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HIPAA is the short name for the Health Insurance Portability and Accountability Act. President Clinton signed HIPAA (also known as the Kennedy-Kassebaum bill) into law in August 1996. The intent of the legislation was to improve the portability and continuity of health benefits, to ensure greater accountability in the area of health care fraud, and to simplify the administration of health insurance. In Title II of the Act, a subsection entitled Administrative Simplification has resulted in new regulations mandating compliance with a wide range of health information management, security and privacy standards.

Administrative Simplification

The Administrative Simplification section was included in HIPAA with the intent to standardize specific electronic transactions and identifiers used in healthcare business processes such as billing, claims, and other interactions between providers, clearinghouses, and health plans.

The four parts of the Administrative Simplification are:


Electronic Transactions

If EDI is used in conducting healthcare business, the following nine transactions require the use of HIPAA standards for encoding the data elements defined by the transactions. If healthcare organizations are not conducting business via electronic transactions, use of these standards is not required.

  • Health claims or equivalent encounter information
  • Health claims attachments
  • Enrollment and disenrollment
  • Eligibility for a health plan
  • Payment and remittance advice
  • Health plan premium payments
  • First report of injury
  • Health claims status
  • Referral certification and authentication

Transaction Sets

The HIPAA Standard Transactions are defined and numbered as follows:

  • Health care claims or coordination of benefits
  • Retail drug NCPCP v.32
  • Dental claim ASC X12N 837: dental
  • Professional claim ASC X12N 837: professional
  • Institutional claim ASC X12N 837: institutional
  • Payment & remittance advice ASC X12N 835
  • Health claim status ASC X12N 276/277
  • Plan enrollment ASC X12 834
  • Plan eligibility ASC X12 270/271
  • Plan premium payments ASC X12 820
  • Referral certification ASC X12 N 278

The following Electronic Transactions are pending further development and publication of their NPRM and Final Rule:

  • First report of injury ASC X12
  • Health claims attachments ASC X12 275 & HL7 TBD
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