Examining Paper And EDI
Twenty years ago, people talked about a checkless/paperless society. With EDI (electronic data interchange), will paper go away? Not according to some of today's imaging VARs.
In the December, 1999 issue of Business Solutions, Jay Linhart and Burdett Hallett of Matrix Imaging (Costa Mesa, CA) assured us that the imaging market is strong - in its infancy, in fact. But what about EDI? The Federal Government has mandated that health insurance companies be able to accept paperless EDI transactions by 2002. What will that do to the scanning market? Does Alan Shaw, owner of imaging VAR InTech Solutions (Concord, CA), worry? No. In fact, like the gentlemen from Matrix Imaging, he is excited about the future of imaging.
EDI allows companies to communicate information electronically. It's similar to e-mail, but follows a standard protocol so that two different companies' computer systems can understand each other. In the health insurance industry, clearing houses convert patient claim forms and provider bills into digital form. They send them electronically to insurance companies for verification and payment processing. An EDI message contains data elements, each of which contains a fact, such as a patient name, or case number. The entire string is called a data segment. One or more data segments make up a transaction set. It's the entire transaction set that makes up what we would think of as a business form, such as a claim form or an invoice. "I wouldn't compare paper-based scanning solutions and EDI as competing technologies," said Shaw. "I would combine them for the ultimate solution. Even though EDI is the best solution for many business interactions, corporations will be burdened with managing and storing paper documents indefinitely."
EDI And Paper-Based Imaging Medical forms such as the HCFA-1500 (generated from a doctor's office) and the UB-92 (generated from a patient's hospital stay) are the EDI element for Kaiser Permanente (a large health maintenance organization). There is no paper and no data entry involved. The records go through electronic systems at the hospitals where they are formatted into EDI.
"You need a trading partner agreement," explained Shaw. "The hospitals sign up with an intermediary company that handles the data exchange for them, and Kaiser signs up with the same data warehouse. The warehouse transfers the data to Kaiser."
When the data comes into Kaiser, it's mapped through Shaw's workflow program to the main database. "With my workflow product," Shaw continued, "I made a custom viewer for EDI. All Kaiser's examiners need to do is adjudicate (decide whether to pay the claim). The data entry is removed from the scene."
Paper Process Speeds Up
Some companies don't have the means to submit a claim electronically to an intermediary company. Those are the companies that submit paper documents directly to Kaiser Permanente. They physically mail or fax their documents, and those documents need to be scanned.
"Kaiser also requests copies of patient charts for audit purposes," said Shaw. "A patient's chart can be a hundred pages. All of those are either faxed to Kaiser, or photocopies are mailed."
Just because a transaction started on paper, it doesn't mean that processing will take as long as it used to. Scanning enhances document management. Once a document is scanned, it can be viewed simultaneously by workgroups that are geographically separated.
"In the old days," said Shaw, "businesses operated at the speed of interoffice mail. Companies had to distribute work via couriers. Imagine if the courier got into an accident and the paper was destroyed. A company has a responsibility to its clients to store information safely."
Shaw developed a document management program for Kaiser that takes both the imaged files and the EDI files and routes them to the proper location in the database. "Instead of User X getting up, taking a piece of paper and putting it in someone else's in-box, the process is done electronically. Our workflow systems are all SQL databases on Sybase backed up via tape," noted Shaw.
"The Real Value-Add"
Both EDI and digitized paper-based documents are not only more secure, but each document can be tracked via a report system. A supervisor can monitor how documents are aging. Before document management systems, employees could avoid a troublesome document by pushing it under a pile of paper or conveniently "losing" it. "The real value-add," said Shaw, "is customizing into the existing legacy system. Most companies already have a mainframe system that works. They have a substantial investment in it. They need something that will sit on top of their system and make it more efficient. You add value by integrating it so tightly with their existing system that it appears to be one system.
"People have a fondness for paper," said Shaw. "It's going to be around for a long time. We have to find more ways to manage paper."