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HomeTECHNOLOGYEliminate the EDI 834 Challenges by Outsourcing EDI Solutions

Eliminate the EDI 834 Challenges by Outsourcing EDI Solutions

Did you know that the Healthcare EDI market is expected to reach around $ 4.4 billion by 2025? This growth in the market is due to the changes in the regulations of transaction processes. These changes were made to curtail the exorbitant healthcare costs, the need for efficient management of electronic claims, and reimbursement of transactions.

The COVID-19 pandemic impact is known to everyone. The massive number of patients visiting healthcare on a daily basis was rapidly increasing when the pandemic was at its peak. Managing the voluminous data became even more challenging for the healthcare industry. 

Realizing the need for streamlining and standardizing everyday patient data, along with insurance data transmission, the Patient Protection And Affordability Act also, known as the Obama Care Act was passed. The Act aimed at enhancing the affordability and quality of health insurance while mandating the EDI 834 transactions for healthcare providers and payers. 

This Act and the pandemic, affecting thousands and lakhs of people’s health, together became reasons to adopt EDI for the healthcare industry in the US.

Despite the rising adoption, the most common hurdle that healthcare providers face is the cost of implementation associated with it, followed by inadequate internal systems and much more. 

The tangible costs of implementation are the reason why EDI solutions have lower acceptance among the small and mid-sized care providers, which also prevents them from leveraging tangible benefits. 

Limitations and Challenges With EDI 834

The limited success witnessed with EDI varies, depending on the use of healthcare EDI in organizations. Many factors, such as limited IT resources, limited financial strength, or relatively running a small business to implement EDI can be challenging for care providers. 

EDI 834 being a vital transaction set in the healthcare industry, must be processed smoothly, but most companies fail to attain smoothness due to common issues and pitfalls mentioned below.

  • Order of Transaction Types

EDI 834 is a combination of multiple types of source systems. When sources are not aligned or streamlined, the file may appear illogical or out of order, which further impacts accuracy in membership records as well as inaccuracy. 

  • Membership Rules 

Every care provider has its own customs rules set for data validation which also ensure precise benefit membership. These personalized rules and policies for enrollment make file loading complex and risky. Additionally, a few EDI software treats 834 transactions as a Black Box, making it more difficult to process.

  • Manual Intervention

Care providers who haven’t integrated automated EDI systems or validation to handle the complexities of managing EDI parsers and high EDI volume may lead to labor-intensive and hands-on effort jobs. 

  • Large Monthly Files

Similar to the heavy EDI volume of data validation or EDI parser, care providers also have to manage and maintain process-intensive open enrollment periods, which cannot be done without human manual intervention making it a time-consuming affair.

  • Not Differential Transactions

When a receiver receives the entire snapshot of the transaction EDI 834 membership file, he checks for data differentials. The process of checking the differential is usually through software logic, but sometimes it also depends from person to person, which makes it even difficult to call a transaction accurate.

  • Variation in 834 Standards 

Companies using EDI systems are bound to follow the ANSI x12 EDI standards to deliver accuracy and security of transactions. The complexity rises when one of the trading partners is not following the same. When these traders send transaction files, other partners have to rework by fixing data variation in the backend for accuracy.

  • Corrupted Files

It is a simple rule that invalid formatted files must be rejected. If the rejected files list is extensive, it will definitely take your time to recollect data and understand the reason behind their rejections. Additionally, correcting them also takes up a lot of time.

  • Matching Logics

One of the requisites for effective EDI transactions, be it 834 or any other. Fuzzy matching algorithms may put values that do not match the system, causing a loophole and mismatch transactions. 

  • Subscribers versus Dependents 

Member records that are out of order are a pain for care providers to maintain accuracy in records and transactions. The real impact on EDI 834 processing occurs when the traders have to group and identify the dependents of each subscriber.

When surveyed, the revenue loss in American hospitals was as high as 20% – 30% due to self-pay billing issues. In addition, as per the Ponemon Institute survey in 2014 of healthcare professionals, it was observed that US physicians and hospitals were unable to use the latest technologies, devices, and systems to deliver requisite patient care. Other than this, US hospitals are also struggling with security and privacy concerns.

