HIPAA EDI Legislative Background In The Healthcare Business
EDI is the process of using nationally established standards to exchange electronic information between business entities. These national standards are developed and maintained by a group of standards development organizations (SDOs), such as the Accredited Standards Committee (ASC) X12 and the National Council of Prescription Drug Programs (NCPDP).
The Department of Health and Human Services (HHS) adopted certain electronic standards for use in health care under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Medicare FFS is required, as are all payers in the US, to adopt the standards specified under HIPAA. However, as part of Medicare FFS’ EDI Acknowledgement Model, three additional ASC X12 standards will be adopted for error handling (277CA claim acknowledgment, 999 implementation acknowledgment, and TA1 interchange acknowledgment) that are not mandated under HIPAA. In addition, there will be one additional standard adopted for NCPDP error handling (transmission response) that is not mandated under HIPAA.
EDI practices for healthcare business were embraced more than 20 years ago to standardize electronic formats throughout the healthcare industry. Usage of EDI in Health care claim processing was initiated by the Health Insurance Portability and Accountability Act of 1996(HIPAA), Public Law 104,191. Subtitle F of Title II of HIPAA, added to Title XI of the Social Security Act (the Act) a new part called section C, entitled “Administrative Simplification” and consists of sections 1171 through 1180. This Federal legislation adopted standards for electronic transactions under an Administrative Simplification subtitle. HIPAA mandated the adoption of standards for electronically transmitting certain health care administrative transactions between all covered entities.
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