Understanding EDI - Series 1

EDI Unleashed

The aim of this blog is to unleash some of the recent happenings in EDI space, specifically in Healthcare EDI space.

Since a discussion on EDI in itself is a very big topic, I decided to write a series of blog to cover the same. In the entire set of series we shall primarily look into X12N Insurance EDI transactions which handle Claims (Insurance) submission, processing and approvals/rejections followed by the challenges implementing the same along with popular solutions.

In this series let’s first have a brief look into EDI and its history.

EDI stands for Electronic Data Interchange and are a structured transmission of data between two discrete systems who wants to talk with each other, importantly without human intervention. EDI has been a very popular messaging standard in all types of Industries such as Healthcare, Banking etc. from a long time.

Two primary standards that are available for transmitting healthcare EDI messages are UNIFACT and X12.

Understanding EDI Standards

UNIFACT stands for United Nations/Electronic Data Interchange for Administration, Commerce and Transport. It is the international EDI standard developed under the United Nations.

An advantage of EDIFACT is the availability of agreed message-contents, which XML must leverage to develop its own similar agreed contents.

The Accredited Standards Committee X12 (also known as ASC X12), chartered by the American National Standards Institute more than 30 years ago, has developed and maintained EDI and CICA standards along with XML schemas which drive business processes globally.

ASC X12 is organized into subcommittees that represent specific industries and deals with transactions for the same.

  • X12C Communications / Controls
  • X12F Finance
  • X12G Government
  • X12I Transportation
  • X12M Supply Chain
  • X12N Insurance

There are primarily two types of EDI messages, one for submitting Claims (837) and one for receiving and processing Claims (835). The present X12 version for sending and receiving Healthcare Claims is 4010A1.

At a later stage we shall discuss about the new version introduced for ASCX12 i.e. version 5010.

Claim Submission 837

The EDI 837 can be used to submit health care claim billing information, encounter information, or both, from providers of health care services either directly or via trading partner or clearinghouse to Payers.

Payers include, but are not limited to:

  • Insurance Company
  • Government Agency (Medicare, Medicaid, CHAMPUS, etc.)
  • Health Maintenance Organization (HMO)

Claims may be electronically submitted to a Medicare carrier, Durable Medical Equipment Medicare Administrative Contractor (DME MAC), or a Fiscal Intermediary (FI) from a provider's office using a computer with software that meets electronic filing requirements as established by the HIPAA claim standards. Providers that bill FIs are also permitted to submit claims electronically via direct data entry screens.

Providers can purchase software from a vendor, contract with a billing service or clearinghouse that will provide software or programming support, or use HIPAA compliant free billing software.

In the next blog post we shall look into how Electronic Claim Submission works.

Topics: Electronic Data Interchange UNIFACT Healthcare EDI X12 healthcare EDI Technology

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