Consider this: a team of three doctors is working on a patient’s case, and they would like to administer integrated care to manage a chronic illness. These doctors would need to exchange data among them and also with the patient from time to time. To ensure their data remains safeguarded, they would need a secure way of transmitting the information. This can be achieved by incorporating an electronic data interchange (EDI) system, which results in enhanced patient engagement

An EDI system software establishes message formats and standards and creates a secure platform for exchanging patient medical records. With an EDI software system, new information flows smoothly as compared to that with paper works. Healthcare EDI solutions include HIPAA-compliant standards that promote interoperability between different networks. Every transaction in healthcare EDI is HIPAA-compliant and follows ANSI standards. Each electronic data interchange requires a standardized format for ensuring a quick transfer and interpretation of data. EDI systems help healthcare providers to deliver collaborative care and better population health management

How EDI helps healthcare providers 

It is no surprise that healthcare providers struggle to manage regulatory challenges, cost of care, and payment processing. If a healthcare organization uses manual claim processing, it is more likely to face errors. Any gap while filling claims could result in claim rejections and more paperwork. Additionally, an error in claim processing can delay the entire revenue cycle and slow down payment processing. An electronic data interchange platform addresses this issue by handling payments electronically.  

Care providers use clearinghouses for exchanging information between their practice and payers, like checking the status of a claim, for instance. It is essential that the process happens smoothly and complies with the standards. Payers and clearinghouses can experience fast claim processing by integrating electronic data interchange solutions. Medical electronic data interchange can enable healthcare providers and insurance institutions to operate and communicate more efficiently.  

Here’s a look at some of the key benefits offered by electronic data interchange for medical billing: 

key benefits


As mentioned earlier, medical EDI ensures a secure exchange of patient data through standardized formats. Healthcare electronic data interchange improves the data quality and efficiency of data transfer. 

Reduced administrative expenses

Electronic data interchange systems eliminate the handling costs for paper processing because most of the data is electronic. According to the Workgroup for Electronic Data Interchange (WEDI), EDI healthcare can help healthcare organizations save $1 per claim for health plans, $1.49 for physicians, $0.86 for hospitals, and $0.83 for other parties. 

Elevated security

Electronic data interchange payment guarantees secure data transmissions between authorized parties, healthcare providers, insurers, and patients.  

Improved accuracy 

Electronic data interchange in medical billing streamlines transactions by reducing manual errors and implementing testing and validation. 

Enhanced productivity

An EDI system improves productivity by allowing data transactions to multiple parties. Electronic data interchange in medical practice also reduces denials and rework requests and removes the need for confirmation from the receiving party. 

Top 5 myths of EDI system debunked 

There are facts about EDI systems, and then there are myths. Let’s take a look at the 5 myths of EDI software. 


1. EDI tracking system is expensive 

The EDI system is often an expensive investment because it depends on the value-added network (VAN) to deliver messages. It is a myth that electronic data interchange in medical practice offers less return on investment (ROI). The fact is that an EDI system can be delivered by many secure methods which are economical and flexible. Automated handling of data in HIPAA electronic data interchange helps in cost reduction per transaction. 

2. EDI solutions do not safeguard data 

While many providers may think that data is not safe in EDI, the reality contradicts this myth. The data of your healthcare business is of utmost importance, and every vendor of EDI for healthcare understands this. Healthcare EDI transactions help you to exchange electronic data with other organizations and vendors with high security. Electronic healthcare transactions are HIPAA-compliant, and this ensures the safe exchange of health data. The heightened security in an EDI process prevents data thefts and mishandling. 

3. EDI platform is complicated 

From healthcare automation to EDI systems in healthcare, you may term them as ‘too technical’ and entirely avoid their integration. This is the most common myth regarding EDI systems, which prevents providers from using them in their operations. In this digital age where telehealth and mHealth are booming, it is essential to use modern tools such as EDI software. Unlike assumptions of it being not easy to use, EDI software solutions are easy to implement and can rapidly enhance the efficiency of your healthcare practice. An EDI software system can handle large volumes of data and reflect the sensitivity of advanced software solutions, including improved interoperability, easy application, and cost-efficiency. 

4. EDI in small healthcare businesses will be replaced by APIs 

You may believe that healthcare EDI software is only for large healthcare businesses with many partners and cannot be used in small practices. Many providers assume that APIs are more fit for small healthcare practices than cloud EDI software. But in reality, electronic data interchange (EDI) software can be easily integrated into smaller practices. An electronic data interchange software offers modern and secure transmission of health informatics with established standards even in small practices. APIs are not well-suited for exchanging bulk data and are not considered a good fit, especially for small and medium-scale practices. 

5. It takes time to adjust to a new EDI system software 

The main goal of EDI integration in healthcare is to simplify processes, support secure data exchange, and increase productivity. Irrespective of the EDI system you use, it is often assumed that it takes healthcare staff time to adjust to the intricacies of EDI integration. Contradictory to what is believed, an EDI system offers an easy learning curve, and it will hardly take any time for you and your team to get used to its functioning. The application of EDI systems is fairly straightforward, uses electronic health records, and performs quick healthcare analytics. With EDI in place, you will not lose much time learning how it works.  


EDI in healthcare is essential for incorporating a secure data exchange platform that also supports high productivity. To adopt an EDI system, it is crucial to be aware of the myths and learn the facts. An EDI system can transform your healthcare system for the better. At OSP, we understand the benefits of an EDI system and how it can be integrated into any healthcare practice, big or small. We can help you build the EDI system that suits your requirements and improves practice management effortlessly.