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White Paper

Intelligent EDI
Next-Generation Revenue-Cycle Management
Capabilities — All within the EDI Data Stream

Optum www.optum.com

Page 1

Intelligent EDI

White Paper

The health care industry’s transition to the 5010 transaction standard generated a great deal of discussion about
electronic data interchange (EDI). Much of the discussion, however, has focused on the “nuts and bolts” of EDI,
such as transaction formats, solution configuration, and clearinghouse capabilities. While ironing out the details of
connectivity and information exchanges during the implementation of 5010, many organizations failed to see the
bigger picture — that EDI is more than just a conduit. It can be a strategic tool to cut costs and increase efficiency.

Although there is widespread use of basic EDI functionality, next-generation EDI capabilities remain largely
underutilized. These capabilities include embedding additional functionality within the EDI data stream to
automate revenue cycle management (RCM) processes, enabling organizations to identify missed revenue
opportunities, improve cash flow, and much more. The functionality that is available through next-generation
EDI is being referred to as “Intelligent EDI,” and promises to greatly transform and improve how organizations
manage their revenue-cycle processes.

What is Intelligent EDI?

Intelligent EDI provides services far beyond traditional clearinghouse capabilities, enabling organizations to
benefit from higher levels of automation and efficiency that results in improved first-pass payment rates for
claims, reduced labor, increased collections and accelerated cash flow. Accomplishing this requires embedding
additional functionality into the EDI data stream and integrating it with the solutions used by providers at
practices and facilities. Examples of this advanced functionality include:

• Clinical and technical editing within the EDI data stream

•

•

Secondary claims submission

Electronic patient statements

• Online patient payments

•

Improved eligibility, claim status and remittance handling

Add functionality within your existing
workflows, rather than adding new systems.

Intelligent EDI Workflow

Optum Clinical Editing
Claims Manager

• Professional & facility

claims

• Medicare & commercial

payer clinical edits
• Checks against claim

history

Claims &
Clinical Edits

Practice Management
System / Hospital Patient
Accounting

• Charge entry
• Charge entry work queue
• Charge/postings/claims

processing

Claims

Clearinghouse / Gateway
Optum Intelligent EDI

• Reviews claims for ANSI

X12/HIPAA editing
• Send claims to Optum

Claims Manager for clinical
editing

• Presents edits for correction
• Sends claims to payer

Claims &
Remittance

Payer

Payers

• Claims adjudication

Remittance Information,
Denials, Rejections

Optum www.optum.com

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Measurable Results — By using
Intelligent EDI, providers can save:

•

•

•

•

•

$2 for every copayment that is
collected while the patient is onsite

$3.70 for every claim that pays on
first pass

$3.40 for each new electronic claim
status request

$15 to $37 for each claim rework
that is prevented

$2 for every reimbursement that is
posted automatically

The Bottom Line — These incremental
automation and efficiency improvements
add up to substantial savings.

Source: Potential savings reported by the Center
for Health Transformation in situations when EDI
capabilities are fully leveraged.

Intelligent EDI

Intelligent EDI allows providers to accelerate payments by submitting cleaner claims the
first time. This is accomplished by catching claims rework at the least costly point —
before claims are submitted to payers. Powerful scrubbing capabilities identify claims
needing technical or clinical edits, and tools embedded into the solution allow providers
to correct errors and submit the claim for payment.

Increasing efficiency is a primary focus of the Intelligent EDI concept. Adding
functionality within existing workflows — and automating processes — allows providers
to boost their efficiency without redesigning processes. Furthermore, Intelligent EDI
solutions are designed to complement — rather than replace — the solutions that
providers already have in place, whether they are practice management systems, or
hospital information systems. Essentially, Intelligent EDI provides a layer of tools and
management capabilities that resides between a provider’s existing solutions and the
payers that process the claims. With a single solution, providers can manage their entire
revenue cycle — eliminating the multiple systems and inefficient processes used to
accomplish these business functions in the past. This design allows providers to benefit
from new functionality without having to “rip and replace” their existing solutions.

Intelligent EDI Features. . .

