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©Copyright Innovate E-Commerce Inc., - ITS 2001.
Electronic Data Interchange (EDI) Training
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Agenda
• Change Management
• Getting Started
• Outsourcing or Insourcing
• Building an EDI Infrastructure
• Responsibilities and Job Descriptions
• Return of Investment (ROI)
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Change Management
• Usually the Biggest Challenge for an EDI Project• Create a Cross-Functional Team to Minimize Resistance• Outside Expertise May be Needed• Prepare Education for Internal and External People• Resistance to Changing the Old Ways of Doing Business
• Fear of Change• Fear of Technology
• Electronic Interchange Fundamentally Changes Entire Business Processes
• Good News is that EDI Provides a Tremendous Opportunity to Reengineer the Business Process
• Opportunity to Improve or Eliminate Inefficiencies
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Change Management
• You May Not Have to Comply to the HIPAA Requirements but Your Trading Partners Do
• HIPAA Requirements May not All Be Defined, but Time is Running Out
• Implementation of New Processes and Technologies
• Training and Retooling of Staff May Be Required
• New Policies and Procedures Will Need to be Adopted
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Getting Started
• Document Business Process
• Document Information Flow
• Develop an Implementation Guide
• Develop a Trading Partner Agreement
• Identify Your Trading Partners
• Perform Gap Analysis
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Assessment Model
Analysis of Trading Partner
Requirements
Analysis of Trading Partner
Requirements
8 Stages for An Effective Assessment8 Stages for An Effective Assessment
Analysis of Current EDIDocuments
Analysis of Current EDIDocuments
Perform Communications
Assessment
Perform Communications
Assessment Analysis of
Audits andControls
Analysis of
Audits andControls
Analysis of Information
Flow
Analysis of Information
Flow
Analysis ofBusiness Process
Analysis ofBusiness Process
Analysis ofApplicationInterfaces
Analysis ofApplicationInterfaces
Analysis for Pre/PostProcesses
Analysis for Pre/PostProcesses
Business Process - Contracts
Contract is signed with Provider
Contract infoentered into
MOMS
NCAS VendorInfo
If Vendor onFile
MOMSSystem
Vendor Info Sent toOSC
Vendor InfoDownloaded Daily
into MOMS
No
Enter Provider Info
Yes
Claims can now bemade against
contract
If ClaimsRejected
Contractmay be
reviewedby
Purchasing
Quarterly Meeting Heldto discuss policies and
procedures
Yes
NO
UN AuthorizesWhat Proceduresare approved at
this Facility
UN Authorizes anyException Drugs
Contractmay be
canceled
Vendor InfoEntered into NCAS
Utliliation NurseGoes to Provider
Business Process – Page 1
Claim Received byProvider
DC702 Form isreceived by DOC
Prison Creates DC702 Form to
Authorize Payment
Claim is Date Stamped
Claim isbatchedby Date
Claims areplaced into
Inventory by date
A full dayof claimsare taken
to beprocessed
If RegisterClaim info inentered into
MOMS
ExaminerreviewsClaim
Status is setto 2
No
Yes
CritialErrors arecorrected
WarningErrors
arereviewed
If ExaminerOverrides
ExaminerOverrides
Error
ManagerOverrides
Error
If Audit
If okay forPayment
Flag is set to evaluateExaminer or Register
work
Yes
No
Yes
No
Examiner SetsStatus to 3
MOMS processesClaim for Payment
Page 2Audit Report is
Printed
WarningMessages
are reviewedto determine
if criticalerrors
Claim mailed to Prison
Claim is Mailed to DOC
Status is set to 1
If Okay
Yes
No
A
Business Process – Page 2
Claims stored off-site
Page 1MOMS Uploads to
NCAS 3x week
DOCClaimssent toNCAS
NCAS Pays Claimbased on infofrom MOMS
If FundsAvailable
Claim is in Queuefor Payment
If Okay to Pay
Claimsinfo sent
toMOMS
Claim status ischanged to 4
(Fully Processed)
If ClaimApproved
Rejected ClaimsReport
Explanation ofPayment goes to
Provider
Explanation is Mailedto Provider
A
Yes
Yes
No
Yes
No
If > 1 year
Claims arestored for
One Year atDOC
Pay to $
Check cut for Provider
Check Mailed to Provider
Claim is rejectedfor payment
B
B
No
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Paper Claim
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Perform GAP Analysis
• Identify All Fields on Paper Claims
• Identify All Fields in Application File or Database
• Identify Manual Intervention within Process
• Determine Which Data Fields Are Needed
• Mandatory Application Fields
• Mandatory EDI Fields
• Mandatory by Trading Partner
• Determine How to Automate
• Cross Reference Tables
• Available from Trading Partner
• Fixed or Predefined Value
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Identify Your Trading Partners
