Electronic Trading Network Vendors Are Struggling over HIPAA EDI

  January 06, 2012       By Ray Atia
Under the Health Insurance Portability and Accountability Act (HIPAA), healthcare providers are required to adopt uniform standards with regards to an Electronic Data Interchange (EDI). EDI transactions primarily involve the computer to computer interchange of strictly formatted documents so as to facilitate communication and lower overall compliance costs. Although commonplace today, EDI was initially a novel concept as it involved the processing of received messages by computer only, as opposed to human intervention. In adopting standards for EDI mandated transactions, one element that a healthcare provider must decide upon is the method used for the electronic transmission of documents. From the 1960s and up into the 2000s, the most popular method was a Value Added Network (VAN). VANs are responsible for routing, storing and delivering EDI documents. More recently, however, companies have turned to the Internet as a means of transmitting documents. Networks that use the Internet for electronic document transmission are called Electronic Trading Networks (ETN). However, whereas VANs are an established presence in the EDI field, ETNs are relatively new. That has meant that many companies promoting ETNs have had financial difficulties. In complying with HIPAA mandated transactions, healthcare providers are thus encouraged to stick with a VAN until ETNs are a well-developed technology.