What All You Need To Know About Data Transactions In

EDI 834 File Format?

Execution of data file transactions in EDI 834 standards is not at all an easy task. There are a number of backend processes associated with it. The article explores the whereabouts of EDI standards and how it was mandated by the Federal government.

Whenever we talk about private health insurance exchange, the first thought that comes to people’s mind is ‘marketplace’. However, most of them don’t realize the activities and processes going on in the background which includes enrollment files processing, member maintenance file processing, managing billing data, plan data and rating data. Data integration process involves compliance with HIPAA provisions & basic EDI standards. It is required that the data has to be transformed into the directed file formats for the purpose of enrollment and benefits administration process.

The basic standard for furbishing enrollment data, in American healthcare industry, is through ASC X12 benefit enrollment file or EDI 834 file. The process is, however, quite tiresome as the file formats are tricky and data has to be integrated with absolute caution. Additionally, there is a separate distinct file format configuration offered by every insurance carrier which makes it more complicated to handle.

Regardless of the thorough process EDI format offers, there is still a sense of doubt in people as to why is it necessary to use this format when the same work can be done in XML formats?

Basically X12 transaction set concept came into effect in the year 1991, when the Workgroup for Electronic Data Exchange (WEDI) was formed by the then Secretary of Health and Human Services (HHS), Louis Sullivan. In the following year, WEDI suggested all the insurance companies to adopt the EDI standards set by American National Standards Institute (ANSI). No law enforced the recommendation, until 1996 when it was integrated in Health Insurance Profitability and Accountability Act (HIPAA), with the ‘HillaryCare’ proposal.

HIPAA requirements entailed adoption of transaction standards and data elements. It is also required that the adoption has to follow proper standards formation through the WEDI consultation. After four years, in the year 2000, HHS released the final standards for electronic transactions mandating insurance industry to make use of EDI standards when data is transmitted between covered entities or the business associates.

This is how HIPAA made the use of 834 transaction sets mandatory for the carriers while exchanging data with covered entity. This was further made compulsory for other third parties too who were dealing with insurance companies. These transaction sets became the backbone of enrollment and benefits administration transactions among the State and Federal exchanges and insurance carriers.

Although, transactions are done in set formats by the entire industry, still getting an EDI Service and solution provider will be preferred. The service takes the sole responsibility of transacting data in required format acceptable by HIPAA, thereby simplifying the process to a large extent. Data transmission process can be executed in a hassle-free manner, if you get hold of an ideal EDI service provider. Along with handling the transaction process solely, service provider must also possess complete knowledge on Affordable Care Act and its provisions to help you stay compliant.