Workers Compensation
Electronic Data Interchange (EDI) Project

What is EDI and how did it come to be used in workers compensation?

EDI as used in many industries is the computer to computer exchange of standard business data between two or more organizations. In workers compensation EDI is the transmission of claims and/or coverage information from insurers to a state agency.

Problems associated with data collection in workers compensation include:

• A lack of credible information to identify and measure the specific factors driving costs
• A lack of uniformity among forms and terms
• An administrative process that is becoming engulfed in paper (imagine a stack of paper twice as tall as the Washington Monument; that's what one state faced in 1993, just to deal with claims documents from insurance companies!)

There are many quantifiable benefits to exchanging data via EDI. These include:

• Elimination of delays caused by re-keying of data
• Elimination of errors caused by re-keying data
• Elimination of time spent in non-productive human-to-human error resolution (telephone tag)
• Elimination of paper handling, filing, storage and mailing costs.

There are many strategic benefits as well to exchanging data via EDI. These include:

• Improving the quality and speed of operations
• Reducing operating costs
• Improving trading partner relations by assisting in reduction of their costs & improved operations
• Improving forecasting and planning through timeliness of reporting information
• Refocusing employee resources on more productive business activities.

The first industries to use EDI, beginning in the early 1970s, were transportation, automotive, chemical, and electronics. Roughly 90% of Fortune 1000 companies are now using EDI.

The International Association of Industrial Accident Boards and Commissions (IAIABC) began standardization of states' workers comp forms during the 1950s. The IAIABC began researching electronic transmission during the 1980s and developed EDI reporting standards in the 1990s.

Contact us at:

Kansas Department of Labor
Workers Compensation
800 SW Jackson, Suite 600
Topeka, KS 66612-1227
(785) 296-4120.