Therapy Brands Celebrates Mental Health Providers!

Mental Health Awareness Month (1) 1

Mental Health Awareness Month

Why Use EDI in Healthcare?

Reading Time: 5 Minutes

As the digital world continues to advance, we are privileged to use various software and technologies that make our jobs easier. One such technology is electronic data interchange (EDI) software. EDI in healthcare allows for improved claims processing with improved security and efficiency for patients and healthcare providers. Medical professionals everywhere are taking the leap and adopting EDI. Keep reading to find out why. 

What is EDI? 

EDI stands for electronic data interchange, which is a fancy way of saying, EDI serves as the courier of data between two parties, a middleman. When it comes to insurance billing, EDI and EDI clearinghouses are incredibly valuable tools that handle the communication between insurance companies and a provider’s billing software.  

Want to learn more? Check out our article What is EDI Enrollment and What is the Benefit of an EDI Clearinghouse? 

Benefits of EDI in Healthcare:  


EDI allows for improved security and privacy measures for healthcare claims processing. The Health Insurance Portability and Accountability Act (HIPPA) of 1996 protects patient’s privacy and provides boundaries as to whom medical records can be released. EDI minimizes the possibility of information oversharing when it comes to medical records and health care claims submissions. 

For example, traditional information sharing through paper claims mailed through the postal system, or information emailed to an individual, increased the chances of unnecessary persons coming into contact with the private information. While these individuals may have clearance to handle this information, it is inefficient and insecure. 

EDI, on the other hand, specifically integrates with a health management system within your healthcare practice to minimize information handling during claims processing. Instead of passing patient information from person to person (or email to email), the EDI software passes the documents through a securely integrated system that is based on specifically coded transactions. 

These transactions can only be viewed and processed by another EDI system that is able to read the standardized formatting of these coded documents. This ability to share documents and information between EDI software that only accepts certain codes increases the security of patient information and healthcare claims through each step of the process. 

Error Identification

The manual claims process is riddled with error-prone actions that lead to costly denials wasted time.  The utilization of EDI in healthcare increases the reliability, or accuracy, of the information that is being exchanged. An automated error identification tool stops mistakes in their tracks before they are ever submitted. These errors might include duplicate data entry, illegible handwriting, lost faxes/mail, keying errors, and more.  

An EDI system ensures that information is accurate upon first access. Not only this, but it guarantees that the requirements that are necessary for a transaction to occur are completed prior to being sent. This tool automatically checks for HIPAA and payer requirements at the vendor, clearinghouse, and payer levels, decreasing the likelihood of rejection along the way.  

Billing professional on her desktop taking advantage of electronic data interchange or EDI. 
EDI stands for electronic data interchange, and it is an incredibly helpful tool for fostering communication between providers and insurance companies.


Efficiency is another great reason to use EDI in healthcare practices. EDI significantly decreases the amount of time it takes to submit and process a claim. Not only will most EDI’s help you to identify potential mistakes within the claim to be submitted, but they will also assist in the processing by providing real-time feedback about the claim’s submission. 

Efficiency allows for healthcare claims to be processed faster, meaning providers can get paid for services rendered more quickly through EDI software. 


Increased efficiency and accuracy combine to bring providers their payments at a faster rate. EDI in healthcare streamlines the billing process and reduces denials. The impact of this is extended into how quickly a payment comes through. The utilization of an integrated EDI solution increases clean claims, eliminating time spent resubmitting corrected denials, and shortening the distance between providers and their payments. 


Not only do efficiency and accuracy lead to timely payments, but they also lead to huge cost savings. Manual paper claims are more expensive in nature simply due to the fact that they involve a lot more overhead. Providers have to buy paper, ink, supplies, envelopes, and more as well as hire additional staff to compensate for the billing needs of their practice. Not only this, but they lead to more denials which can cost a provider thousands of dollars each year.  

EDI in healthcare offers cost-effectiveness that is not possible without such a tool. With fewer denials, the elimination of paper processes, and fewer staffing costs, providers are able to save an incredible amount on each claim they process while building their revenue.  

Decreased Administrative Burden 

Patients deserve their provider’s undivided attention, and an integrated EDI solution can help them get it. Rather than wasting valuable provider time on manual claims management, an EHR partner that offers EDI in healthcare can relieve the burden. This tool creates an environment where a provider and their team no longer have to print, sort, stuff, and mail their claims. Not only does this process increase the opportunity for human error, but it also heightens a provider’s likelihood of a denied claim. With an automated tool, providers can trust that their information is accurate without having to bend over backward. They can return that much-deserved attention to their patients.  

An EHR vendor worth working with needs to involve an EDI clearinghouse partner to make sure providers have everything they need to streamline their billing process and return their focus to their patients. EDI technology offers the opportunity to improve the healthcare billing world through each step of the process. Apex EDI guarantees fast processing, fast payments, quality results, superior service, cloud services, and an easy-to-use interface. Built for practices of all types, these benefits are not geared toward any one specialty. To learn more about what Apex EDI can offer its EHR partners, click here to schedule a demo.  



Related Posts