Understanding The Basics of EDI.png

EDI 837

Understanding the Basics of EDI

EDI 837

The EDI 837 is used in HIPAA EDI transactions.  The EDI 837 Health Care Claim concerns the submission of healthcare claim billing information, encounter information or both.

Creating the EDI 837

Like any EDI document, the EDI 837 contains information that is typically found on paperwork or in in-house computer systems.  The first step in submitting an EDI 837 is to translate the "human readable" format into an EDI standard.  In order to achieve this the data must first be placed into an EDI translator.  This can be done manually or through some form of data integration with your in-house system.  Once the EDI 837 data is in the EDI translator the process of converting the raw data into an EDI 837 begins.  This conversion process follows prescribed standards set forth by the ASC X12 standard that covers EDI data used in a number of industries, including HIPAA based EDI transactions like the EDI 837.

Sending the EDI 837

Once your EDI 837 is formatted in an industry-standard form, the next step is to transmit the EDI 837 to its intended recipient.  This transmission can be done using one of two ways - directly to the receiver or through a type of clearing house known as a "Value Added Network" or VAN.  In the second case, the EDI 837 is sent to the VAN in a secure form - often through a dial-up connection - and is then routed to the proper final destination by the VAN.  In this method the VAN acts very much like the US post office.  A second and very popular means of sending the EDI 837 is to use a direct communication method - like the AS2 protocol that uses Internet technologies to send an encrypted EDI 837 over secure communications.  Regardless of method used, once the EDI 837 arrives at its intended recipient, the reverse process takes place to decode the EDI 837 into a document that is understandable and usable by the recipient.

Integrating the EDI 837 Into Your Business

Getting the information into your EDI 837 can be achieved manually, but this process can be time consuming and labor intensive.  Like all EDI transactions, the EDI 837, is made up of segments and codes that are very difficult to understand unless you are an EDI expert.  For this reason a more popular way of building your EDI 837 is to use EDI integration.  Through EDI integration the data required for the EDI 837 is dynamically pulled from your in-house computer system and sent to the EDI 837 in your EDI translator.  Through this form of integration the EDI 837 is created in much faster time and with virtually zero risk of data entry errors.


The EDI 837 we have discussed is part of a larger set of EDI transactions created to address the the Health Insurance Portability and Accountability Act of 1996.  Along with the EDI 837, the HIPAA legislation was created to combat waste, fraud and abuse in healthcare.  While there are no HIPAA "compliant" EDI translators, a number of companies offer HIPAA ready EDI translators that include the EDI 837 and other HIPAA EDI transactions.


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