Here, outsourcing EDI is observed as the best solution to deal with all problems. Outsourcing a third party to manage the entire process of EDI to exchange data with trading partners releases the care providers to focus on other crucial tasks and functions.

Connecting With Right EDI Partner For Outsourcing

Computer transactions are much faster and more accurate than human manual calculation, hence the evolution of EDI transactions has been successful as it can identify patterns to outperform humans. 

The HIPAA standards set rules for critical data transmission are categorized as per type, form, and shape for every EDI provider to follow for delivering accuracy in information exchange. Associating with EDI managed services ensures that you get standardized data transmission as well as solving all your implementation needs and future integration needs. 

You can pick the EDI solutions suitable to your business needs, but before that you need to evaluate the kind of model that fits your business needs & culture.

Model for Direct/ Individual Connection

It is the simplest model of all models as this model allows you to reach every business partner or trader individually through a direct communication channel. 

However, reaching one-on-one can be time-consuming, but this model is suitable for those who want a separate communication channel with each trader. 

Network Model 

This model offers a secured medium – VAN to connect with all business partners. An outsourced EDI provider can quickly facilitate the right approach.

This model also removes the complexity to translate the documents before exchanging them with partners. 

Cross-Connection/Hybrid Model

This model is mostly used by managed providers for establishing quick and reliable connections between partners within organizations. This model is best used for high-volume documents exchange while managing low-volume documents. 

How Managed EDI Service Providers Can Assist?

Outsourcing your EDI services ensure consistency, streamlined, and competency. You are free from the stress of underlining the right model implementation as well as hiring proficient staff or training the staff or even integrating the requisite resources . 

Managed services can be provided by the IT professional services providers to ensure alignment with the changing needs and culture of the market and much more. 

Advanced Technology Integration

Outsourcing your EDI solutions leverages you to integrate right and new technology trends. Without spending much, EDI providers can keep you updated on the current market as well as create a roadmap that can help you cope with the rippling market or trends.

Solution For Every Business

The most crucial point for any organization, especially the small and mid-sized, to opt for outsourcing is cutting exorbitant costs to implement EDI. Outsourcing EDI does not require any expensive infrastructure or trained staff. Outsourcing gives you an agile and vigilant team assisting you at every step to manage and maintain your EDI solutions.  

Simplified Solution

Associating with a managed EDI service provider gives you the most simplified solution to manage your EDI system. They can manage as well as amplify your backend systems integrated with third-party apps, such as ERP or CRM solutions. Managed providers reinforce data accuracy while escalating the cost to stay competitive in the market.

Diverse Skill Set

Companies lack the requisite resources and incompetency to scale in the changing market. To overcome these challenges, companies can quickly collaborate with competent and adroit EDI service providers, who not just adhere to the standards but also handle complex steps from supporting hardware, software, and applications to implementing EDI and mapping utilization. 


The EDI providers are more flexible than any in-house team offering customized solutions proportional to your business needs and culture. They can detect and analyze the loopholes and recommend the best practices to mitigate them.

Future of EDI

Since people are drifting towards using handheld devices more, the mobile EDI segment is expected to grow at the highest CAGR. The factor that is accelerating the growth is the technological upgrades. 

The service segment in the healthcare industry is growing speedily due to increasing claim volumes, increasing complexity, and scalability of EDI solutions. Outsourcing EDI solutions offer a myriad of solutions, such as revenue cycle management, claims to handle, and management that propels growth.

We see that the healthcare EDI market has the largest share of claim management. The healthcare EDI integration is precarious and time-consuming, requiring efficiency and skill as well as alignment with the changing market trends.

But the adoption of EDI services by healthcare providers and payers needs a meeting of regulatory standards for accuracy. 
About the Author: The author of this blog, Scarlett Brown, works with the enterprise software development team at A3logics. She has been associated with the organization for over a couple of years and is often found working on various ecommerce software solutions projects. In her leisure time, she loves to enjoy her coffee with an Agatha Christie mystery.



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