Electronic Data Interchange (EDI) is a secure way of transmitting data between healthcare institutions, insurers, and patients using established message formats and standards. EDI allows entities within the healthcare system to exchange medical, billing, and other information and to process transactions in a fast and cost-effective manner. It is a business-to-business, computer-to-computer exchange of transaction information. EDI in healthcare helps medical organizations secure data exchanges, provides a quicker turnaround of information, and eliminates claim processing delays. Some of the benefits of healthcare EDI include increased productivity, minimized denials and rework requests, and reduced administrative burden. EDI transactions have to be compliant with regulatory requirements such as HIPAA and follow ANSI standards. EDI is a key business tool in today’s highly competitive medical environment, and there are many benefits to be derived from it.