EDI Reference Guide

I have uploaded an example. Please use the example provided as a reference only

Imagine you are the office manager at a small doctor’s office. As the office manager, you are in charge of educating new hires.

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Write a 700- to 1,050-word reference guide describing electronic data interchange (EDI).


Include the following in your summary:

  • Define EDI.
  • Explain how using EDI facilitates electronic transactions.
  • Explain how HIPAA has changed how health care information is transmitted in EDI. 
  • Describe the relationship between Electronic Health Records, reimbursement, HIPAA, and EDI transactions.

Cite a minimum of two outside sources. For additional information on how to properly cite your sources, log on to the Reference and Citation Generator in the Center for Writing Excellence.

Format your assignment according to APA guidelines.

Table of Contents What is Electronic Data Interchange (EDI)? 2 Example of EDI: 2 How does using EDI facilitate electronic transactions in healthcare? 3 Example of the Benefits of EDI: 3 How has HIPAA changed how healthcare information is transmitted in EDI? 4 Example of HIPPA/EDI: 4 What is the relationship between Electronic Health Records, reimbursement, HIPAA, and EDI transactions? 5 Example of HIPPA/EDI Claim Transaction 5 References 6

What is Electronic Data Interchange (EDI)?

Electronic Data Interchange is a way to transmit data between different computer systems. EDI is the standard designated by HIPAA to exchange patient data.

EDI systems effectively eliminates the need to print, file, store, post and retrieve paper documents which is more cost efficient in the doctor’s office. The goals for the future is to completely get rid of paper records. This will then have everyone working with the same systems so that all of our information is processed and read easily. This will help us provide better and quicker care for our patients.

Some doctors that have been using the EDI system, often find it more difficult to use then paper, but converting to the system means that it will pay dividends in the end.

Example of EDI:

(Kavidayal, 2015)

How does using EDI facilitate electronic transactions in healthcare?

· Manual data entry and processing is reduced

· Improved data quality

· Elimination of contrasting forms and codes

· Improved cash flow

· Improved accuracy of information

· Fewer rejections of claims

· Cost savings (paper, postage, labor)

· Less billing errors

· Improved accuracy, reliability and usefulness of shared information

· Improved patient service

· Prevents errors that could lead to allegations of fraud and abuse

· Minimizes the risk of penalties

· Staff stress is reduced

Example of the Benefits of EDI:

(Admin, 2015)

How has HIPAA changed how healthcare information is transmitted in EDI?

First let’s explain HIPPA. The Health Insurance Portability and Accountability Act (HIPPA) was enacted in 1996. An important feature of HIPAA is the national standards for electronic health care transactions. These standards are meant to improve the efficiency of the healthcare system in the U.S. By doing this we are boosting the widespread use of the EDI system here in the U.S.

“Standards for Electronic Transactions (EDI) and Code Sets The HIPAA transactions standards clearly set forth a special role for healthcare clearinghouses to provide services to translate electronic data that is not in the HIPAA-dictated format into standardized data that complies with the HIPAA-dictated formats (referred to as the X12 format). National Information Services (NIS) has provided customers with this “translation” service as part of our electronic claims service before the compliance date of October 16, 2002. Stringent testing and evaluation of electronic claims transmissions by Claredi resulted in full certification that all claims transactions and protocols were compliant with all electronic transaction and code set requirements mandated by HIPAA” (HIPPA, 2009).

Now I know you’re thinking, “that is great to know but what are the code sets?” Code sets are medical codes that have been approved by HIPPA. Examples of codes sets are, ICD-9-CM, National Drug codes, the common coding system for healthcare, current dental terminology, and so forth and so on.

Example of HIPPA/EDI:

(Villanueva, 2013)

What is the relationship between Electronic Health Records, reimbursement, HIPAA, and EDI transactions?

First let’s give definitions for all of these. From the beginning you already know what EDI transactions are. Electronic Health Records (EHR) are an electronic version of a patient’s chart. EHRs are there to make the information available instantly to authorized users such as doctors and nurses. HIPPA was explained in the last page. Reimbursement means that it is a method of payment for medical treatment or hospital costs. This is usually done by a third party.

So now that has been explained I am going to tell you the relationship between all of these. First when you go to the doctor all of your patient information is now in a database and what comes up on a computer screen is your Electronic Health Record. This information contains everything from what you were there for that day, to any prescriptions that you are taking. It can also include any radiology reports that you might have needed in the past. Because of HIPPA these records are safe and secure. Also now because of HIPPA we have EDI transactions. Specifically, EDI claim transactions.

Now if you get a “bill” in the mail from your insurance provider with a list of items that you have to pay for or what your insurance has paid for. While you are looking through this “bill”, you may see an item or two that you know is supposed to be covered by your insurance. That is where the EDI claim transactions come into play. You get a hold of your insurance provider and they then file an electronic claim submission. This is now a faster, and easier way to submit claims. Because of your claim being filed this way, if the insurance provider agrees that they should have paid for a service, then you will be reimbursed for that service.

Example of HIPPA/EDI Claim Transaction

(Brown, Kelly, & Querusio, 2011)


Admin. (2015, July 20). The benefits of using EDI in your organization . Retrieved from Expert Fortran – Latest Information about Software and PC Programs: http://www.expertfortran.com/the-benefits-of-using-edi-in-your-organization

Brown, P., Kelly, J., & Querusio, D. (2011, May/June). Toward a Healthcare Business-Process Reference Model. IT Professional, 13(3), pp. 38-47. doi:doi:10.1109/MITP.2010.65

HIPPA. (2009). Retrieved from National Info: http://www.nationalinfo.com/hippa.asp

Kavidayal, S. (2015, July 07). Electronic Data Interchange in Healthcare. Retrieved from Linkedin: https://www.linkedin.com/pulse/electronic-data-interchange-healthcare-swati-kavidayal

Villanueva, J. C. (2013, September 03). Securing HIPAA EDI Transactions with AS2. Retrieved from JScape: http://www.jscape.com/blog/bid/101188/Securing-HIPAA-EDI-Transactions-with-AS2

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