Why do Health Plans Need EDI Support?

The benefits of EDI in healthcare is not an alien topic. The healthcare industry is one of the many industries that handle huge volumes of data like —patient medical records, health insurance reimbursements, and healthcare claims, among others. Using paper forms can be cumbersome. Since its inception, EDI systems have been pivotal in helping healthcare organizations process many documents like medical records, claims, etc. Health Plans have been leveraging healthcare EDI solution to perform day-to-day operations. However, these systems were built long ago and as we progress through the age of digitization, these systems need to keep up with the changing times, which is- Modernization, regulations, automation and more. Without this support, health plans may face hefty fines and revenue loss. 

Current Healthcare EDI Challenges That are Plaguing Health Plans 

  • Test Data Management: Managing claims data with syntactic and scenario based validation manually is time consuming and requires more man power as exclusion parameters range in thousands, which will result in huge costs and decreased productivity.  
  • Technology Debt: Modernization is inevitable for an IT system. EDI systems are old and the codes used while creating these systems were also legacy. Moving to cloud, integrating other solutions or making improvements to the systems is a tedious task without the right expertise.  
  • EDI File Errors: It is no surprise that EDI users face problems while matching large batch of EDI claims data for errors manually. The error here refers to whether the EDI files have been transmitted correctly and stored as required. Tests must be conducted to compare the segments, codes, data elements, which can’t be done manually. 
  • Compliance Conundrums: US healthcare regulators are constantly pushing healthcare organizations to achieve interoperability so that they can enhance patient treatment quality for better outcomes and overall patient treatment satisfaction.  HIPAA and HL7 format are mandatory regulations that need to be implemented for every EDI system that is used in the healthcare ecosystem. Most organizations don’t have this setup due to lack of expertise and expensive Implementation. 

Here’s how you can Solve the Payer EDI Challenges

  • Test Data Automation: By leveraging RPA and implementing rule-based automation validating the claims with hundreds and thousands of exclusion parameters can be done with ease and is less time consuming and inexpensive. This can increase productivity and save costs for the company.  
  • Modernization: Modernizing your EDI is the key to improving overall EDI performance. Below are some of the common modernization solutions for your EDI:  
  1. Cloud Migration: Although most EDI providers out there provide Cloud EDI, some health plans still have their EDIs on their on-premise server due to data security concerns. However, maintaining hardware means you need to employ people to manage that hardware which is an additional cost; it also slows down deployment time and onboarding processes for trading partners, which eats up the company’s revenue. Moving to cloud not only eliminates the above problem but also saves costs, and monitoring tools are often integrated into cloud based EDIs. Organizations can choose between private or public cloud. Private cloud gives users better security and control but is bit more expensive than public cloud which is a shared platform.  
  2. MicroservicesBy implementing APIs and microservices health plans can streamline the relationship with their trading partners and account for partner specific requirement. Microservices can eliminate the need to create separate EDI networks and interfaces for certain trading partners. By creating multiple implementations of specific EDI handling features, companies could reduce the number of specialized interfaces required and simplify their EDI connectivity challenges. 
  3. Flexibility in Coding: Typically, when making custom validations on the Strategic National Implementation Process (SNIP) level, there is a large coding requirement. But by implementing non-programmatic configuration through excel sheets or config INI file which can be edited by any user for convenience, changes to applications can be made easily. 
  4. EDI VAN Implementation: Now there are multiple types of EDI delivery methods like Point to point EDI, EDI via AS2 and EDI VAN. As health plans deal with multiple trading partners, it can get messy while transmitting EDI to all these partners by traditional EDI delivery methods. EDI VAN providers support multiple formats (AS2, SFTP, FTPS, etc.) who can then send your data to multiple trading partners without hassle. This eliminates multiple integration conundrum from the health plan side. Apart from this, the data on VAN is fast, secure and reliable. 
  • EDI File Automation: Health Plans need to find EDI vendors who can add custom functions into the systems that conduct file comparison and automatically test EDI files for errors. A reporting mechanism can also be added to track the data comparison and variations in the file for future uses. An automation solution would dig deep into the transactions to flag, review, and correct errors that are in various EDI formats and maintain quality. 
  • Compliance: It is mandatory that every X12 transaction that happens such as EDI 835, EDI 834, EDI 837 in the healthcare ecosystem must be HIPPA and HL7 compliant. An expert EDI vendor or service provider will add a custom validation attribute to your EDI system that checks for regulatory compliance, data elements, codes, etc, to avoid non-compliance. 

Some Commonly Used Healthcare EDI transactions by Health Plans:  

EDI Transactions  Purpose 
  EDI 835 


This is sent by health plans/payers to pay the providers for a claim or to provide an explanation of benefits remittance advice. 
  EDI 834  Benefits enrollment and maintenance set – The EDI 834 is sent by health plans to enroll and maintain membership in a healthcare plan. 


  EDI 837 


The EDI 837 is the electronic submission format of health care claim information that is structured to meet HIPAA requirements. An EDI 837 transaction is used alongside the EDI 835 transaction.  


Related: Other EDI Transactions That are Used in the Healthcare Industry 

What is the Healthcare EDI Support Verdict? 

EDI must go through modernization for health plans to fully utilize its potential and capabilities and reap benefits from them. Nalashaa has been in the US healthcare space for over a decade now and has assisted many healthcare organizations with product engineering services for EDI, EHRs, RCM, and other health IT solutions along with regulatory compliance.  

Domain Expertise  EDI Implementations  No of Transactions Enabled 
10+ Years  25+  1 billion  


If you are looking to enhance/modernize/migrate your EDI system, drop a note to info@nalashaa.com 

The following two tabs change content below.
Prateek Shetty

Prateek Shetty

Prateek is a B2B tech marketer with a keen interest in content marketing. B2B writer by day, Netflix junkie & gamer by night.

Leave a Reply

Your email address will not be published. Required fields are marked *