Healthcare EDI – Importance and Benefits

Healthcare EDI (Electronic Data Interchange) has been used for decades. Payers use healthcare EDI to determine healthcare coverage and verify benefits. EDI is as important as several other data exchange formats in the healthcare industry. Healthcare EDI has transformed the healthcare industry, manufacturing, and supply chain.

So what is healthcare EDI?
Healthcare EDI is a way for healthcare organizations to exchange data to and from external systems and entities. Instead of preparing such data manually and risking errors in data, and possible data theft, electronically preparing and transmitting data and avoids such problems. As an output, healthcare industries can automate their healthcare processing systems, including patient care systems.

How is healthcare EDI related to HIPAA compliance?
Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a law or mandate protecting patient data. Any disclosure or sharing of sensitive patient data must be with the patient’s consent as per electronic data interchange in healthcare laws. HIPAA also requires healthcare organizations to follow a data format to transmit and process healthcare data. Standardized data is consistent, and data anomalies can be avoided.

The law also requires healthcare companies to use secure encrypted electronic transmission, access health data, and implement automated compliance checks for regulations related to HHS privacy. Before the widespread implementation and adoption of HIPAA, healthcare organizations used their proprietary codes for . This made it difficult to exchange data, and any pre-processing of data was expensive.

Why is EDI in healthcare important?
Healthcare EDI is important because it improves the productivity of healthcare operations. It reduces anomalies enhances data accuracy, processing efficiency, and healthcare delivery speed. There is limited or no human intervention. So the scope of malpractices or compromising data security is low or none.

Errors are obliterated. Be it manual, billing, or shipping errors, such instances are rare or do not exist with healthcare EDI. Therefore EDI is used extensively by payers for insurance claims processing. Because of healthcare EDI, healthcare providers and insurers can effectively manage their claims. There are fewer denials, no rework requests, and no grievances from customers.

What are the benefits of healthcare EDI?
Listed below are some of the benefits of healthcare EDI.

Helps in standardizing data
Eliminates confusion and complexity that were present previously because of proprietary codes. Consistent formats eliminate the need for encoding and decoding data at the sender and receiver sides.

Improved efficiency
Consistency, universality, and uniformity lead to standardized ways of information processing. Healthcare organizations can leverage such processing contexts and customize them as per their needs. Efficiency has also improved due to the immediacy of data available and low processing times.

Improved accuracy
Expensive mistakes because human errors are non-existent. Automation of data entry reduces any human intervention. Healthcare EDI ensures high-fidelity of data. It also improves stakeholders’ trust level and confidence in healthcare EDI system technologies.

Healthcare EDI has led to cost savings, improved efficiency, and faster healthcare data processing. A healthcare organization or payer can customize the processing and transmission of healthcare EDI with a custom . It will enable healthcare EDI to reside in organizational contexts yet be ready for universally accepted transmission formats without any processing overhead.

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