Jul 13, 2021 Admin

Healthcare EDI

Accelerate Your Business with EDI Healthcare Review and Response Service

You may ask, why do you need to outsource your EDI healthcare solutions when the health plans can be controlled by dedicated professional EDI analysts everyday?

The answer to this very question lies within. Because your in-house analyst may be inefficient or lack the requisite knowledge & time to manage numerous plans. 

EDI for healthcare has multiple transaction sets declared by HIPAA, which every EDI operator must follow. HIPAA is an abbreviation of the Health Insurance Portability and Accountability Act, which was enacted by the US Congress in 1996. 

Why is HIPAA Vital?

HIPAA permits individuals to purchase any type of health insurance, especially after losing coverage from their employer. HIPAA leverages only the eligible, with pre-existing health conditions to buy insurance sponsored by health insurance companies and employers. 

Also Read: How Are EDI services Transforming the Healthcare Industry?

HIPAA in EDI

HIPAA is a vital component for issuing and acquiring health care insurance and also establishes national standards for Electronic Healthcare Transactions. HIPAA improves the entire healthcare industry's system through implementing the set standards. 

HIPAA ensures that data transmission must run under a universal set X12 protocol. The ANSI x12 EDI protocol defines the roadmap of sending and formatting data. Healthcare providers or financial institutions selling insurances and healthcare plans are bound to follow these set standards.

Integrating EDI with HIPAA standards ensures an efficient health care system while reducing the overhead burden of administrative management. Additionally, care providers using EDI X12 tend to have increased profitability and accessibility of healthcare information and documents.

Typically electronic healthcare transaction sets requiring EDI X12 format are segregated under -

  • Benefit Enrollment and Maintenance - 834
  • Healthcare Eligibility/Benefit Inquiry - 270
  • Healthcare Claims - 837
  • Healthcare Claim Payment/Advice - 835
  • Healthcare Payroll Deducted & other Group Premium Payment - 820
  • Healthcare Eligibility/Benefit Response - 271
  • Healthcare Claim Status Request - 276
  • Healthcare Claim Status Notification - 277
  • Healthcare Service Review Information - 278

From March 2012, the healthcare providers were mandated to have a 5010 compliant version of HIPAA EDI standards, which includes claim status, referrals, claims, remittances, and eligibility. 

This article is focused on the EDI transaction set 278 - Healthcare Service Review Information and how data is electronically transmitted. We will also highlight the need for outsourcing EDI in the healthcare industry for 278 standards.

Definition and Purpose of EDI 278 - Request for Review & Response

As aforementioned, every transaction set follows HIPAA standards. 278 is one among many HIPAA standard transaction sets, which is meant to request for reviewing patient's data, diagnosis, or any treatment data. This transaction set is also meant to report an outcome for a review. For instance, through the 278 transaction set - a healthcare provider can request patients for their healthcare certificates, or a hospital can send a patient's discharge notice.

The review and response transaction set - 278 can either be sent one-way or two-way (sent/received). In order to determine accuracy in sending or retrieval of data, utilization management organizations (UMO) play a vital role. The UMOs are usually identified as insurance companies, PPOs, and others. 

Regardless of the fact that EDI supports multiple member transactions, it is recommended to send an individual 278 for each patient and event. The 278 transaction set can be used for the following categories -

  • Completion Notification
  • Information Copy
  • Advance Notification 
  • Change Notification

Process Flow of the EDI 278

Process Flow of the EDI 278

The process begins by- 

  • Submission(trading partner) of the EDI 278 requests.
  • EDI identifies the request and validates it to generate a 999 response file.
  • Any EDI integration services in the organization have a UMI process that generates a response file for 278 requests raised.
  • When the backend system generates the 278 response, it is sent to EDI for validation.
  • EDI then validates the file received from the backend and sends a 278 response to the trading partner.

For Reference - 

Before integrating a 278 transaction set for organizations, they are thoroughly tested by the EDI service providers to ensure smooth flow of request & response transactions. Testing identifies possible connectivity failures, such as -

  • If the partner is unable to receive a response.
  • If the partner wishes to resubmit the inquiry.

Choosing the right service provider ensures a perfect EDI solution that can connect with your system and comply with your business requirements & culture. They will also ensure that the data transmission undergoes safely. 

EDI 278 Transaction Set Implementation Checklist

A complete process is followed by the outsourced team of EDI before integrating it into any organization's system. The testing process follows the below mentioned steps -

  • The request is sent for any XYZ reason from the guest partner to another, filing the mandates.
  • A dedicated software development team is assigned to check every step, hence work side-by-side to underline the loopholes or failures during testing.
  • The guest partner is given proper instructions that include relevant information to fill and follow.
  • The development team then reviews the data entered by the guest trader and checks whether the entered data is correct. If there is an error in the data submission, the guest partner is asked to resubmit the information.
  • When the request is retrieved appropriately, the response file is prepared and sent back. 
  • The response is reviewed and tested for approval.
  • When noted everything is as per the process, it is then declared as successful completion. 