Web-based

Integration:
No need to
“rip & replace”
systems

Timely and
accurate
payments

High
automation/
efficiency

Single
solution

Drive Results

Identify
missed billing
opportunities



Reduce
operating
expenses



Increase your
margins



Accelerate
payments

Intelligent EDI Benefits

Intelligent EDI is designed to accelerate payment processes, which reduces accounts
receivable and helps providers boost their cash flow. Rather than focusing on first-
pass rates for claims, Intelligent EDI solutions measure “first-pass payment rates.” This
measure accounts for whether the claim was accepted by a payer on the first pass, and
if it was ultimately paid. The result is a more meaningful representation of clean claims
rates, since some claims can be accepted by payers, but pended for review. Intelligent
EDI users can experience first-pass payment rates as high as 97.5 percent.1

Additionally, Intelligent EDI helps providers increase revenue by identifying missed billing
opportunities. Positive edit capabilities within the solution alert users when potential
codes or modifiers are missing from claim. This enables users to review and correct
errors before submission to earn full reimbursement for all the care that was delivered.

Optum www.optum.com

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Intelligent EDI

Intelligent EDI Benefits

Submit cleaner claims
the first time to
accelerate payment

Alerts identify potentially
unbilled services

Increase Revenue

Reduce Costs

Improve Workflow

Competitive Advantage

Catch and correct claims
errors at the least costly
point — before they’re
submitted to payers

Eliminate inefficient
manual claims handling
with automated
processes that reduce
overhead and improve
accuracy

Benefit from higher
levels of automation
and efficiency that
results in improved
first-pass payment
rates, reduced labor,
increased collections and
accelerated cash flow

Transform labor-
intensive chores into
automated processes

Strengthen the
performance potential
of your organization
by optimizing billing
and reimbursement
processes

Eliminate waste and
simplify workflow
to advance the
performance of your
organization

Physician Alignment/
ACO Formation

Boost administrative
efficiency and revenue
flow while freeing
physicians from the
time they spend
corresponding with
payers

Prepare for ACO
formation by connecting
community physicians
with the most powerful
EDI technology

Furthermore, the additional functionality that is embedded in Intelligent EDI solutions
enable organizations to benefit from higher levels of automation and efficiency. From
eligibility checking to payment posting and reconciliation, automated processes reduce
manual tasks and the time that is spent corresponding with payers. Research shows that
the average practice spends more than $68,000 per physician, per year, in time spent
interacting with payers.2 Automating inquiries and transactions with Intelligent EDI can
help reduce these costs. Another study shows that the typical solo physician practice can
save more than $42,000 per year by using EDI to eliminate manual processes.3

Details: Next-Generation EDI Capabilities

With Intelligent EDI, additional functionality is embedded into the EDI data stream and is
integrated with the solutions used by providers at practices and facilities. Clearinghouse
services form the foundation of Intelligent EDI solutions, and capabilities may include:

•

•

Primary and secondary claims submission — File secondary claims electronically
to reduce billing costs and accelerate payment.

Claim tracking and management — Actively track, control and prevent denied
claims using tools embedded into the EDI data stream.

Advanced capabilities that can be embedded into Intelligent EDI solutions may include:

Advanced Clinical Editing — Real-time claims editing capabilities are embedded
within the EDI workflow, enabling organizations to review and edit claims before payer
submission to achieve higher first-pass rates, and leverage positive edits to improve
revenue. The result is reduced claim denials that necessitate rework, and increased
collections that improve cash flow.

Optum www.optum.com

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Intelligent EDI

Eligibility Verification — Data within the 271 eligibility response transaction is used by
Intelligent EDI to reduce denials and follow-up calls with payers. Intelligent EDI solutions
integrate with participating payers for patient eligibility checking, and can even verify
and correct information in provider databases to eliminate inconsistencies. Prompts alert
providers to include payer-required information in inquiries, such as National Provider
Identifier (NPI) numbers.

Electronic Remittance — This capability allows hospitals and physician practices
to receive electronic remittance advice (ERA) from participating commercial and
governmental payers. The solution automatically posts payments to the correct accounts
to save time and reduce labor costs. ERA information and explanation of benefit
(EOB) statements are saved electronically for easy access to expedite secondary claim
submissions.

