CPB (Certified Professional Biller) Certification Practice Exam

What does EDI stand for in the realm of medical billing?

1. Electronic funds transfer

2. Electronic data interchange

3. Disproportionate share hospital (adjustment)

4. Durable Medical Equipment

The correct answer is: Electronic data interchange

The correct answer is Electronic Data Interchange. In the context of medical billing, EDI refers to the electronic exchange of healthcare-related data between providers, payers, and other entities. This process streamlines the billing cycle, improves accuracy, and enables faster processing of claims and payments, thereby enhancing the efficiency of the healthcare system as a whole. Electronic Data Interchange is crucial for the transmission of billing information, such as claims submissions, remittance advice, and eligibility verification, thus significantly reducing the reliance on paper communication and minimizing errors associated with manual entry. The other options—such as Electronic Funds Transfer, which pertains specifically to the electronic transfer of money; Disproportionate Share Hospital, which refers to specific adjustments in reimbursement; and Durable Medical Equipment, which deals with medical supplies—are relevant concepts within the healthcare industry but do not specifically define the overarching concept of EDI in medical billing.