One industry where EDI plays an important role is healthcare where uniform standards ensure smooth transactions between both private and government sponsored health insurance plans and the healthcare provider.
These standards are mandated by the Health Insurance Portability and Accountability Act (HIPAA), a law passed in 1996 to provide standards for both automating business processing and keeping patient records secure and private.
There are several steps to how doctors submit claims to insurers to be paid for the services they render. The first step is the software program they use, which all now comply with the HIPAA standards. However, some doctors use other applications for this in which case they have to translate their information into an EDI format. Insurers cannot and will not accept anything other than EDI formatted information due to the HIPAA law.
Beyond this, the data is transmitted from the doctor’s office to the payer using either a point-to-point connection or a clearinghouse.
Check out this new article in the information technology knowledge center at ITStaffing-e.org and learn more about the important role EDI plays in the healthcare industry.