Transaction & Code Sets Standards

Transactions are electronic exchanges involving the transfer of information between two parties for specific purposes.  For example, a health care provider will send a claim to a health plan to request payment for medical services.  The Health Insurance Portability & Accountability Act of 1996 (HIPAA) named certain types of organizations as covered entities, including health plans, health care clearinghouses, and certain health care providers.  In the HIPAA regulations, the Secretary of Health and Human Services (HHS) adopted certain standard transactions for Electronic Data Interchange (EDI) of health care data. These transactions are:  claims and encounter information, payment and remittance advice, claims status, eligibility, enrollment and disenrollment, referrals and authorizations, coordination of benefits and premium payment.  Under HIPAA, if a covered entity conducts one of the adopted transactions electronically, they must use the adopted standard– either from ASC X12N or NCPDP (for certain pharmacy transactions)  Covered entities must adhere to the content and format requirements of each transaction.  Under HIPAA, HHS also adopted specific code sets for diagnoses and procedures to be used in all transactions.  The HCPCS (Ancillary Services/Procedures), CPT-4 (Physicians Procedures), CDT (Dental Terminology), ICD-9 (Diagnosis and hospital inpatient Procedures), ICD-10 (As of October 1, 2013) and NDC (National Drug Codes) codes with which providers and health plan are familiar, are the adopted code sets for procedures, diagnoses, and drugs.  Finally, HHS adopted standards for unique identifiers for Employers and Providers, which must also be used in all transactions.  Information about the identifiers can be found in the "Related Links Inside CMS" section below.