What Does becoming EDI Capable Mean?

How Healthcare Intermediaries Leverage Technology to Become EDI Capable

Electronic data interchange (EDI) has become the standard for organizations to share information.  Simply put, EDI provides a standard way of sending data so that everyone speaks the same “data file language”.


edi capable

Supply Chain and Logistics Example: Think of it this way, let’s say a large retailer did not use EDI for requesting orders.  Every vendor would send various formats such as spreadsheets, flat files, and even Fax. That large retailer would have to translate every single order into their in-house format.  Without EDI capabilities, every business is sending and receiving different formats and integration is very painful and costly.  EDI has schemas that represent different data files and everyone that uses that format, knows how to translate it.  For example, an Order is an X12 850, Invoice is X12 810, and an ASN is X12 856.  Each three-digit number represent the standardized X12 format.

Healthcare Example: In Healthcare, EDI is not only recommended, but it’s mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Law 104-191, was enacted on August 21, 1996. When you go to your primary doctor for a jammed finger, the doctor office or hospital has to send that treatment for payment.  Typically, the provider sends a “claim” requesting payment by your insurance company. Without EDI, think about all of the diagnosis, treatments, and formats for the claim.  That claim should now be in X12 837 standardized EDI format.  The provider’s patient management system produces that 837 claim and is sent to the insurance company for payment.  In turn, the insurance company sends a claim acknowledgement X12 277CA and also a X12 835 payment.  In this case, the three-digit code represents healthcare EDI documents.

What is EDI Capable?

EDI capable means that a business can transact information according to the EDI standards.  Organizations that can send and receive EDI in the X12 format is just the start.  There are other areas to consider such as the transport of the file, publishing and understanding companion guides, mapping and translation into your back-office system or claim adjudication software, and all the governance that moves along with the process.

How to Become EDI Capable?

In today’s market, CEOs cringe at the thought of turning down new growth opportunities. This often means scrambling to meet new EDI requirements to land new contracts. Without proven software that is EDI capable or a team of EDI integration professionals, they can quickly find themselves overwhelmed. Be care to select a solution that was built to handle the complexities of Healthcare X12 EDI processing.

Modern EDI solutions should provide automation and pre-built integration that is flexible and scales with your business.

Where do you fit in?  Companies typically fall into two categories:

·        New to EDI, and need to become EDI capable - Did you just land that next large customer and now you need to support sending claim (837I, 83P, 837D) or  EDI 834 enrollment files?  Not sure where to get started?

·        Already EDI capable, but existing EDI software or staff is not up to the growing needs of their business. Is your business out growing your EDI solution?  Do you need to support volume that your existing EDI software falls short and is unable to keep up?  Or, are you only processing a subset of the data and need to parse EDI, validate, and store the complete  HIPAA transaction set?

The keys to EDI success

To become EDI capable, companies need to focus on bringing in the right EDI software and EDI staff.  It’s all about the right people and product.  Once you’ve decided on that, implementation and supporting efforts are the next critical component to become EDI capable:


Deciding on the right EDI product is a daunting task.  It’s important to look at companies that focus on Healthcare EDI solutions because of the unique requirements.  An EDI 837P (professional claim) is far more complex than an invoice (X12 810).  Ensuring the software adheres to industry standards for compliance and can validate against SNIP 1, 2 is paramount. Also, select an EDI solution that is non-invasive to install.  You should be up and running with basic HIPAA X12 EDI processing in days, not weeks. Finally, the EDI software solution should be able to easily scale with your volume and growth requirements.  Caliber Health has been brought into many companies that either tried to build a custom EDI parser, or purchased a product that over-promises but under-delivers. Compare EDI software to discover which EDI capable software technology is right for you and your organization.


EDI is very complex and requires at least a year of knowledge to become EDI capable.  Choosing the right EDI developers and EDI analysts are critical to implement and support your growing business.

·        Hire EDI Staff from within – Finding the right staff can be difficult and requires commitment to get it right.  Typically, good developers can catch on to a well-designed EDI solution, but often times it takes a partnership with an EDI analyst when dealing with transformation and business rules.

·        Outsource EDI Services - Look at a complete Managed EDI Services offering that includes the product, experts, and support SLAs.  Caliber Health partners with Tallan to provide a total product and end-to-end service package.  This offering ensures you time-to-market, adhere to customer’s support SLAs, brings industry EDI knowledge, and an award-winning EDI Software product.

Being prepared for this growth once meant facing the profit bleed of lengthy EDI software development and implementation cycles. The non-developer may ask: “Yeah, but can’t we just hire a temp or outsource a developer.” Yes, but you’d still have to manage the project and provide ongoing support to trading partners and customers. It’s critical to foresee the degree of complexity and costs associated with developing, testing, implementing, and scaling EDI software processes.  To become EDI capable, the staff requires training, retention, and maintaining specialized expertise. Can you find and afford the talent required to make this endeavor a success? What happens when regulations change, and your developer is nowhere to be found? Or, an inefficient EDI parsing process is not up to the task of the volume and scale.  This scenario can quickly spin out of control and your developers begin band-aiding that custom developed EDI solution with file splitting and limiting EDI data ingesting.

Top 10 Requirements to Become EDI Capable:

1.    EDI software that can parse EDI and validate HIPAA X12 Transaction Sets

2.    An EDI product that can automate polling for files, connect to trading partners, and deliver to destinations systems

3.    Optionally, EDI software that can store data into a relational database

4.    EDI developer

5.    EDI analyst

6.    EDI software that can scale

7.    HIPAA compliance, and is built for healthcare

8.    Non-invasive to install, improving time-to-market or hosted in a managed service

9.    Software that supports reuse, making your customer onboarding process simple and fast

10. Support services to remediate rejected EDI files

Or Hire a Managed EDI Service

Many smaller staffed organizations choose to hire a Managed EDI Service to fulfill all of the above requirements.  This can allow time to grow the staff and eventually take over the day-to-day trading partner management functions.

Top 5 Benefits of Becoming an EDI Capable Business

1. Compliant – EDI provides compliant capabilities around data exchange, security, and standardizations.

2. Time-to-Market/Efficiency – Less integration, automated toolsets, and EDI processes cut down on implementation, operational, and administrative slow downs.

3. Accurate – EDI standardization and software provides tools to check data for accuracy either according to the HIPAA or your tradi ng partner companion guide.

4. Grow Revenue – With EDI solutions, you can take on more business quickly.  Onboard more trading partners and focus your time on growing the business, not translating proprietary data.

5. Lower Cost – Reduce manual processes and focus time on EDI automation.  Rework of file handling is greatly reduced and testing/implementation is lowered.

 “We’re here to help you grow, protect, and maintain...customer relationships”

Fortunately, growing TPAs and healthcare software company owners can find confidence in their partnership with Caliber Health, a leading healthcare EDI software firm. We’re here to help you grow, protect, and maintain your trading partner and customer relationships. We take away the communication issues that make it difficult to remain focused on what bring these growth opportunities in the first place, a track record of adding value.

The first step in becoming an EDI capable organization is selecting and partnering with an software provider. Growing healthcare intermediaries can get on the fast track to EDI capabilities with our T-Connect EDI Database Plus SDK Solution. The one thing most of these companies have in common is the need to scale data consumption or the ability to send EDI data in its entirety.

So, what are you waiting for? Come leverage the proven power of EDI software at a cost that won’t scale before you do.  Contact us to schedule a live product demo.