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How EDI Integration Support and Benefit Healthcare Claim Process?

by Miles Austine
in Business, Tips and Tricks
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Good revenue cycle management is essential in the Healthcare Industry, which is also a convoluted process. The complexity of the process gives the care providers a solid reason to adopt EDI claim process solutions that improve business cycle speeds and accuracy.

The claim process in EDI 834 undergoes a few transaction sets, which are 835, 837, 275, 276 & 277. These sets are automated to either request, pay, or advise for healthcare claims. Processing these claims manually is time taking and critical, which Electronic Data Interchange can make it quite faster and accurate between the stakeholders in any ecosystem. 

Healthcare Industry Challenges 

Enormous patient data, it becomes challenging for healthcare personnel to track, maintain, and retrieve accurate records. Along with patient records, there are other records that demand maintenance, such as staff records, administrative records, and healthcare claims. 

The immeasurable data needed a robust solution to maintain the benefits of care providers and patients. Integrating an automated system can avoid billing and claim management confusion.

Mundane paperwork is arduous and produces more errors. Manually handled data require resources that can be expensive to maintain and not every organization can manage. 

Dr.Louis Sullivan identified and underlined these challenges and endeavored to provide ease in managing the healthcare data. The effort was declared as Health Care Insurance Portability and Accountability Act of 1996 (HIPAA). 

However, HIPAA provided great relief still there were multiple steps that needed to be followed manually.

In the Healthcare sector, usually, you cannot leave scope for error, as swiped data or incorrect data can be life-threatening. Hence, an automated solution can truly eliminate these errors. Additionally, the integrated solution can be made more efficient and effective through the latest tools and technology, such as artificial intelligence, machine learning, RPA, and more.

Before integrating the EDI automated system, let’s first understand how EDI works?

EDI for Healthcare Transactions

Electronic Data Interchange can handle the communication between insurance companies, financial institutions, care providers, and the patient seamlessly.

The communication or the exchange of the documents in EDI takes place in a computer-readable format. Every document is assigned a transaction code, which makes retrieving particular data easier without any confusion. 

To make the computerized format readable for humans, organizations will have to integrate EDI translators. This software will help the recipient to understand the content within the document and respond to the request sent by the care provider or institution respectively.

Organizations or providers using EDI need to ensure that they follow proper protocol defined by EDI message standards. The standardized data are securely transmitted to the requisite person to access. 

Transmitting messages in EDI are typical of two types –

Value-Added Network 

To ensure seamless and secure data transmission, you need a secure network. VAN is a considerable secure network that deters anomalies and malicious attacks. 

Many EDI barriers were removed after the emergence of VAN in EDI. EDI uses the standards, especially to have secure transmission of claims, payments, enrollment, eligibility inquiries, and claim status requests. 

Point-to-point 

Also known as Direct EDI, it establishes a direct connection between the providers or institutions. Care providers can approach their patients or institutions individually while offering control to the business partners.  

Benefits of Introducing EDI in the Healthcare Industry

Payments

Machines enhancing accuracy and efficiency also enhances the payment processes at a much faster rate. EDI integration not just streamlines the process, but also reduces the count of denials in payments. Built-in EDI impacts payment receiving, clean claims, reducing the time spent for submitting denials, and briefing up the distance between providers and payments.

Robust Security 

EDI runs on HIPAA standards that focus on privacy and security measures. HIPAA in 1996 released privacy measures where oversharing possibilities were limited, especially in the case of medical records and healthcare claim submissions. 

For instance, earlier paper claims mailed came in contact with multiple people, which leads to privacy information violation. Integrating EDI solutions in the healthcare management system can limit viewing or accessing private messages. Only the respective person can view or access the data with the EDI system. 

The secured email system of EDI as well as transaction codes for transmission of data enhances the security of healthcare claims on every step.

Error Identification

Through manual processes, it is near to impossible to identify details, including errors. Even if you are successful enough to find riddled error-prone actions, you give up a lot of crucial time, which could have been used for other strategic tasks. 

