Electronic Data Interchange (EDI)

Electronic data interchange (EDI) is the electronic transfer of information among the various units of a business enterprise, or with its trading partners. In addition to benefits associated with paperwork reduction, EDI improves the efficiency of transaction processing by reducing data redundancy and improving data quality. Examples of business information transmitted electronically among health care organizations include insurance eligibility information, encounter data, claims for payment of medical services and products, and purchase orders and supplier invoices.

Electronic data interchange can occur effectively only in open systems, where exchange partners use data standards (common syntax, data structure, and editing conventions). The accepted standard for all types of electronic commerce is ANSI ASC X12, published by the ANSI (American National Standards Institute) Accredited Standards Committee. Various ANSI subcommittees develop standards related to specific types of data, such as the ASC X12N Health Care Claim (837), developed by the ANSI Health Care Task Group. This standard enables administrative processing of electronic claims for payment of health care services (medical, dental, and other provider encounters), and products such as pharmaceuticals and durable medical equipment. Another ANSI organization developing health care standards for clinical and administrative data, Health Level Seven (HL7), is addressing the administrative simplification requirements of the Health Insurance Portability and Accountability Act (HIPAA).

The Workgroup on Electronic Data Interchange (WEDI), a health industry coalition founded in 1991 to promote adoption of EDI technology and to provide leadership in health care standards development, consists of individuals and organizations representing payers, providers, government and standards agencies, vendors, and consumer groups. This organization has a particular focus on disseminating information about pending legislative and regulatory issues related to EDI.