October 1999 Bulletin

EDI can save money, simplify work

New electronic exchange standards can help physicians control risk, improve patient services

By Ronald Sterling

Electronic data interchange (EDI) allows the exchange of information through computer systems. If you send electronic claims to insurance companies, you are participating in EDI. EDI can encompass several different strategies. In some cases, the practice's computers "talk" to other computers directly (example: electronic claims and electronic remittances). In other instances, labs, hospitals and insurance companies may use an intermediary to get the information to you electronically.

Exchange of information through computers can save you and the organizations you work with a lot of money. For example:

The healthcare industry lags behind many other industries in the electronic exchange of information. Even electronic claims are a mind-boggling problem. Among the various insurance companies there are hundreds of different ways data is organized as it is exchanged. The information must be exchanged exactly as specified in the format. One little difference in the electronic data, and your claim will be rejected or misinterpreted. Amazingly, there are even insurance companies that cannot receive electronic claims. In fact, electronic claims services will print the claim you send electronically and mail the printed claim to the insurer.

These differences and resulting confusion are about to change. In 1996, Congress passed the Healthcare Insurance Portability and Accountability Act (HIPAA). In the Act, the government established a goal and committee to create and implement standards for exchanging electronic information throughout the healthcare industry. HIPPA set a timetable to develop the design for these exchanges by the end of this year. Once delivered, various healthcare organizations will have two to five years to support these exchange standards.

Orthopaedic practices should take note since HIPAA addresses several electronic exchanges which will effect how they will work with various practices, insurers and others in the future. More importantly, these exchanges could actually save you money and help you control risk while improving patient services. For example, HIPAA initiated work on standards for:

First report of injury. If you can electronically access the information on the initial injury from the first point of contact (ER, PCP office or ambulance), you will be able to quickly establish case information and benefit from the work that has been already completed. Otherwise, you may have to keep the patient waiting while you contact the hospital or case manager for relevant information.

Claims attachments. If you can electronically submit claim attachments (example: OR reports), you will simplify your claims process and speed the response and payment from the insurer. Even with electronic claims, insurers must laboriously match and review your claims attachments today.

Referral authorization and certification. If the referring doctor can electronically submit the referral information and authorization to your practice, you will be able to more effectively work with other providers in your physician network.

Taking advantage of these developments will require more effective computer systems in your practice. Talk to your practice management software vendor to insure that the software you are using will be able to accommodate these exchanges and allow you to electronically cooperate with the physician networks and insurers you depend on.

Ronald Sterling, president of Sterling Solutions, Ltd., Silver Spring, Md., is a nationally recognized expert in computers for the health care industry.

Computer Link welcomes suggestions about future topics for the column and questions about the use of computers in orthopaedic practice. Send your suggestions to the Bulletin at AAOS, 6300 N. River Rd., Rosemont, Ill. 60018.

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