Examples of Disadvantages of EDI

Examples of Disadvantages of EDI

United States Health Care Systems

The United States health care system consists of thousands of different companies and other entities. In 1996, the Health Insurance Portability and Accountability Act (HIPAA) was enacted. In short, it set down standard transaction sets for specific EDI transactions and mandated electronic support for every insurance company in the United States for these transactions. While the benefits of EDI are numerous and only increase with increased volume, the drawbacks, though not directly related to EDI itself, include managerial problems in the support, maintenance and implementation of EDI transactions.

1. Though an EDI standard exists for health care transactions, the standard allows for variation between implementation, which gives way to the existence of Companion Guides, detailing each company’s variation.

2. Each entity may have a different method of delivery, ranging from dial-up BBS systems; mailing hard media such as a CD-ROM or tape backup; or FTP. Some entities may elect not to support different methods of elivery depending on a trading partner’s expected volume.

3. Due to varying implementation on nearly all points of EDI including contact, egistration, submission and testing of transactions between different entities n US health care, the existence of EDI clearinghouses has sprung up. An DI clearinghouse is one entity agreeing to act as a middle-man between ultiple entities and their end-clients, such as between medical providers and insurance companies they accept coverage from. They may act as a value-added network and attempt to conform their different supported entities to one submission standard. One such example is Emdeon. An EDI clearinghouse will not cover all health care entities, though they may cover a large portion, and they may not cover all HIPAA-mandated transactions for all of their supported entities.

4. Because of the above points, one single computer application cannot handle all health care entities. Though this may not be necessary, it can lead to an obvious management headache as a company attempts to register itself with vario

us EDI partners

This all comes at a massive cost in time and management as a company may attempt to support a broad range of transactions with a broad range of entities. This example is an extension of the lack of strict standards across implementations, transactions and methods.