EDI Reference Guide

EDI Reference Guide

Taneisha Davis-Cox

HCIS/140

EDI Reference Guide

Hello! I would like to take this time to welcome you C.O.X. Medical Center. We are delighted to have you as part of the team. My name is Taneisha Cox and I am the office manager here at C.O.X. Medical Center. Here at this facility, it is very important that you know what EDI is and how it facilitates electronic transactions. It is also important that you know how HIPAA has changed how health care information is transmitted in EDI. I will educate you as new hire on these things as well as describe to you the relationship between Electronic Health Records, reimbursement, HIPAA, and EDI transactions. Again, welcome aboard!

EDI is Electronic Data Interchange. According to “EDI Basics” (2015), “Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents in a standard electronic format between business partners”. Having an EDI system helps to keep EHR records on file and to transfer those to one computer to another while staying in privacy’s that are needed. EDI system is there to help manage patient’s records, as well as making sure claims are submitted and insurers are getting paid for their services. Within the health care facility we have to follow HIPAA standards. Due to this HIPAA has standardized EDI formats by requiring particular transaction standards for eight types of EDI.

It is important to know what HIPAA has standardized for EDI systems. The standards are set for claims, remittance of payment, claims status, referrals, health plan premiums as well as enrollment retail drug clams and health claims. HIPAA has put into place what is called HIPAA Electronic Transaction and Code Sets Standards. This means that standards entail every supplier who does business electronically is to use the same health care transactions, code sets, and identifiers. The purpose of the HIPAA/EDI provision is to improve the healthcare system’s efficiency and effectiveness through standardization and simplification. Previously, different payers required that providers use thousands of different definitions, formats, and data values when processing payment claims. The electronic transactions and code sets rule, part of HIPAA’s administrative simplification section, was designed to provide a consistent, standard set of definitions that all payers and providers nationwide would use.

For coders, billers, and other healthcare business professionals, an education on EDI is necessary due to HIPAA requirements that cover all entities involved in transmitting electronic healthcare information (e.g., health plans, healthcare clearinghouses, and certain healthcare providers). The rules pertain to certain healthcare administrative transactions, such as claims, remittances, eligibility, and claims status requests/responses, when sent electronically. The relationship between them all is that in order to use HER you have to comply with HIPAA which is following the new requirements for EDI. Healthcare providers like C.O.X. Medical Center that coordinate HER clinical information with administrative data will gain a significant costs saving and ultimately improve the quality of healthcare, but must comply with new coding standards. That is the way that this all ties in. In order to ultimately save the facility money and improve the quality of care for patients, we must comply the coding standards and the new way that HIPAA requires that we make EDI transactions and that all has a significant impact on the speed of insurance reimbursement.

The EDI process provides many benefits. Computer-to-computer exchange of information is much less expensive than handling paper documents. Studies have shown that manually processing a paper-based order can cost $70 or more while processing an EDI order costs less than one dollar.

Much less labor time is required

Fewer errors occur because computer systems process the documents rather than processing by hand

Business transactions flow faster.

Faster transactions support reduction in inventory levels, better use of warehouse space, fewer out-of-stock occurrences and lower freight costs through fewer emergency expedites.

Paper purchase orders can take up to 10 days from the time the buyer prepares the order to when the supplier ships it. EDI orders can take as little as one day.

Now I hope that you, as a new hire can understand the importance of EDI to this facility and the role that you play in helping this process successful. It is very important to comply with the laws that are in place so that we can save the company money, make reimbursements quicker, and ultimately provide better quality care for our patients. I am excited to be able to work with you and I have confidence that you will be of a great attribute here at C.O.X. Medical Center. If you have any question please contact me directly.

Thanks,

Taneisha Cox

References

CONVALENTWORKS. (2015). Retrieved from https://www.covalentworks.com/electronic-data-interchange/

EDI Basics. (2015). Retrieved from http://www.edibasics.com/what-is-edi/