• Conduct a Trading Partner Survey
• Prioritize Your Trading Partners
• Volume
• EDI Readiness
• Willingness to Help You Overcome Learning Curve
• Obtain Trading Partner Specifications
• Develop Implementation Guide for Trading Partners
• Develop Trading Partner Agreements
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Gap Analysis of Data
Fields from Paper Claim Fields from Database EDI
Claim Type BHT06
UR Authorization
Group Number
DRG Code
Primary payer subscriber: Department of Corrections
Subscriber address: street N301
City N401
State N402
Zip N403
Sex: Inmate - Male/Female
DOB: Inmate - Date of Birth
Federal TIN
Contract ID
Services ID
Patient Control Nbr
Admission Date
DC 702
Accrual Indicator
Medicare Ins. ID
Payer ID #
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Findings to Date for Department of Corrections (DOC)
• 6700 Claims were Processed within a Two Month Period
• May 15 - July 15
• Claims had 9300 Line Items
• Even with One Person Doing Data Entry (Register) and One Person Reviewing (Examiner) Keying Errors were Made
• A $25,000 Payment was Approved for a $2,500 Claim
• Error was Caught through an Audit before Check was Cut
• 15 Warning Errors can be Manually Overridden
• 22 Critical Errors Can Occur During Manual Entry
• Gap Analysis is Still in Process
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Insourcing Versus Outsourcing
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Outsourcing - Clearinghouses
• A Clearinghouse Facilitates the Movement of Electronic Claims From the Producer of Claims (the Billing Service, Usually a Medical Office) to the Payer of Claims (Mainly Insurance Companies). In the Process, the Claims Are Edited and Validated to Insure They Are Error Free. The Claims Are Then Reformatted to the Specifications of the Payer and Sent Electronically to the Payer.
• Not All Clearinghouses Are Created Equally - Some Clearinghouses cannot Process All Types of Claims or EDI Documents
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Outsourcing – Application Service Provider (ASP)
• An Outsourcing Facility Is Usually an Industry Leader in the Field of EDI, Specializing in EDI Implementation and Systems Integration. One of Its Most Popular Services Is Outsourcing, in Which Services Become the EDI Department for Your Corporation, Running Your Daily EDI Operations From Their Offices or Facilities.
• EDI Requires an Amount of Tedious Work That Has to Be Done, From Archiving and Retrieval Services for Transactions to Setting up Trading Partners. By Utilizing an Outsourcing Company Your Staff Can Focus on Becoming More Versed in Business Processes, Not Technical Details.
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Insourcing - ITS
• Insourcing Establishes an IT Capability In-house As a Core Competence Inclusive of Staffing, Organizational Design, Process Definition, and Establishment of Services and Associated Service Level Agreements .
• INSOURCING Involves Choosing IT Specialists Within ITS to Develop and Support Your System.
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Clearinghouse - Advantages
• Provide Paper to Electronic Submission for a Faster Claim Process
• Provide Software Specific Modules Per EDI Claim
• Provide Standard Set of EDI Maps
• Tend to Be Specific to Healthcare Industry
• Are or Will Be HIPAA Compliant
• Claims Are Edited and Validated to Insure They Are Error Free.
• EDI Specialists Available
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Clearing House Disadvantages
• Provided Software Requires Training and Additional Time for a Learning Curve
• Limited by the Standard EDI Templates of the Clearinghouse
• Dependant on Data Entry Services of Clearinghouse, for Paper to Fax Submissions
• Free Software Provided May Not Be Accepted by All Your Trading Partners
• Claim Information Sometimes Must Be Entered a Second Time to Use Carrier-supplied Software
• Claims Are Edited and Validated to Insure They Are Error Free. This Is Done Manually and Requires an Additional Point of Entry
• Risk Management May Be Increased
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Outsourcing Advantages
• The EDI Skill Set Is Focused on Messages and Data, Not Necessarily Requiring Your EDI Staff to Be In-house
• Additional Resources Readily Available Compared to the Value of the In-house Staff of EDI Experts
• Allows Your Agency to Focus on Staff Budget With the Exclusion of the EDI Development Staff
• EDI Requires an Amount of Tedious Work That Has to Be Done, From Archiving and Retrieval Services for Transactions to Setting up Trading Partners. Outsourcing Reduces the Time Your Personnel and Staff Is Distracted From Current Business Processes and Practices at Hand.