Transaction Testing and Validation — Test X12 transactions for HIPAA 5010
conformity, fix errors, and certify compliance.

Patient Statements — Take the hassle and expense out of patient billing by
outsourcing the process. Simply generate an electronic file, transmit it to the outsourced
service provider that outputs and mails the statements. All of this can take place from
within the EDI data stream. Easy-to-read bills and statements improve patient collection
and speed recovery of amounts owed with online payment capabilities.

Online Patient Payments — Online portals provide patients with a convenient option
to view statements, make payments online, and even enter into payment plans. The
increased convenience improves collection rates and patient satisfaction levels.

Optum Intelligent EDI

As a leader in the health care clearinghouse market place, Optum is continually striving
to enhance and streamline its service offerings. Within the past year, Optum has further
integrated its EDI solution offerings to create Optum Intelligent EDI, which numerous
health care organizations are already using.

Optum Intelligent EDI is focused on providing the most timely and accurate payments
that technology can deliver. Intelligent EDI integrates within the existing claim
submission workflow processes at hospitals and physician practices, and connects with
virtually all practice management and hospital information systems. Powerful inquiry
and reporting capabilities enable billing staffs to determine the status of transactions in
real time. Enhanced capabilities within Intelligent EDI include clinical editing, contract
monitoring, payment variance detection, and the ability to accept online patient
payments. Users can even calculate expected payments prior to submitting claims. All of
this provides the foundation for an optimized revenue cycle with improved cash flow.

In addition, Intelligent EDI offers advanced EDI communications capabilities, combined
with proactive claim and payment handling capabilities, that increase productivity and
reduce the time spent corresponding with payers.

Optum www.optum.com

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Intelligent EDI

Industry Initiatives Demand Enhanced EDI Capabilities

With organizations across the industry looking to increase efficiency and reduce costs,
investing in an Intelligent EDI solution is a logical choice to address key strategic issues.
In addition, numerous industry initiatives are requiring increased connectivity and
information exchanges to meet the demands of new approaches to care delivery. These
initiatives include health information exchanges (HIEs), accountable care organizations
(ACOs), and various quality measurement programs.

Intelligent EDI meets the requirements of these industry initiatives by easily connecting
disparate technologies, as well as by integrating clinical and claim information within an
organization’s existing workflows. With Intelligent EDI, organizations can transform the
tangle of labor-intensive chores into a single automated process. Investing in Intelligent
EDI helps organizations create the backbone for future HIE efforts, and prepares them
for the formation of ACOs that are taking place across the country.

Notes

1. Optum customer experience.

2. Medical Group Management Association study: “The Costs to Physician Practices of

Interactions with Health Insurance Plans,” 2009.

3. Milliman: “Electronic Transaction Savings Opportunities for Physician Practices,” 2006.

About Optum

Optum is a leading information and technology-enabled health services business
dedicated to helping make the health care system work better for everyone. With more
than 35,000 people worldwide, Optum delivers intelligent, integrated solutions that
modernize the health system and help to improve overall population health.

What Customers Say About Optum
Intelligent EDI

“Intelligent EDI not only saves us money,
but it makes us money as well because
we get paid more quickly, and it has freed
up our time so that we can more easily
pursue problematic claims.”
Valerie J. Siegel
IT Director
Peak Wellness Center

“We have been able to significantly
reduce claims denials and AR days, and
improve staff productivity.”
Tracy Essling
Dreyer Medical Clinic, Aurora, Ill.

“Patient Statement services streamlined
our billing workflow considerably. This
process takes one minute per day to
complete, and saves us more than
$16,800 per year in direct costs.”
Jeff Harpster
Pediatric Sub Facility, Orange, CA

For more information about
Optum, contact your Optum sales
executive at 866.322.0958 or email
perform@optum.com.

www.optum.com

13625 Technology Drive, Eden Prairie, MN 55344

All Optum trademarks and logos are owned by Optum. All other brand or product names are trademarks or registered marks of their
respective owners. Because we are continuously improving our products and services, Optum reserves the right to change specifications
without prior notice. Optum is an equal opportunity employer.

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OA100-9364 03/13 © 2013 Optum, Inc. All rights reserved.