Did you know that the global healthcare EDI market is expected to reach $4.4 billion by 2025? The regulations in the transaction processes are the chief aspect of growth and development.
Additionally, the growth and development of the Healthcare EDI market are rooted in the need for efficient management of electronic claims and reimbursement transactions.
Any EDI partner is also a Medicare customer or supplier, billing service, clearinghouse, or software vendor, who helps in transmitting electronic data from Medicaid or Medicare. Any EDI partner or organization is bound to follow HIPAA standards for valuable data transmission to one another securely.
In this article, we shall understand the use of EDI Healthcare claim payment/ Advice, who use it, and how to use it. Additionally, we will also learn how EDI managed services can better assist you with any Healthcare EDI transactions.
EDI Healthcare Claim Payment/Advice and HIPAA Standards
EDI healthcare claim payment and remittance advice are also termed EDI 835. This transaction standard has been set by HIPAA 5010 for electronic transmission of healthcare payment and benefit information.
Before moving forward with the EDI 835, let’s learn about the HIPAA standards set for the healthcare industry.
HIPAA is a Healthcare Portability and Accountability Act (1996) federal law, which was crafted to create and follow national standards to protect sensitive patient data. It was the US Department of Health and Human Services (HHS) who passed the data to protect the subset of information.
The HIPAA rule addresses the use or disclosure of individual health information. The rule contains the standards for individuals or covered entities that can help control the way health information is used while allowing seamless flow of healthcare information, which is needed to promote as well as provide high-quality healthcare while protecting the well-being of the public.
The individuals and organizations that are considered covered entities and bound to follow the standards are healthcare clearinghouses, business associates, healthcare providers, and health plans.
Permitted Uses and Disclosures
- Treatment, payment, and healthcare operations.
- Incident to otherwise permitted use or disclosure.
- Disclosure to the individual.
- Public interest and benefits activities.
- Opportunity to agree or to disclose PHI.
Along with EDI 835, there are other EDI transaction sets specified by HIPAA, such as –
- EDI 834 – Benefit Enrollment and Maintenance
- EDI 837 – Healthcare Claim: Professional
- EDI 837- Healthcare Claim: Dental
- EDI 837- Healthcare Claim: Institutional
- EDI 820 – Payment Order/Remittance Advice
- EDI 270 – Eligibility, Coverage or Benefit Inquiry
- EDI 271 – Eligibility, Coverage or Benefit Information
- EDI 276 – Healthcare Claim Status Request
- EDI 277 – A1 Healthcare Claim Status Notification
- EDI 277- A3 Healthcare Claim Status Response
- EDI 278 – A1 Healthcare Services Review – Request for Review
- EDI 278 – A3 Healthcare Services Review – Response to Request for Review
- EDI 997 Functional Acknowledgment for Healthcare Insurance
- EDI 999 Implementation Acknowledgment for Healthcare Insurance
After understanding the role of HIPAA in EDI transactions and its need, let’s move to our topic – EDI 835, healthcare claim payment/advice.
Overview of EDI 835
EDI 835, being a HIPAA standard, is used by primary insurance plans to make payments to a healthcare provider. The EDI transaction explains the benefits (EOBs) of health insurance plans and detailed payment of the claims, inclusive of –
- Whether, there were deductibles, co-payments, co-insurance, or any other.
- How the payment was made, any medium.
- What charges are paid or denied or reduced?
- Any splits between the claims or line items.
The 835 transaction set is essential for healthcare providers to even track their payments. Additionally, a single 835 can be used for addressing 837 submissions. However, not particularly one 835 matches all 837 submissions, but still, it is most commonly used transactions also meeting HIPAA 5010 requirements.
835 Claim Payment/Advice Processing
In order to have a clean and uninterrupted transaction, both parties must have an EDI solution or system integrated. If either of the two lacks the system, the transaction cannot be completed.
The benefits of the 835 transaction set are –
- Enhanced efficiency
- Reduced errors
- Time & effort saving
- Eliminating manual keying
Potential trading partners use ASC X12 837 Healthcare claim submission to retrieve 835 transaction files, as mentioned earlier. The 835 transaction sets include the remittance data for claiming in payment.
To transfer 835 data to the trading partner, healthcare providers can use various FTP apps. FTP apps are core system apps that are located in the secure plan data center for secure and seamless data transactions.
