What are HIPAA EDI Transactions?
HIPAA EDI transactions are Electronic Data Interchange transactions between healthcare providers and health plans that comply with the standards adopted by the Secretary for Health and Human Services in Part 162 of the HIPAA Administrative Simplification Regulations. The failure to comply with the standards for HIPAA EDI transactions can have significant consequences.
When Congress passed HIPAA in 1996, one of the objectives of Title II of the Act was to simplify the administration of transactions conducted electronically between healthcare providers and health plans. At the time, because of the uncoordinated way in which the industry had adopted EDI in healthcare, more than 400 proprietary EDI formats were being used to transmit data between providers and payers.
The number of proprietary EDI formats limited the ability of providers and payers to achieve the cost and efficiency benefits of electronic transactions. It also made it more difficult to develop software that converted one set of EDI formats into another. Consequently, Congress instructed the Secretary for Health and Human Services (HHS) to standardize EDI transactions and the data elements used in them.
The Standards for HIPAA EDI Transactions
The original standards for HIPAA EDI transactions were published in 2000. They covered eight transaction types and the code sets to be used in each transaction type. The standards were modified in 2003 and in 2009 to address technical issues and update the code sets. A further transaction type – Medicaid Pharmacy Subrogation – was also added in 2009, bring the total number of transaction types to nine:
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- Health Care Claims or Equivalent Encounter Information.
- Eligibility for a Health Plan.
- Referral Certification and Authorization.
- Health Care Claim Status.
- Enrollment and Disenrollment in a Health Plan.
- Health Care Electronic Funds Transfers (EFT) and Remittance Advice.
- Health Plan Premium Payments.
- Coordination of Benefits.
- Medicaid Pharmacy Subrogation.
Operating rules were introduced in 2011 to meet the requirements of the Affordable Care Act and resolve the issue of different health plans applying different transaction implementation rules. Subsequent technical amendments to the standards for HIPAA EDI transactions and the code sets to be used in each transaction type were made in 2012, while the requirement to adopt Unique Health Plan Identifiers and Other Entity Identifiers was rescinded in 2019.
The current standards for HIPAA EDI transactions can be found at 45 CFR Part 162.
The Consequences of Non-Compliance
The failure to comply with the standards for HIPAA EDI transactions most often results in delayed treatment authorizations and delayed payments. Individuals and entities affected by non-compliance with the standards for HIPAA EDI transactions can complain to HHS’ Centers for Medicare and Medicaid Services (CMS) who has the authority to investigate complaints and issue sanctions when appropriate.
CMS receives about 40 complaints per quarter and the most common sanctions issued are corrective action plans. However, CMS has the authority to issue civil monetary penalties for HIPAA violations if a healthcare provider or health plan regularly violates Part 162 standards. The agency also has the authority to exclude healthcare providers from Medicare and Medicaid under the Administrative Simplification Compliance Act.
It is important to be aware that, in addition to healthcare providers and health plans, the standards for HIPAA EDI transactions apply to health care clearinghouse, third party administrators, and business associates providing coding and billing services for covered entities. Because of the consequences of non-compliance with the standards, organizations unsure about what compliance consists of are advised to speak with a HIPAA compliance professional.
