Electronic data interchange (EDI) is the exchange of standardized electronic documents between organizations from one computer application to another. The health care industry has used EDI for more than 20 years as a way to create efficiencies in third party payer billing. The electronic exchange of health information reduces administrative costs, lessens claim errors, and improves productivity. EDI offers several benefits to both payers and providers. A few of these benefits include: improves cash flow, reduces administrative costs, lessens claims errors, improves productivity, and eliminates paper waste. Beyond the costs-savings associated with using electronic transactions, EDI offers many other advantages over paper, including that the transactions are portable, re-usable, and interchangeable between payers and providers.
Many factors influence the rate of EDI activity including financial resources and technical infrastructure. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) Administrative Simplification provisions allow for the electronic exchange of standard transactions between payers and providers. HIPAA requires payers to accept electronic transactions but does not mandate its use by providers.
COMAR 10.25.09, Requirements for Payers to Designate Electronic Health Networks, requires payers operating in Maryland with an annual premium volume exceeding $1 million to report census information to the MHCC. Each year the MHCC examines the administrative transaction data from payers and develops an industry brief. Payers and providers use this information to monitor and enhance their use of administrative technology.
Last Updated: April 4, 2012