What is EDI in Healthcare?
EDI in healthcare stands for Electronic Data Interchange – a system for securely transmitting information between healthcare providers, health care clearinghouses, and payers about a patient’s condition, treatment for the condition, and payment for the treatment. Since 2000, the standards used in EDI healthcare transactions have been governed by Part 162 of the HIPAA Administrative Simplification Regulations.
To help explain what EDI in healthcare is, it can be useful to start with the scenario of a patient attending a checkup appointment with a doctor. The doctor examines the patient and identifies a problem that requires treatment. Before providing the treatment, the doctor sends an eligibility enquiry to the patient’s insurance company (or Medicare, etc.), and the insurance company replies to inform the doctor whether the patient is eligible for the treatment.
In this case, the patient is eligible for the treatment without any further authorizations required. The doctor provides the treatment and submits a claim for payment supported by details of the patient/doctor encounter. The insurance company is slow to pay the claim, so the doctor sends a claims status enquiry. The insurance company responds to the claims status enquiry with the reason for the delay prior to paying the claim and sending a remittance advice.
All the transactions between the doctor and the insurance company are conducted via a healthcare EDI (using a health care clearinghouse when necessary). An EDI in healthcare ensures the information is transmitted securely and accurately using standards promulgated by the Department of Health and Human Services (HHS). Use of the EDI also ensures the doctor gets paid quicker than if the transactions were conducted by phone, email, or via the USPS.
What Transactions Can be Conducted by an EDI in Healthcare?
As well as eligibility enquiries/responses, claim status enquiries/responses, and encounter information/remittance advices, an EDI in healthcare can be used for many different types of healthcare transactions. These include to transmit details of health plan premium payments, request an authorization for treatment, refer a patient to hospital, and to coordinate benefits when a patient is in multiple health plans and it is necessary to determine which is the payer.
The benefits of using an EDI in healthcare are not only to ensure doctors get paid quicker. A member of a health plan may be eligible for many types of health care, and the health plan could in theory receive eligibility enquiries, encounter information, and claims for payment from doctors, dentists, opticians, hospitals, and other healthcare services (i.e., pharmacies). An EDI in healthcare helps the health plan mange the patient’s claims information more efficiently.
In addition, EDIs support HIPAA compliance by transmitting Protected Health Information (PHI) over secure protocols in an encrypted format to ensure the confidentiality, integrity, and availability of the information. They should also have access controls to ensure only authorized members of the organization’s workforce are able to access PHI at the input and output stages of the transactions. There are no recorded HIPAA violations attributable to an EDI in healthcare.
What is the HIPAA EDI Rule? Is it the Same as HIPAA 5010?
The adoption of EDIs by the healthcare and health insurances industries started in the 1970s. However, only the largest organizations had the IT infrastructures necessary to support rudimentary Electronic Data Interchanges; and, due to the piecemeal manner of adoption, many developed their own transaction standards. It has been claimed that, prior to the passage of HIPAA in 1996, there were more than 400 sets of transaction standards in use.
The consequences of there being so many sets of transaction standards were conversion errors, poor interoperability, high IT costs, and security gaps. In order to eliminate these consequences and simplify the administration of healthcare transactions, Congress instructed the Secretary for Health and Human Services to standardize the standards (42 USC 1320d-2). In August 2000, HHS published the “Health Insurance Reform: Standards for Electronic Transactions”.
The Standards for Electronic Transactions became known as the HIPAA EDI Rule. The “Rule” (which now appears in Part 162 of the HIPAA Administrative Simplification Regulations) is frequently updated to accommodate new healthcare processes, advances in technology, and business needs. One of the updates involved changing Version 4010 of the ASC X12 standards to Version 5010 to accommodate changes from ICD-9 transaction codes to ICD-10.
The change to Version 5010 (HIPAA 5010) happened in January 2009 and HIPAA 5010 has been the version of the ASC X12 standards used ever since. However, the Accredited Standards Committee (ASC) for X12 standards is currently working on a newer version of standards for healthcare transactions and it is likely that in the near future HIPAA 5010 will be replaced with HIPAA 7030 or HIPAA 80×0 depending on how long the approval process takes.
