Etactics Whiteboard Series - Episode 3: EDI

30 years ago, the first data exchange occurred between two companies via an electronic medium. They didn’t realize it at the time, but those two companies participated in what is now known as EDI or Electronic Data Interchange. Originally, EDI was inspired by military logistics as a way to exchange vast quantities of data. Since then, millions of users, organizations, and government agencies participate in EDI every day.

EDI is an electronic communication method that provides standards for exchanging data via any electronic means. Since it has been around for so long, there are set standards to follow based on the industry that you operate within. These standards mainly describe the format of electronic documents. EDI can be transmitted using any methodology agreed to by the sender and recipient. This can include modem, FTP, email, HTTP, AS1, AS2, and AS4 technologies. Naturally, as more trading partners started to partake in EDI, more standards have emerged. Some of the most major sets of EDI standards include:

  • The ANSI ASCX12
  • GS1 EDI
  • The ODETTE standard
  • The VDA standard
  • HL7

The majority of these EDI standards appeared in the early 1980s to establish the formats, character sets, and data elements used in the exchange of business documents and forms. If your organization operates within the United States,  you are likely following the ANSI ASCX12 EDI standard.  The exchange of EDI documents is typically between two different companies which are often referred to as business partners or trading partners.

From our perspective, providers send us their ANSI 837 claim files to healthcare payers directly or to other clearinghouses. In response, a payer sends an ANSI 835 file to us which we then forward onto the submitting providers. This transaction is called electronic remittance advice (ERA) or a medical version of EDI that deals with explaining medical insurance payment.

Organizations utilizing EDI realize benefits including saving time and money, greater data accuracy and an increased transaction bandwidth.

At Etactics, we provide a clearinghouse for the healthcare industry. We function as an intermediary who forwards claim information from healthcare providers to insurance payers. In the next episode, we will go into more detail about medical clearinghouses and exactly what they do.