When A1 request for authorization is raised from the trading partner or healthcare provider, the EDI healthcare service response would look like -

HL*4*3*EV*1~

TRN*1*A123456789*9876543210~

UM*HS*I*2*11:B**E***Y~

HCR*A4*00000001*A4~

If the process somehow fails, it will look like this -

TRN*1*A123456789*9876543210~

UM*AR*I*2*21:B~

HCR*CT~

Transaction EDI 278 - Request and Response Examples 

A clear transmission EDI 278 request transaction process explanation can be seen below -

ST*278*0001*005010X217~

The 278 is the transaction set with a control number #0001 and a reference protocol is 005010X217.

BHT*0007*11*C64374*20050502*1102*16~

The 0007 is a structure for a response, such as information receiver, subscriber, event, services, etc). The submitter transaction identifier C64374 is returned through the UMO system. Further information regarding response is denoted through the BHT value of 16.


There are different hierarchical levels (HL) followed by EDI in 278 transmission format for request/response review. These hierarchies can be identified as different partners, such as Insurance company, submitting provider, subscriber, and the patient. The below example highlights the request raised for the patient’s appointment and diagnosis of ailment. 

HL*1*2*EV*2~

The HL count is 1 here with a subordinate to HL 3, which is the parent hierarchical level. The EV code identifies the patient event and subordinate levels or children. In this case, this HL has children as the value represents 2.

TRN*2*112589*9849047591~  

This is the trace number assigned by the care provider for UMO to respond to the request through the number.

UM*SC*I*3*11:B~

This line of code represents the requested initial consultation service. Here Dr. Wan has raised a request for an appointment for a patient with Dr. Lee at Dr. Lee's office.

HCR*A1*AUTH0001~

This line of code dictates Washington Digital approved the referral & offers a certification number.

DTP*AAH*RD9*19050303-19050403~

This line of code explains that the insurance company shows the range of date for possible consultation.

HI*BF:41090:D8:20050430~

This line of code displays that acute disease has been diagnosed of the patient.

HSD*VS*2~

Dr. Wan requested two visits. 

NM1*SJ*2*LEE*ANDREW****31*991001356~

The event provider of the patient is Andrew Lee, and his social security number is 991001356.

PER*IC**TE*5474892021~

Dr.Lee's contact number is 5474892021

SE*16*0002~

This line of code explains the number of segments and control number.

 

This is a simple example of the EDI 287 transaction set; however, when you add multiple members to EDI you will have numerous requests to which responding at a time becomes challenging. Moreover, sending an adequate response to the requisite request is another struggle. Here is where you can have the assistance of an outsource or managed EDI service provider.

Should You Outsource Your EDI Healthcare Services?

Outsourcing EDI can benefit business operations in many ways. Let’s understand how outsourcing can truly assist in business growth.

Streamlined Processes

In 2001, Owens Corning was bewildered at calculating the amount spent on handling paper invoices, orders, and acknowledgment. It is not a surprise that many companies cannot break the chain of using paper instead of electronic data interchange (EDI). When the renowned Owens Corning switched its manual-paper work to EDI, he realized the lack of requisite infrastructure and staffing skills. Infrastructure could be obtained quickly but finding a qualified resource was a struggle. Instead of hand-picking the staff, they outsourced their entire EDI. 

The result was - adequate infrastructure for EDI was sought, compliance needs were met, staffing solutions & training were no more a headache, the latest tools & technology could be integrated, migration of manual work to the cloud based EDI for effective outcome and security was seamless. All these streamlined enhanced their efficiencies and increased their process to reach vendors or even process a transaction set on their own.

Comprehensive Solution

Outsourcing EDI managed services are cost-effective and efficient than employing an in-house team. It is a myth that outsourced EDI service providers charge exorbitantly for their time and efforts. Instead, you can pick a model that suits your budget as well as meets your objectives. 

Moreover, the level of experience that you get from an outsourcing provider is unmatched. The team entirely handles the processes so that the organizational head can focus on other crucial work, such as mapping and defining processes.

Outsourcing EDI providers also evaluates existing infrastructure to comprehend what's lacking. Whether it is a single network translator or an entire infrastructure, they make your EDI processes faster and efficient.

Agile, Effective & Web-Based

As per Giga Information Group, B2B EDI integration is growing at 10%-15% each year. Most importantly, the small firms are leading towards this adoption more than any. The reason being web-based cost-effective platforms to conduct easier and quicker EDI transactions.

Large organizations handling a pool of processes each day every minute need a robust and agile solution that can handle manual entry. The Healthcare industry that relies on manual processes can lead to the delay of ailment diagnosis of the patient, further delaying the treatment. 

Outsourcing EDI solutions can seamlessly reduce the need for expensive infrastructure as well as internal IT consultation services. 

Associating with the right service provider can help you quickly comprehend requests and align with the care providers for accurate and quick responses. 


To Conclude - 

Electronic Data Interchange is replacing paper documents with digital documents eliminating manual and time-taking entries. The Healthcare industry handles complex, time taking critical data, which EDI integration can seamlessly solve. By associating with vendors outsourcing EDI functions, care providers can leverage themselves as well as their partners to handle multiple requests and respond to them with accuracy in less time. Whether it is web-based, cloud, or a desktop-based client, outsourcing EDI service providers can handle them without the need for dictation, thereby giving you efficiency for the long term.

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