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EDI Unleashed – Series 2

Supriya Sonavane Jun 18, 2012

Electronic Claim Submission Electronic Data Interchange Healthcare EDI Healthcare EDI Technology

By now I am sure the reader is a little conversant with EDI. But before we move ahead with understanding challenges in EDI implementation lets understand how Electronic Claim Submission Works.

The claim is electronically transmitted in data "packets" from the provider's computer modem to the contractor's modem over a telephone line. Contractors perform a series of edits.

The initial edits are to determine if the claims in a batch meet the basic requirements of the HIPAA standard. If errors are detected at this level, the entire batch of claims would be rejected for correction and resubmission.

Claims that pass these initial edits, commonly known as front-end edits or pre-edits, are then edited against implementation guide requirements in those HIPAA claim standards. If errors are detected at this level, only the individual claims that included those errors would be rejected for correction and resubmission.

Once the first two levels of edits are passed, each claim is edited for compliance with Insurance Coverage and payment policy requirements. Edits at this level could result in rejection of individual claims for correction, or denial of individual claims. In each case, the submitter of the batch or of the individual claims is sent a response that indicates the error to be corrected or the reason for the denial.

After successful transmission, an acknowledgement report is generated and is either transmitted back to the submitter of each claim, or placed in an electronic mailbox for downloading by that submitter.

Types of Claim Submission

  • Institutional
  • Professional
  • Dental

Claims are divided into institutional claims, submitted by hospitals, and professional claims, submitted by clinical practitioners. Institutional claims are coded based only on the principle diagnosis for the claim; for example, hospitalization for ischemic heart disease, even though depression may have also been present and treated during the hospitalization.

Professional claims, on the other hand, are coded for all diagnoses for which a service is provided. For instance, during a hospitalization or clinic visit for ischemic heart disease in which a diagnosis of depression was also documented and a service was given, such as a referral, medication started, and so on, the professional claim database would code for both ischemic heart disease and depression.

Dental Claims are claims submitted by dentist.

This whole process of claim submission initially was paper based. With the advent of Fax machines the claims could now be sent via Fax.

However there was still a time lag involved as the claim details had to be reentered in insurance software’s to further validate them before sending response back to providers.

To overcome this challenge a new form of claim submission was launched with introduction of Clearing Houses. Electronic claim submission and efficient claims processing (without delays) was now possible.

We will look into details of what Clearing Houses are, there need and how they work in next blog, so stay tuned.

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