Basic definition of Healthcare EDI and its environment

Electronic data interchange (EDI) is a business-to-business, computer-to-computer exchange of transaction information. The examples are: Health Care Claims, Payments, and Benefit Enrollment transactions. Each of these transaction types in Healthcare EDI has a specifically defined, computer-readable format assigned to it. This is referred to as a transaction set.

Now more than 300 such sets currently exist. For the health care industry there are specifically 9 Healthcare EDI transactions currently being used:

270 – Health Care Eligibility Benefit Inquiry and Response
271 – Health Care Eligibility Response
276 – Health Care Claim Status Request
277 – Health Care Claim Status Response
278 – Health Care Services Review – Request for Review and Response
837 – Health Care Claim Institutional
837 – Health Care Claim Dental
837 – Health Care Claim Professional
835 – Health Care Claim Payment / Advice
820 – Payroll Deducted and Other Group Premium Payment for Insurance Products
834 – Benefit Enrollment and Maintenance.

EDI has been around for many decades. It is a mature technology that is finding increasing use as businesses seek ways to streamline their workflow. To cut the costs of doing business, and process huge volumes of transaction information on a regional, national, and sometimes global basis – this also refers to EDI.

EDI documents are exchanged with other businesses, referred to as trading partners. A trading partner is any outside organization that a company does business with. The examples are: physicians, hospitals and other medical facilities or suppliers, dentists, and pharmacies. The structure of Healthcare EDI documents is governed by standards development committees such as ANSI ASC X12 and UN/EDIFACT.

EDI data is designed for efficient computer processing. In its raw form, EDI data is very difficult to read manually. When EDI data needs to be human-readable, we make use of EDI translators. EDI translators are software packages that read the EDI data and present it in a form that’s easily human-readable.

Healthcare EDI data can be transmitted through any communications protocol agreed upon by the trading partners. They can be represented by Value Added Networks, SFTP, SCP, HTTPS and etc. The EDI Communication options are an extremely important component of the EDI setup. They will be discussed in details in related posts.

Healthcare EDI is a key business tool in today’s highly competitive medical environment. There are many benefits to be derived from Healthcare EDI. We can start from cost savings and better workflow to improved customer service and enhanced competitiveness. Achieving these benefits, however, depends on careful planning and correct implementation of a comprehensive Healthcare EDI strategy.

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