Click and Complain
Physicians will need to ensure that their electronic transactions are standardized consistent with federal law. The AMA has provided the following in an effort to help physicians understand and comply with the Final Rule on Transaction and Code Sets under the Health Insurance Accountability and Portability Act (HIPAA). This tool will help physicians understand how to comply with the parts of the Final Rule on Transaction and Medical Code Sets as necessary.
What is The Final Rule on Transactions and Code Sets?
This rule adopts standards for eight electronic transactions and for code sets to be used in those transactions. Download a free copy of the Final Rule.
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Do physicians have to conduct transactions electronically?
Health care providers are not required to transmit transactions electronically. The regulation applies only to transactions sent electronically. Health care providers remain free to use paper media.
Are there advantages of transmitting transactions electronically?
Physicians who conduct transactions electronically, whenever possible and appropriate, may achieve greater efficiencies and cost savings. It is estimated that processing claims electronically can result in considerable cost savings. In addition, prompt payment surveys of physicians have consistently shown that electronic claims are processed and paid considerably faster, sometimes twice as fast.
Which of the eight transactions are most relevant to practicing physicians?
Physicians and their practices can concentrate on the Accredited Standards Committee (ASC) X12N standards that pertain to information being sent from their offices and being received by their offices. The most likely type of administrative and financial transactions performed by physician offices involve claims and claims payment/advice and eligibility inquiry and response.
- The eight transactions include the following: 270/271, 277/275, 276/277, 278, 820, 834, 835 and 837.
- 837, 835 and 270/271 are of particular interest to physicians:
- 837 is the most common transaction as it is the standard for professional claims
- Download all the implementation guides for all ASC X12N standards for free from the Washington Publishing Company
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Who conducts your transactions?
If your office conducts its own electronic transactions, you need to review the implementation guides for each of the transactions above. If you use a clearinghouse, or other entity for electronic transactions, you need to make sure they are compliant with these standards. These other entities should standardize the transactions for you.
What Code Sets are included in the Final Rule?
The implementation specifications for the transaction standards specify which code sets should be used and in what circumstances.
- The code sets that are specified as national standards are included on page 50370
of the Final Rule under section 162.1002
This link will take you off the AMA Web site. - The AMA's Current Procedural Terminology (CPT) was designated as the national standard code set for physician and other health care professional services. CPT modifiers were also named as part of the code set, thus requiring all who transmit and receive electronic data to be able to transmit modifiers in addition to CPT codes.
- As part of the effort to adopt national standards, the rule states that health plans and providers may not use local codes in standard transactions after the implementation dates.
Where can I find definitions of the terms being used in the Final Rule?
Knowing the definition of several terms will help you understand the applicability of the transaction standards (types of transaction covered, types of organizations covered and the relationships between organizations that are covered and those that are not). A list of definitions is on pages 50365-50367 of the Final Rule.
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Physicians may want to pay special attention to the following:
- Covered entity
- Business associate
- Health care clearinghouse
- Trading partner agreement
Where can I find examples?
The Final Rule uses several examples to assist in determining when a transaction must be conducted as a standard transaction. These examples are on pages 50317 and 50318 of the Final Rule.
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What are the penalties for non-compliance?
The law allows for monetary penalties for failure to comply with a standard. Fines are not to exceed $100 per violation per person or entity. The total amount imposed on any one person, for violation of any one requirement, may not exceed $25,000 in each calendar year.
The Washington Publishing Company (Free downloads of the Implementation Guides . Click on "HIPAA")
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