ELECTRONIC DATA INTERCHANGE (EDI)
Electronic Data Interchange
Electronic Data Interchange (EDI)
EDI is described as the exchange of organization’s information electronically through uniform design (Vollmer, Gilpin & Rose, 2011). It is a method that permits a corporation to transmit electronic data to a different corporation instead of using paper to convey such information. Therefore, EDI is the computer-to-computer interchange of business records through a uniform electronic format among corporations or business colleagues.
How using EDI facilitates electronic transactions
As per Vollmer, Gilpin and Rose (2011), EDI facilitates electronic transactions through reducing transaction expenses, enhances transaction pace, accuracy as well as trade effectiveness. Through shifting from paper-based interchanges of business records to electronic-based records, the enterprises enjoy key advantages, for instances, decreased expenses, improved processing rate as well as decreased inaccuracies.
It minimizes transaction expenses
For entities that deal with plentiful transactions, the use of EDI may cause saving of huge sums of money which could be incurred for buying papers in case paper-based interchange is used (Vollmer, Gilpin & Rose, 2011). While interchanging files by electronic means enhances transaction pace as well as visibility, it also decreases the sum of cash used since it saves the cash to be used in the manual method.
It enhances transaction pace as well as the accuracy of the records
Vollmer, Gilpin, and Rose (2011) explain that EDI can accelerate the business interchanges by 61 percent.
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The transaction interchanges take place instantly rather than the longer waiting periods that was previously experienced via the postal services. Since the application of EDI lessens the transactions between the doctors or hospitals, it enhances the partners’ relationships.
EDI also enhances information quality. Vollmer, Gilpin and Rose (2011) assert that it results in a minimum of 30-40 percent decrease in communication with mistakes. It eradicates mistakes caused by unreadable handwriting as well as lost faxes, parcels, and letters.
It enhances enterprise efficiency
Computerizing paper-based jobs permits the workers to focus on higher-value duties as well as offer workers the instruments to be very productive. The fast processing of accurate medical records results in minimal re-working on the records that may be due to mistakes. Computerizing the interchanges of medical records between the doctors’ offices and to the hospitals may guarantee that crucial medical information is conveyed punctually as well as may be traced instantaneously (Vollmer, Gilpin & Rose, 2011). It also cuts the claim processing as well as reimbursement disbursement periods that implies that an organization may decrease its inventory level.
How HIPAA has changed the way health care information is transmitted in EDI
The HIPAA provides for the EDI rule that is founded on the X12 EDI to communication protocol standard (Fedorowicz & Ray, 2004). Even though occasional allowances may be given to the organizations, this rule demands that every covered organization which conveys information by electronic means should apply the X12 format only in conveying the data (Fedorowicz & Ray, 2004). This EDI rule under the HIPAA provides for a series of information transfer stipulations which stringently regulate how information is communicated by electronic means from a computer to a different one.
Moreover, Fedorowicz and Ray (2004) explain that this regulation (X12 EDI Rule) distinctively identifies the various kinds of transactions which are protected by the HIPAA as well as provides for the precise format for every transaction document. Health records transactions done electronically, for example, health treatment claims, status claims as well as remittance advice, eligibility confirmations and replies, medical transfers and approvals, as well as coordination of benefits (COB) plus other transactions done in hospitals or doctors’ offices, are covered under this regulation. The intention of the X12 EDI rule is to cut down the many health records information formats to a single format which is collectively applied all over the healthcare sector. The purpose is to significantly improve the transferability or moveability as well as ease of access to this data and to reduce the administrative operating costs related to the running of the procedure. Prior to HIPAA, there existed many various formats for transmission of electronic data (Fedorowicz & Ray, 2004). However, currently, electronic health records data are conveyed in one general format.
The relationship between Electronic Health Records, reimbursement, HIPAA, and EDI transactions
HIPAA is a law which allows a qualified person to buy health insurance cover despite any pre-subsisting medical conditions (Fedorowicz & Ray, 2004). Therefore, when an individual is qualified, every medical insurance corporation offering individual cover policies must give the person the health cover notwithstanding the health conditions or history. In a case of medical treatment of the covered person in any covered organization, the covered hospital is reimbursed the costs of treating the covered individual by the insurance company. Further, under this law, the covered organizations are required to safeguard as well as handle confidentially the protected medical records as well as data which may either be paper-based but mostly are in electronic format. Moreover, HIPAA authorizes principles as well as procedures for dealing with electronic health records such as electronic billing, claims, as well as other healthcare procedures (Fedorowicz & Ray, 2004).
A central element of HIPAA law is the creation of the nationwide principles to be used in every electronic healthcare transaction including the claims for reimbursement and sharing of patients’ electronic health records between hospitals and doctors (Fedorowicz & Ray, 2004). The purpose of using federal standards is to significantly enhance the effectiveness as well as capacities of the health facilities countrywide. The application of these standards within the health sector is currently everywhere. HIPAA demands that every covered organization which conveys its information electronically should utilize the EDI procedure X12 (the EDI Rule). This regulation stipulates the way the health facilities are to transmit electronic health records as well as exactly how the information must be formatted.
Fedorowicz, J., & Ray, A. W. (2004). The Impact of HIPAA on the integrity of healthcare information. International Journal of Healthcare Technology and Management, 6(2), 142-157. http://184.108.40.206/faculty/warkentin/SecurityPapers/Merrill/Fedorowicz2004_IJHTM6_2_ImpaceHIPAAIntegrityHealthcareInfo.pdf
Vollmer, K., Gilpin, M., & Rose, S. (2011). The future of EDI. Forrester Research, 2. http://seeburger.su/wp-content/uploads/pdf/Forrester-budushhee-jelektronnogo-obmena-dannymi-EDI.pdf
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