Electronic Claims Transactions Help Healthcare Providers Cut Administrative Costs, Improve Cash Flow

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By Dr. William DeGasperis

Today’s healthcare providers now understand the many advantages of sharing health information electronically and its value in delivering higher quality, safer patient care. At the same time, the advent of electronic information exchange is also benefitting provider practices, with electronic processing of medical bills and claims, better known as Electronic Data Interchange (EDI), translating into greater efficiency and profitability. 

As the industry shifts from paper-based to electronic transaction processing, amid an array of demanding new laws and regulations in some states that require electronic transactions, Providers will reap the many benefits:

• Faster reimbursement 

• No paper claims to stock and complete

• Simplified record keeping by eliminating lost claims paperwork

• Reduced clerical time and the costs to process and mail paper claims

Providers will find it helpful to understand how EDI works, be informed about best practices, and know what to look for when it comes to choosing an EDI clearinghouse partner to ensure seamless implementation. 



Understanding EDI

Healthcare EDI is more than just a way to communicate; it is a structured opportunity to transmit data between computer systems, governed by industry standards that ensure accurate transmission of medical claims.

While other industries, such as banking and travel, have utilized EDI for decades, the healthcare industry lagged for many years. Organizing and sending data between parties involved in healthcare claims has always been a complicated process, particularly in the management of both patient medical records and health insurance reimbursement details. Thanks to increases in efficiency, however, healthcare EDI implementation has proven to save both Providers and payers time and money. 

Best Practices
Electronic claims can be generated in a practice management system and then transmitted either directly to the payer electronically in accordance with the health plan’s submission requirements.
 

For a nominal fee, many Providers choose to work with a clearinghouse, a private company that provides connectivity, often serving as a “middleman” between physician practices, billing entities, payers and other healthcare partners for transmission and translation of claims information into the specific format required by payers. 

Providers submitting electronic claims directly to a payer must follow the national standard formats currently in place.

Providers should have checks and balances in place to protect the privacy of information and to ensure that the electronic claims are submitted in compliance with HIPAA requirements. 

Also, Providers should request claim transmission status reports from a payer, clearinghouse or other claims transmission vendor so that they have an electronic audit trail to assist in tracking the accepted or rejected status of all the electronic claims sent to the various payers. When the physician practice is notified of a claim rejection electronically, it can quickly correct and resubmit the claim electronically.

Finding the Best Claims Clearinghouse

Before launching into the new era of paperless transactions, Provider organizations and private practice physicians should consider partnering with a billing services or clearinghouse to submit claims and other EDI transactions as an important first step to decreasing administrative costs and improving cash flow.

Look for an industry-leading clearinghouse that specializes in the electronic processing of healthcare claims, especially workers’ compensation and automobile bills for Providers where workers’ compensation electronic billing will become mandatory.   

The EDI partner should offer a platform that allows for the electronic submission of bills and supporting documents to payers resulting in faster processing, greater accuracy and increased cash flow for providers. They must also offer a seamless, compliant implementation solution and be able to connect through its interface to every medical billing application and insurance carrier in the country.  

The claims clearinghouse should also provide for the electronic attachments and supporting documentation capabilities required, and ensure no lost bills in the process, therefore increasing practice profitability and efficiencies.  

Ultimately, by streamlining manual processes, EDI helps providers enhance revenue and save time by ensuring appropriate reimbursement for their medical services and procedures.

Dr. William DeGasperis is President of Specialty Services at Concordia.