Electronic Data Interchange (EDI) is the automated transfer of data between a care provider and a payer. The benefits to care providers include quicker turnaround of information, reducing administrative expenses and avoiding claim processing delays.
Using EDI allows payers and care providers to send and receive information faster, often at a lower cost. This overview explains the benefits of EDI to care providers and provides the types of electronic transactions used, in addition to other information on EDI.
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Amidst ever evolving regulatory challenges, pressure of rising costs, it is vital for healthcare organizations to stay on top of their efficiency levels. Managing healthcare payment is a significant process which puts tremendous stress on their administrative bandwidth and affects efficiency, regulatory compliance as well as cost of care. Any gap in filing claims could lead to claim rejections and subsequent paper work. Payers and clearing houses have to leverage technology to enable smooth claim processing. Electronic Data Interchange (EDI) is the electronic remedy to handling healthcare payment challenges.
Drivers and Challenges in Front of EDI Market
The expanding base of patients owing to the growing prevalence of chronic diseases is leading to the generation of massive data. This, in turn, is creating a staggering volume of demand for healthcare EDI systems. The rapidly increasing clinical trials and research and development activities in the healthcare sector are also creating large amounts of data, which in turn is supplementing the growth of the market. Moreover, incessant advancements in technologies pertaining to EDI systems are boosting their scope of applications, thereby working in favor of the market. Furthermore, the rising number of end users such as hospitals and private payers and increasing emphasis on reimbursement and insurance claims are augmenting the market.
However, EDI in healthcare has its own complexities to handle. The most important aspect of EDI in healthcare are the governing standards. The high costs of these systems are hampering their widespread adoption. In addition, limited technological access in rural and underdeveloped areas is hindering the growth of the market. The technical issues related to these systems can lead to a loss of data, which in turn is negatively impacting the growth of the market.
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Using EDI to exchange information with UnitedHealthcare and other payers may benefit care providers and their billing services. The benefits to care providers:
- Sending and receiving information faster: Turnaround times are typically quicker than using manual processes. For example, a payer can receive a claim the same day the care provider sends it, and an eligibility inquiry can be received and responded to in seconds.
- Identifying submission errors immediately and avoiding claim processing delays: Electronic claims are automatically checked for HIPAA and payer-specific requirements at the vendor, clearing house and payer levels. This process decreases the reasons a claim may be rejected by the payer. This same level of automated data verification can’t be performed on paper claims.
- Lowering account receivables: Electronic transactions, such as the eligibility transaction, provides the patient’s current coinsurance, deductible and benefit information when they’re in for an appointment and before the claim is submitted to the payer for processing. This allows the care provider to collect a copayment at the time of service.
- Reducing administrative expenses: EDI cuts down on purchases of paper, forms, supplies and postage. It also saves time faxing, printing, sorting and stuffing envelopes.
- Spending less time on the phone: EDI reduces calls your staff needs to make to UnitedHealthcare to obtain information on our members, claims, claim payments, authorizations and referrals.
- Exchanging information with multiple payers: EDI lets you complete transactions for multiple payers at one time. Transactions can be set up to automatically generate in a practice’s daily workflow. For example, a practice management system could perform a claim status inquiry at the same time it sends eligibility inquiries to verify a member’s benefit coverage and copayment.