HIPAA > Trans
Transactions & Code Sets Standards

Health care providers and health plans exchange electronic data using more than 400 different formats when performing daily transactions. This is administratively cumbersome on the U.S. health care system. HIPAA states that all covered entities must comply with standard electronic transaction formats in order to improve the efficiency and effectiveness of the health care system. The implementation of standard electronic data interchange (EDI) formats and data elements for transactions will reduce the burden on health care providers and billing services and ultimately reduce administrative costs to the health care industry. Additional information on the background of these standards can be found at the DHHS website.

HIPAA designates "standard" transaction formats and data content for:

  • Eligibility/Benefit Inquiry & Response
  • Health Care Claims Status Request & Response
  • Health Care Claims - Professional, Institutional, Dental
  • Coordination of Benefits
  • Referral Certification & Authorization
  • Payment & Remittance Advice
  • Enrollment and Disenrollment in a Health Plan
  • Payroll Deduction for Premium Payments
  • Retail Pharmacy Claims, Coordination of Benefits, Payment & Remittance Advice, Eligibility Inquiry

Under HIPAA, a "code set" is any set of codes used for encoding data elements, such as tables of terms, medical concepts, medical diagnosis codes, or medical procedure codes. Medical data code sets used in the health care industry include coding systems for diseases, impairments, other health related problems, and their manifestations; causes of injury, disease, impairment, or other health-related problems; actions taken to prevent, diagnose, treat, or manage diseases, injuries, and impairments; and any substances, equipment, supplies, or other items used to perform these actions. Code sets for medical data are required for data elements in the administrative and financial health care transaction standards adopted under HIPAA for diagnoses, procedures, and drugs.

HIPAA defined the standard code sets that will be used to classify member information. The following code sets must be used by the compliance date:

  • Diagnoses and Procedures (ICD-9-CM)
  • Physician Procedures (CPT-4)
  • Ancillary Services/Procedures (HCPCS Level 1 & 2)
  • Dental Terminology (CDT)
  • National Drug Codes (NDC)
  • And many more supporting code sets as required by the Implementation Guide for each standard transaction


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