• Risk Management May Be Reduced. Outsourcing Companies Will Not Alter Your Secured Data
• Audits and Tracking Software Is Availability• Single Point of Contact for Entire EDI Solution and Support• EDI Specialists are Available• May Already Have Relationship with Your Trading Partners
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Outsourcing Disadvantages
• Outsourcing May not be the Less Expensive Solution
• An Outsourcing Company, Which Has No Organizational Ties Your Company Will Handle All Your Documents with Your Trading Partners. This Is a Visible and Important Function You Place in the Hands of a Third Party
• Has Expertise in EDI but not Your Agencies’ Processes
• Does Not Know Your Internal Policies and Procedures
• May not Have an End-to-End Audit and Control System
• Your Implementation Schedule May be Delayed if You Do Not Give the Outsourcing Company Ample Notification
• May not Provide an Enterprise Wide Solution
©Copyright Innovate E-Commerce Inc., - ITS 2001.
In-house Advantages
• Your IT Staff’s Responsibility and Security Protects Your Investment and Provides Complete Control Within Your Secured Environment
• Overall Cost Is Reduced to In-house Staff• No Additional EDI Training Required within the Agencies• State Processes Are Understood Within ITS• Knowledge of Statewide Policies and Procedures• Knowledge Transfers Are Not Needed Within Each Agency or Department• Developing an E-Commerce Gateway• Developing End-to-End Audits and Controls for All EDI Documents• Provides an Enterprise Solution• Outside Expertise is Part of Initial Team for Knowledge Transfer• Identified Other Agencies with EDI Requirements
©Copyright Innovate E-Commerce Inc., - ITS 2001.
In-house Disadvantages
• EDI is a New Application to ITS
• EDI Translation Software has not been Selected
• Project Scope not yet Defined
• Developing a Project Team
• Learning Curve of Agencies’ Applications
• Define New Information and Processing Requirements
• Overall More Time and Resources Dedicated In-house
• Lack of Best Practices Knowledge
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Core EDI Processes
CommunicationsCommunications
• EDI VAN• Direct Connections• Internet• Mailbox• VPN• Dial-up• Frame Relay• Leased Lines• Async, Bisync
TranslationsTranslations
Application Integration
Application Integration
• EDI • XML• Proprietary Files• Flat File• Financial Transactions
• File Interfaces• Scheduling• Interprocess Transfers• Tracking to Application
Community Management Process Optimization Interface File Optimization
Audits and ControlsProactive Problem Resolution Help Desk
Formatted Message Exchange
Consolidated EDI Infrastructure • EDI/XML Server• Message Management• Mail-boxing Service• Communications Gateway• Audit and Controls• Support Management• EDI Translator• E-Payment Gateway• XML Parser
FirewallInternet
VANs
Direct Connects
Trad
ing
Partn
ers
In
tern
al P
artn
ers
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Building an EDI Infrastructure
• Communications Gateway
• Mapping Capabilities
• Application Gateway
• Audits and Controls
• Security
• Data Center Support
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Communication Gateway
• Value Added-Networks (VAN)
• Internet
• Support Multiple Protocols
• TCP/IP, Bisync, Async, PPP, SL/IP, Frame Relay, ISDN, T1, Web Connections
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Mapping Capabilities
• Translation Services
• Mapping
• Trading Partner Enrollment
• Develop Implementation Guides
• Problem Resolution
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Application Gateway
• Integrate to Third-Party Software• Integrate to Application-Specific Intermediary Files (In-
house Developed)
• Integrate from EDI Interface Files to Business Applications
• Auto Restart Capabilities to Resend or Repull Application Data When a Failed IP Connection Is Restored
• Schedule and Manage Export and Load Programs by Application
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Current Audit and Control Realities
• Many E-Commerce Transactions are Lost Due to a Lack of Integrated Tracking and Reporting Capabilities
• Most E-Commerce Infrastructures Lack Complete End to End Tracking of E-Commerce Transactions
• Multitude of Back End Applications, Data Manipulation (Translators) and Communications Vehicles Are Employed in an Enterprise
• New Data Types Including XML and Web-Based Forms Add Significant Complexity
• Lack of Integration Between Systems Means Data Is Difficult to Integrate
• Tracking of Documents/Transactions Is Usually a Manual Process
An Integrated System to Track and Provide Exception Reporting on ALL E-Commerce Transactions is Required
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Audits and Controls
• End to End Tracking of ALL E-Commerce Transactions• Translator, Application, and Communications Mechanism Independent• Scalability Across Multiple Servers• Needs to Provide Hooks to Back-End Applications• Triggers Specific Applications on Agencies Servers • Integrates Tracking of Transactions Down to Document Level• Monitors Entire Process for Exceptions• Proactive Exception Notification • Preemptive Problem Notification Processes for Detection of Missing Application
or EDI Data Files, Failed IP Connectivity and Absence of a Business Response for Data That Was Pushed to Agencies’ Servers.