The EDI transactions are incomplete without your clearinghouse requesting the claims. Once the request is received, the delivery may take from a week to a month, depending on the insurance provider’s agility and accuracy of the data being sent.
In case of any misinformation, left out data, the claims are denied. The denied claims will have a value indicating how the claim was processed and require adjustments.
Adjusted claims look different from the original claim. Money may be seen in negative in the original claims –
CLP*Patient Account #*22*-1114*-135.3**MC*Original ABC Claim ID*22
CLP* Patient Account #*1*1114*232.3**MC*Adjusted ABC Claim ID*22
Regulation of Transaction Process
Along with HIPAA, the Obamacare Act or the Patient Protection and Affordability Act was made to increase the affordability of healthcare insurance. Other than this, the purpose of the Act was to electronically transmit enrollment and dis-enrollment information.
The Real Challenge with EDI Solutions
Despite its benefits, many organizations may find it an exorbitant cost to implement EDI in the first place for 835 transactions. Clearinghouses associations are additional costs along with setup costs. This challenge offers the opportunity to the EDI outsourcing.
When surveyed, Healthcare revenue loss in American hospitals was due to self-pay billing issues. The Ponemon Institute survey made in 2014 with 577 hospitals professionals, hospitals, and physicians gave clarity on how they are unable to use the latest technology and mobile solutions to deliver patient care.
Additionally, the US hospitals are still struggling with the security and privacy concerns of their patient’s data.
Outsourcing – The Perfect Answer To Your Problem
Outsourcing EDI to an expert vendor can seamlessly reduce the overhead cost and maintenance burden. EDI managed providers eliminate the software or hardware on-premise need for scalability.
Not only are you relieved of employing an in-house team, but also free your IT consultation services team to focus on core business.
Let’s highlight the advantages of outsourcing claim payments.
Accelerate Payment Flow
EDI claims payment/advice outsourcing services let healthcare providers manage and maintain consistency in cash/payment flow. The quick submissions and retrievals can help hospitals achieve greater economies of scale while managed providers take care of the claiming process.
Ensure Billing Compliance
Third-party managed providers usually follow HIPAA compliant healthcare standards for processing the same while working with the organization. Whether it is medical billings or back-office solutions for clinics and hospitals, a mature managed provider ensures compliance-first in all operations.
Any experienced or well-trained third-party medical solutions provider will have knowledge of the complex claims submission process step by step. This way, third-party billing providers assure quality and accuracy in their services. The third-party analysts undergo rigorous process training to reduce the number of rejections or denied claims while quickly editing the errors in the pre-denied claims.
Focus on Patient Care
The medical industry is always full of challenges as they have to deal with life and death situations every day. But managing a profession with administrative tasks is arduous. Directing your administrative work, such as complicated billing questions serving the patient, can be relieved and consume their energy on patient care. Outsourcing EDI services will allow a healthcare provider to generate high-value activities, more revenue, and create more sustainable practices for a loyal patient base.
Outsourcing does save you from a lot of costs, such as training, benefit-cost, and salaries of the resource allocated to manage on-premise EDI solutions. Additionally, healthcare providers can be free from the cost of implementing software and hardware for EDI transactions as well as their timely upgrades. You can always consult on the pricing models with the outsourcing providers, as they have multiple options to pick from.
Improved Patient Satisfaction
One of the most imperative aspects for medical organizations to scale is consistency in providing patient satisfaction. Associating with an offshore medical billing services provider identifies errors and reasons for denials in the claiming process quickly. They also offer navigation between payers and maintain regulatory requirements so that you only concentrate on what you do best – that is treating patients better and practicing medicines for quick relief.
In short, through outsourcing, you can –
- Modernize your EDI solutions
- Boost service level agreements
- Reduce chargebacks or penalties and denied claims
- Reduce service outage risks
- Improve visibility, audibility, and manageability
- Address application and data integration requirements
- Integrate trading partners with limited technical knowledge
In a Nutshell –
Integrating new technology can be cumbersome as it can impact resources, service levels, ability to respond to new requirements, budgeting, and ability to grow.
An outsourcing approach can eliminate the excessive cost and expertise to manage vendors and partners while offering real-time visibility into operations, automated workflows, and superior customer service. So, you will always know the everyday EDI operations regardless of who manages them while constantly learning from managed providers to be able to use the technology without any help.
Author’s Bio: Alicia works with the editorial team of A3logics, a leading company offering enterprise software development. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.