Wednesday, June 9, 2010

How Electronic Data Interchange (EDI) work

Electronic Data Interchange (EDI)

EDI, electronic submission of Medicare Part B claims eliminates mailroom processing and manual data entry. The Medicare claims processing system can usually pay electronic claims faster than pa- per claims. Generally, electronic claims can be paid on the 14th day after submissions, but paper claims cannot be paid earlier than the 27 th day after submission. 

EDI saves the physician time and money through more accurate, faster processing of claims and reduced postage costs. Physicians should contact the local Medicare carrier for information about EDI. 

How EDI Works  

The claim is electronically transmitted in data “ packets ” from the physician ’ s computer modem to the carrier ’ s modem over a telephone line. The carrier checks ( “ edits ” ) the data for required information. Claims that pass these initial edits, commonly known as front-end edits or pre-edits, are then processed according to Medicare policy and guidelines. Claims with inadequate or incorrect information do not pass the initial edits. They are rejected and are not paid because they lack sufficient in- formation to make a payment decision. 

After successful transmission, an acknowledgement report is generated and is either transmitted back to the physician or placed in an electronic mailbox for the physician to download. This report con- firms that the file was received and lacks format errors. Once the claims are processed another report is generated that indicates the number of claims accepted and the total dollar amount transmitted. Additionally, this report lists claims that were rejected, as well as, the reason(s) for being rejected. The physician should review this report carefully. At this point, the physician can make necessary corrections to the rejected claim(s) and resubmit them.

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