Articles by Anil

EDI 834

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In a typical health care model, there is an insurance company (“payer”) in between a hospital (“provider”) and an employer (“sponsor”). The payer is a healthcare organization that pays claims and administers insurance or benefit product. The sponsor buys the health benefit product from the payer for its employees. That means the employees become members and eligible to go to hospital when they need care. The providers are paid by the payer for the service provided to their members.

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EDI Standards in the Healthcare Industry

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Typically health care providers will have patients who are customers of many different insurance companies. When a provider sends out billing information it has to send it in various formats as expected from the different companies. In some cases it goes even beyond data formatting. For example the billing code for a medical procedure could be different across multiple insurance companies. This forces providers to customize billing for each individual insurance company, which in turn increases the operating expenses.

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