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Transaction and Code Set Standards

Transactions are electronic exchanges involving the transfer of information between two parties for specific purposes. For example, a physician will send a claim to a health plan to request payment for medical services. HIPAA adopted certain standard transactions for electronic data interchange (EDI) of administrative health care data. Under the Health Insurance Portability and Accountability Act (HIPAA), if a covered entity conducts one of the adopted transactions electronically, they must use the adopted standard. Covered entities must adhere to the content and format requirements of each transaction. Under HIPAA, the Department of Health and Human Services (HHS) also adopted specific code sets for diagnoses and procedures to be used in all transactions, including the Current Procedural Terminology (CPT®) (outpatient services/procedures), the Health Care Procedure Coding System (HCPCS) (ancillary services/procedures), International Classification of Diseases, Ninth Revision (ICD-9) (diagnosis and hospital inpatient procedures), and ICD-10 (as of October 1, 2015).

Version 5010 electronic transactions
"5010" is the current adopted version of the HIPAA standard transactions.

ICD-10 code set
ICD-10 codes will replace ICD-9 diagnosis codes for use in outpatient and inpatient settings and will replace ICD-9 procedure codes for inpatient settings beginning October 1, 2015. CPT codes will remain the codes used by physicians for reporting procedures in outpatient settings.

New standards
The Affordable Care Act (ACA) mandates the adoption of an electronic standard for conducting electronic funds transfer (EFT) and the adoption of the claims attachment standard that was already named in HIPAA.

  • EFT: Physicians who want to receive reimbursement from their payers via EFT can now require them to do, as of January 1, 2014. Physicians are not required under HIPAA to receive their reimbursement via EFT, however, some payers such as Medicare, may as a condition of doing business, require physicians to be paid in this manner.
    • Learn more on how to implement EFT in your practice.

    It should also be noted that that AMA has received a number of complaints associated with abusive virtual credit card reimbursement practices by payers, which result in hefty fees for physicians. As a result of the new EFT HIPAA standard, physicians who want to avoid being reimbursed through the use of these credit cards will now have a recourse and may request their payers reimburse them via the new ACH EFT standard. If payers refuse to comply they will be out of compliance with HIPAA and should be reported to the Centers for Medicare and Medicaid Services (CMS). The AMA opposes payer’s use of credit card which result in hefty fees for physicians, as explained in "The effect of health plan virtual credit card payments on physician practices."

  • Attachments: HHS has not yet named a standard for attachments.

Operating rules for transactions
ACA mandates the adoption of operating rules for each named HIPAA standard transaction.


The Transactions and Code Sets Final Rule, as required by HIPAA, was issued in 2000 by HHS and named standard transactions to be used by "covered entities," defined as health care providers (including physicians), payers, and clearinghouses, when conducting specific administrative transactions electronically. Physicians are not required by HIPAA to do any of the below listed transactions electronically. Rather, HIPAA requires any physician who chooses to do these transactions electronically to comply with the HIPAA standards.

Listed below are the administrative transactions that were named in the Transactions and Code Sets Final Rule. In the industry these transactions are commonly referred to by a certain number, which is included next to each one in parenthesis:

  1. Health claims or equivalent encounter information (837)
  2. Eligibility for a health plan (270/271)
  3. Health care payment and remittance advice (835)
  4. Health claim status (276/277)
  5. Referral certification and authorization (278)
  6. Enrollment and disenrollment in a health plan (834)
  7. Health plan premium payments (820)


The version of the transactions named in HIPAA was Version 004010 (4010) and its subsequent addenda, 004010A1 (4010A1); collectively referred to as "4010A1." These electronic transactions were developed by the standards development organization Accredited Standards Committee X12 (ASC X12). Standards development organizations are bodies that develop standards used in various industries, such as banking standards that enable you to use your ATM card in any ATM.

The Transactions and Code Sets Final Rule included standards for pharmacy transactions, which are not addressed here.

On January 16, 2009, HHS announced that an updated version of the HIPAA standards will be required for use starting on January 1, 2012. The updated version of these standards are referred to as 5010. Also announced by HHS was the requirement to move from use of ICD-9 to ICD-10.

In 2010, ACA was enacted and has added requirements to HIPAA for the adoption of two new standards for electronic funds transfer (EFT) and claims attachments.

Submission of electronic Medicare claims

Although HIPAA does not require physicians to use electronic transactions, a related law, the Administrative Simplification Compliance Act (ASCA), does impose such a requirement for physicians who bill Medicare. ASCA requires that all claims submitted to the Medicare program must be submitted in electronic form, with some limited exceptions. The implication of this requirement is that because the claims are submitted electronically, they are also required to comply with HIPAA. The compliance date for the requirement to submit Medicare claims electronically was October 16, 2003. Physicians who are considered "small providers," defined as those having fewer than 10 full-time equivalent employees in their practice, may continue sending paper claims. The law provides for a few other limited exceptions. More information on these can be found on the CMS website.

AMA Resources