Do You Know How HIPAA Came Into Effect?

In the previous blog, it was discussed how important is HIPAA compliance for adopting EDI in American healthcare system. It is however, imperative to discuss the history and evolution of EDI.

Everyone is well-aware with Health Insurance Portability and Accountability Act (HIPAA), but where it came from?

In 1991, Workgroup for Electronic Data Interchange (WEDI) was created in correspondence to the rising concerns for increased healthcare costs. Eventually, WEDI led to the enactment of HIPAA as majority of its directives were based on WEDI recommendations. Thus, in 1996, HIPAA was signed into law and American healthcare system changed as every move was led by and according to HIPAA. Prior to it, over 400 different patterns of medical forms were used, but later, EDI was mandated and everyone was required to use the EDI format.

HIPAA - TeemWurk

There were many reasons associated to EDI implementation in healthcare. Paper usage was time consuming as well involved increased probability of human errors. Even the research studies estimated that EDI can save approx $20-$40 billion in the healthcare industry. Even in the industry, healthcare insurance section has seen maximum changes in HIPAA mandates. These include EDI healthcare forms 834 (Benefits Enrollment), 270 (Healthcare Eligibility Inquiry), 271 (Healthcare Eligibility Response), 837 (Healthcare Claim), 276 (Healthcare Claim Status), and 835(Healthcare Clam Payments).

The major issue that HIPAA and EDI resolved was that of security and privacy of critical data. In fact, today majority of individuals consider HIPAA as a security and privacy law! Whereas, EDI is considered as a mechanism that allows critical patient information to be transmitted through a secured channel.

Later, security provisions went into effect for all covered entities. Every EDI Tool must be well-structured and formatted to comply with the guidelines. TeemWurk has been providing secured Benefits Enrollment Administration with complete compliance with guidelines and also guiding users to select their plans wisely.


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