• Cradle to Grave Business Data Tracking Capabilities to Ensure That No Data is Lost at Any Point in the Business Documents Life Cycle
• Integrated Communication Software Error Log Tracking
Manual Audits and Controls
Claims
Payments
Dist
Whse
EDI
XMLWeb-Forms
Direct ConnectDial-up
Providers
Manufacturers
Citizens
Suppliers
Internal Applications
Fin
External Application
CommunicationsTranslations
ProprietaryFormats
Ship
VAN’sInternet
Etc.
Data
AuditAudit
AuditAudit
Insurance Companies
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Automated Audits and Controls
• Provides End to End Tracking of ALL E-Commerce Transactions
• Includes EDI, XML, Web, Flat File, Proprietary Formats, etc.
• Translator, Application, and Communications Mechanism Independent
• Scalability Across Multiple Servers
• Provides Hooks to Back-End Applications
• Client/Server-Based with Web Front End in Development
• Can Share Data Internally or with Key Trading Partners
• Can Trigger Specific Applications on Multiple Independent Servers
• Integrates Tracking of Transactions with Fine Granularity – Down to Document Level
• Monitors Entire Process for Exceptions
• Proactive Exception Notification via E-Mail, Pager, Phone, etc.
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Audits and Controls Architecture
Transaction Information
Claims
Payment
Dist
Whse
EDI
XMLWeb-Forms
Direct ConnectDial-up
Hospitals
Manufacturers
Citizens
Suppliers
Internal Applications
Fin
External Application
CommunicationsTranslations
Local Users
Remote Internet
ProprietaryFormats
Audit and Control Backbone
Ship
VAN’sInternet
Etc.
Providers
Six Checkpoints for Data Tracking: INBOUND
Business ApplicationBusiness
Application
Internal
File
IntermediateFile
EDI Translator
Data Communications
EDINetwork
End
Successful retrieval of all
data from network
EDI DataFile
Start 1Start
2
3End
4StartEnd
56 ApplicationInterfaceSystem
Ten Checkpoints for Data Tracking: OUTBOUND
Business ApplicationBusiness
Application
Internal
File
IntermediateFile
EDI Translator
Data Communications
EDINetwork
End
EDI DataFile
Start
5End
4
3Start
2EndStart
1 ApplicationInterfaceSystem
67Processed &
Posted
T.P. DataCommunications
Picked
Up
8T.P. EDI
Translator
9
T.P. Bus.Application
10
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Integrated Tracking and Reporting
• Performance Reporting Capabilities Determine Business Document Throughput Performance Throughout the Business Documents Life Cycle.
• Proactive Exception Only Error Notification Via Client Monitored Display, Email or Pager (Status Monitor). Multiple Notifications to Individuals or Groups.
• Preemptive Problem Notification Processes for Detection of Missing Application or EDI Data Files, Failed IP Connectivity and Absence of a Business Response for Data That Was Pushed to Customers’ Servers.
• Cradle to Grave Business Data Tracking Capabilities Ensure That No Data Is Lost at Any Point in the Business Documents Life Cycle
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Audits and Controls Requirements
• Manage File Transfers to Ensure Successful Completion• Manage Trading Partner and Application Timed Data Delivery• Monitor Transactions/Documents to Successful Application
Completion• File Storage and IRS Compliant Data Retention• Monitor System and Intra-Server Connection Availability• Custom Reporting and Data Control Files• Exception-Based Reporting• Build, Manage and Enhance Inter-Server Connection Programs • Proactive Notification via Pager and Email for Critical Issue
Resolution• Reconciliation of Application Data Between Agency and Trading
Partners • Monthly Data Archiving Capabilities With up to Three Months of
History Data Available for Query Searches
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Data Center Support
• Disaster Recovery
• Data Backup, Backout, and Recovery
• Fault Tolerance
• Backup Hardware
• Backup Communications
– Dial-up backup
• Support of RAID Disc Drives
• Data Center Availability
• 24 x 7 x 365
• System Monitoring
• Escalation Procedures
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Roles and Responsibilities
• EDI Resources
• EDI Coordinators
• EDI Mappers
• Communication Specialist (s)
• Infrastructure Specialist
• Business Resources
• EDI Liaison
• Business Analysis
• Application Specialists
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Roles and Responsibilities
• EDI Coordinator – Interface between the Agencies and Trading Partners and the EDI Team. Priorities projects and trading partner requests.
