How to Protect a Healthcare EDI

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How is an electronic data interchange (EDI) used in the healthcare field?

Healthcare organizations process tremendous volumes of sensitive data when providing critical medical services to their patients. In order to offer the best care possible, they must securely and efficiently collect and share electronic health records, including protected health information (PHI). Easier said than done. 

Keeping that data safe requires a sturdy digital infrastructure, sufficient security practices, and consistent processes for handling data in transit and rest. To accomplish this, many providers and health systems rely on electronic data interchanges (EDI).

What is an EDI in healthcare?

So what is an EDI? Put simply, it’s a formalized process and format for exchanging data between business systems. How they’re setup and how they function can vary by industry and organization, but they traditionally are used for tracking and transmitting invoices, purchase orders, and other financial documents.

In healthcare specifically, they’re often used to transfer information necessary to complete transactions for payments, claims, enrollment, and other payer-related operations.

How does an EDI facilitate electronic healthcare transactions?

Healthcare electronic data interchanges primarily enable the paperless exchange of documents containing payment information for electronic transactions. They can also contain insurance information and other personal details required for providers to deliver care.

Why is an EDI important in healthcare?

Before the introduction of a national standard for EDIs, the processes and requirements for sharing these types of data varied from region to region and health system to health system. By providing a standardized format and process for the collection and transmission of these documents, healthcare EDIs can be extremely valuable for keeping transactions consistent, efficient, and secure.

In healthcare especially, where personal and payment data includes private medical histories and other sensitive information, it’s crucial for the secure processing of consumer data. It’s also critical for the information to be delivered quickly and without errors. EDIs enable this by automating many processes to reduce the likelihood of human error.

What’s an example of an EDI healthcare flow?

Typically an EDI healthcare flow would include the transmission of data from a patient input form or other medical document given by a provider to an insurance company. Once the information is shared with an insurer and coverage is determined, it will then be returned to the provider to be sent to the patient. At that point, the patient would pay for the services rendered, sending payment information and funds to the provider to complete the transaction.

Are there EDI healthcare standards?

Even if you’re not deeply familiar with the healthcare industry, you’ve probably heard of the Health Insurance Portability and Accountability Act (HIPAA). Enacted in 1996, HIPAA is a far-reaching law that covers everything from employer health insurance plans to stipulations regarding who is allowed to access certain sensitive personal and health information.

In terms of EDIs, HIPAA introduced a set of regulations for the implementation and use of a standardized EDI to process claims. Specifically, it contains an electronic data interchange (EDI) rule. The rule mandates the use of the X12N EDI protocol for data transmission for covered entities electronically transmitting data. This includes the types of transactions that must adhere to this protocol and the format of the records contained within them.

Again, the idea here is to introduce a universal format to reduce cost and complexity while simultaneously increasing accessibility and portability.

What is a business associate agreement?

Additionally, HIPAA’s Security Rule includes requirements for covered entities working with third parties that could potentially handle or be exposed to protected health information. These requirements are addressed in HIPAA’s business associate agreement (BAA) provisions. Business associate agreements are also sometimes referred to as business associate contracts.

“Business associate” refers to someone or something that provides services or otherwise acts on behalf of a covered entity and also has access to protected health information even though it is not technically a part of said covered entity. Business associates also can be subcontractors that handle PHI for other business associates.

HIPAA requires these parties to use agreements, or contracts, with regard to the safe and compliant handling of PHI. Stipulations of these agreements typically include how PHI can be used and with whom it can be shared.

However, not all third-party vendors can meet these requirements. If found in violation of a business associate agreement, the business associated in question could be penalized under HIPAA’s Security Rule for not properly protecting electronic PHI.

Protecting EDI healthcare data

In order for covered entities or business associates to protect PHI within an EDI, they should use standard data security technologies such as tokenization and encryption. When deployed via cloud platforms, organizations can use them to export patient billing information, or any other data or EHR, to third-parties for de-identification within the file or the data stream. Once that data is de-identified, it can be passed to the desired financial management application without exposing the healthcare system to the risk of HIPAA non-compliance and lost revenue.

For organizations looking to comply with HIPAA without compromising the value of their data, the TokenEx Data Protection Platform is the premier data protection solution for data management and data operations. TokenEx protects all structured data sets and provides customers the flexibility to use virtually any technology they choose.

We are the first pure-play cloud-based data protection platform, giving us the knowledge and expertise other companies simply do not possess. Our ability to help customers meet technology and industry data protection requirements is unmatched in today’s market. Please contact us today to learn more about how we can help your organization meet its data protection needs without sacrificing the value of your data or digital operations.

Check out our free eBook about tokenization and data protection to learn more.