EDI systems have built-in detection quality to identify minimal errors before submitting the document. You can easily identify illegal handwriting, duplicate data entry, lost emails, keying errors, and much more with EDI.

Additionally, EDI also checks for HIPAA compliance and payer requirements at different levels, including vendor, clearinghouse, and payers.

Cost-Effective

One of the prominent and chief factors to integrating EDI into your system is fewer spendings. Manual processes increase the cost for maintaining healthcare data, which encompasses patients, employees, and partners. Managing huge data on paper is more expensive in nature and involves a lot more overhead from buying supplies to hiring additional staff to compensate for the billing needs. 

Denials also cost thousands of dollars each year, which the care provider has to incur each year. EDI is absolutely free from all the above stress. EDI reduces denials, eliminates the need for resources, thereby reducing the overall cost without harming or damaging the ecosystem.

How EDI can Accelerate Healthcare Claims Process

Organizations can take advantage of the electronic data interchange to increase their savings as well as improve efficiency. Furthermore, EDI can be used to –

Lower Receivables – EDI improves your cash flow and accuracy of the information exchange which builds a positive impact on the office workflow and software systems. Automated transactions allow the organizations to have current coinsurance, benefits information, such as eligibility, deductibles are available for the patient prior to filing the claim. 

Identifying Submission Errors – The agility obtained from the EDI system can also reduce the number of errors occurring during the manual process. Automated data verification can be performed much more quickly than paper claims, which decreases the number of rejections.

Cut Administrative Expenses – Organizations can save the time spent on printing, faxing, sorting, and stuffing envelopes. This lowered cost enhances productivity simultaneously.

Spend Less Time Calling – EDI eliminates the manual work, thereby reducing the need for human intervention or IT consultation services provider for any request or response. Any EDI transaction set, such as the EDI 270/271 (Eligibility), EDI 276/277 (Claim Status), and EDI 278N (Notifications), can be used to answered and receive the information on the same system without the need for spending administrative cost.

Send and Receive Information Quickly – Eliminating the need for manual processes, calling, and human intervention can accelerate your information transmission a lot better. The care provider or the payer can send the claim or eligibility inquiry, which you can receive the same day.

Estimate Cost Savings – Organizations, with the help of EDI, can easily estimate the savings per transaction and calculate potential savings from the below-mentioned table.

Estimated Cost & Savings Per Transaction By Transaction Type

Type

Cost

Claim Submission Eligibility & Benefit Verification Preauthorization Claims Status Inquiries Claims Payment Remittance Advice
Estimated Provider-Facility Cost (Manual) $1.84 $3.55 $18.53 $2.25 $1.83 $1.83
Estimated Provider-Facility Cost (Electronic) $0.28 $0.16 $5.20 $0.23 $0.30 $0.30
Estimated Total Industry Cost (Manual) $2.58 $6.83 $22.48 $6.09 $2.49 $2.28
Estimated Total Industry Cost (Electronic) $0.54 $0.22 $5.38 $0.29 $0.51 $0.51
Potential Savings Opportunity (Manual) $2.03 $6.61 $17.10 $5.81 $1.98 $1.77
Potential Savings Opportunity (Electronic) $2.03 $6.61 $17.10 $5.81 $1.98 $1.77
Estimated Health Plan Cost (Manual) $0.74 $3.28 $3.95 $3.84 $0.66 $0.45
Estimated Health Plan Cost

(Electronic)

$0.26 $0.06 $0.18 $0.06 $0.21 $0.21

To Conclude – 

Automating workflows enables the system to process multiple requests and claims at a time. Organizations are leveraged to set transactions in your everyday transaction flows. Another benefit of using machines is enhanced turnaround time and reduced time spent on manual administrative tasks, compliance risks, inefficiencies, costly rework, and most importantly, paper.

Author’s Bio:

Alicia works with the editorial team of A3logics, a leading company offering professional IT services. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.

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