoice is 810, purchase order is 850 and healthcare claim is 837.

What are the major HIPAA mandated Standard transaction formats?

A key component of HIPAA is the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans and employers. The major standard transaction formats that are mandated by HIPAA are the following: 

·         Health Care Claim Institutional (837I)

·         Health Care Claim Professional (837P)

·         Health Care Claim Dental (837D)

·         Health Care Claim Payment/Advice (835)

·         Health Care Eligibility Benefit Inquiry and Response (270/271)

·         Health Care Claim Status Request and Response (276/277)

·         Health Care Services Review Request for Review and Response (278)

·         Benefit Enrollment and Maintenance (834)

·         Payroll Deducted and Other Group Premium Payment for Insurance Products (820)

What is X12N?

X12 indicates EDI and the N identifies the Insurance Sub-Committee that is responsible for developing EDI standards for the insurance industry. There is a special healthcare task group within  this sub-committee responsible for the developing of health care insurance transactions. The  Insurance Sub-Committee is under the Accredited Standards Committee(ASC) which is commissioned by the American National Standards Institute(ANSI) to develop standards for Electronic Data Interchange(EDI).

What are the benefits of EDI?

i) Electronic transactions provide significant benefits compared with paper transactions:

EDI streamlines transaction processing formats are pre-edited to reduce common errors in claims data entry. This reduces the re-entry of the same data.

ii) It also reduces delays caused by scanning and re-keying.

iii) EDI also reduces operating costs and increases staff productivity.

iv) Improves cash forecasting & cash flow.

v) Faster submission of accurate  claims results in quicker payments and reduced receivables.

vi) Provides positive acknowledgement of transaction receipt

vii) Eliminates the  cost of handling and storing paper documents