• EDI Mappers – Creates Implementation guides, design, develop, and test EDI maps. Monitors day-to-day processes.
• Communication Specialist – Supports all communications to both the trading partners and the agencies
• Infrastructure Specialist – Enhances Audits and Controls system, upgrades EDI software and supported applications
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Roles and Responsibilities
• EDI Liaison – Interfaces between the Agency and the EDI Team. Expertise in the Business Application
• Business Analysis – Understand the Business processes, prioritizing projects, and interfaces between the Users and the Application Specialists
• Application Specialists – Designs and modifies the application in support of the Agencies’ initiatives.
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Differences from Other Infrastructures
• Links Trading Partners’ Applications to Your Application
• This has never been accomplished before
• Needs to Meet IRS Requirements
• Communications Gateway – Internal and External
• Need for End-to-End Audits and Controls
• Integration to Multiple Applications
• Integration to Applications Never Before Linked
• Driven by Trading Partner Requirements Not Necessarily Agencies’ Requirements
• Expertise in EDI Standards, Versions and Supported Documents
• Continuously Upgrading to New Technologies
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Direct Benefits
• Easiest to Identify
• Quantification of Intuitive Benefits
• Process is not Modified, Simply Electronically Enabled
• Typical areas include:
• Costs of Paper and Processing
• Staff Reassignment
• Handling Discrepancies in the Process
• Document Storage Costs
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Strategic Benefits
• Benefits That Can Not Be Obtained Without Electronic Commerce but Don’t Always Flow Directly From It
• Provide Better Service to the Citizens of North Carolina Are Typically in This Area
• As Are Increased Efficiencies in the Processes
• More Importantly Are Benefits Derived From Process Redesign or Complete Process Elimination
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Payback Areas
• Hard Benefits
• Process Simplification (Cost Reduction)
• Elimination of Costly Errors (Cost Avoidance)
• Replace Paper Documents (Cost Avoidance)
• Better Cash Management (Cost Reduction)
• Reduce Number of Checks Written (Cost Reduction)
• Reduce Number of Rejected Claims (Cost Avoidance)
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Payback Areas
• Soft Benefits
• HIPAA Compliant
• Enhanced Relationship with Citizens
• Improve Efficiencies with the Processes
• Reputation of the State
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Return on Investment
• Additional Costs • Floor Space • Telephones • VAN Charges • FAX • Communications - Non-Direct • Communications - Direct Connects • Administrative Support • Office Supplies • Disaster Recovery Expenses
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Return of Investment (ROI)
• Training
• Staff Training
• Methodology Implementation
• Staff Computing Costs
• PC/Laptops/LAN/Email/Help Desk
• Pagers
• Cellular Phones
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Industry Metrics
• Costs of Processing a Paper Document
• Average $25 to $50 per Document
• Costs of Processing a Check
• Through a Lock Box - $3
• Through Electronic Funds Transfer - about 50 cents
• Average Keypunch Errors - 3-5% of Keystrokes
• 10% of those errors are “Material” in Nature
• Cost of a Customer Service Phone Call
• $125 per Call
• Cost of the Paper Purchase Order Process
• $100-150 per PO
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Common EDI Terms
• Element – EDI Data Field• Segment – EDI Record• Functional Acknowledgement – Acknowledged that EDI was received and
either passed or failed compliance checks • Value Added Network (VAN) – Provides a one to many communication
gateway to trading partners • Transaction – An EDI document• Delimiter – Separates EDI elements and segments• Control Number – EDI Header number generated by an EDI Translator used
to track the number of transmissions sent or received. • ASC X12 – Governing Body that sets the Standards for EDI• Interchange – Main Envelope Identifying the sender and receiver • Functional Group – Envelope Identifying the Type of Documents
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Next Steps
• Selected EDI Translation Software
• Document Business Processes within Each Office or Division of DHHS
• Document Information Flow
• Perform Gap Analysis
• Conduct Trading Partner Surveys
• Develop Implementation Guides
©Copyright Innovate E-Commerce Inc., - ITS 2001.
Questions and Answers