What are HIPAA transactions and code set standards?

The HIPAA transactions and code set standards are rules to standardize the electronic exchange of patient-identifiable, health-related information. They are based on electronic data interchange (EDI) standards, which allow the electronic exchange of information from computer to computer without human involvement.

A “transaction” is an electronic business document. Each of the HIPAA standard transactions has a name, a number, and a business or administrative use. Those of importance in a medical practice are listed below:

Claim/encounter (X12 837)

For submitting claim to health plan, insurer, or other payer

Eligibility inquiry and response (X12 270 and 271)

For inquiring of a health plan the status of a patient’s eligibility for benefits and details regarding the types of services covered, and for receiving information in response from the health plan or payer.

Claim status inquiry and response (X12 276 and 277)

For inquiring about and monitoring outstanding claims (where is the claim?  Why haven’t you paid us?) and for receiving information in response from the health plan or payer.  Claims status codes are now standardized for all payers.

Referrals and prior authorizations (X12 278)

For obtaining referrals and authorizations accurately and quickly, and for receiving prior authorization responses from the payer or utilization management organization (UMO) used by a payer.

Health care payment and remittance advice (X12 835)

For replacing paper EOB/EOPs and explaining all adjustment data from payers.  Also, permits auto-posting of payments to accounts receivable system.

Health claims attachments (proposed) (X12 275)

For sending detailed clinical information in support of claims, in response to payment denials, and other similar uses.

The purpose of the HIPAA standards is to simplify the processes and decrease the costs associated with the payment for health care services. The savings to payers, physicians and other providers could be enormous, but only if there is collaboration between all parties involved.