The HIPAA transactions and code set standards are rules that standardize the electronic exchange of health-related administrative information, such as claims forms. The rules are based on electronic data interchange (EDI) standards, which allow for the exchange of information from computer-to-computer without human involvement.
A "transaction" is an electronic business document. Under HIPAA, a handful of standardized transactions will replace hundreds of proprietary, non-standard transactions currently in use. For example, the HCFA 1500 claims form/file will be replaced by the X12 837 claim/encounter transaction. 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 in the table below.
| Transaction | Number | Business use |
| 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. |
How EDI Works
Doctor diagnosis the patient and provide the treatment for the identified disease. Billing Team prepare the bill(claim) and the claim is transmitted into an EDI Document format called as 837 Health care claim. Then the EDI 837 Document securely transmitted to the insurance company via clearing house.
Then the Insurance company processes the claim which comes in the electronic format and provide the necessary reimbursement for the provider for the treatment given to the patient.
Why You Need EDI – the Benefits
- Lower costs
- Higher efficiency
- Improved accuracy
- Enhanced security
- Greater management information
Interest to see some sample EDI Documents. Please check here.
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