IAIABC: EDI for Workers’ Comp Seen Gaining Ground

August 24, 2004

The International Association of Industrial Accident Boards and Commissions concluded its Annual Convention in New York City, earlier this month, with reported excellent progress on the three mechanisms for sending and receiving electronic data on proof of coverage, claims reports, and medical reports.

Twenty-six state workers’ compensation agencies now receive some form of electronic claims, policy, or medical reporting from insurers or those administering claims, most of which use one of several standards developed and supported by the IAIABC.

“EDI senders and receivers, working closely together in a consensus-development process, have refined the standards so that they are both useful to the receiving agency and cost-efficient for the sender,” said Linda Yon of Florida, co-chair of the IAIABC EDI Claims Development Committee. There are three IAIABC claims reporting standards – Releases 1, 2, and 3 – and the IAIABC’s vision is for the Release 3 standard to become widely and consistently used for receiving claims information electronically. Ultimately, states using earlier versions should migrate to the new standard, advancing the goal of efficiency and cost reduction through the use of EDI.

What’s holding back the full embrace of EDI reportedly is inconsistent implementation. Long standing supporters of the EDI process are waiting for the payoff from their years of patient work in developing claims standards.

“We are on the verge of being able to deliver the payoff, said Jim Eldridge, director of Workers’ Compensation Products for the Insurance Services Office. Eldridge has a 15-year history with the development of EDI standards for workers’ comp. He contends that the EDI program will sell itself now that there is a clear and robust EDI standard available for all states to adopt.

“The enthusiasm of the states, now that they recognize what Release 3 can do for their systems, is catching, and more and more states expect to implement or migrate to the Release 3 standard soon. West Virginia will be in full production by the end of the year,” added Faith Howe, EDI manager for the IAIABC.

“The dream that advocates of EDI share is a dramatically improved standard for the electronic transmission of claims information from payers of benefits to state regulators. In my estimation, we have never been closer to realizing that dream, said Glenn Morton, president-elect of the IAIABC. Morton has been a supporter of the IAIABC EDI project for the past several years and has helped move the IAIABC standards from their primitive state to the more sophisticated and widely accepted level they reportedly enjoy today.

The purpose of these reports is to ensure that claims are being paid timely and accurately, as well as information for jurisdictions to measure and improve their workers’ comp systems. Electronic communication is a lynchpin in the improvement of regulation, noted Morton.

Background on the development of Release 3 can be viewed on the IAIABC Web site at: http://www.iaiabc.org.

The International Association of Industrial Accident Boards and Commissions EDI project began in the early 1990s, and has been a collaborative effort of regulators, insurers, and vendors of information technology services. The shared vision of all these groups is to improve the administration of workers’ comp regulation and keep administrative costs down for all parties.

There are several major committees that have developed standards for proof of coverage, initial claims reports, subsequent reports, and medical reports – all in a consistent and efficient electronic protocol. The standard setting process is similar to that used by ACORD and ANSI in setting industry standard by collaboration and consensus among interested parties.

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