Diamond Medical Services and its affiliates have been diligently following the evolution of the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA) since its inception in 1996. Our goal is to ensure our systems, supporting business processes, policies, and procedures can successfully meet the implementation standards and deadlines mandated by the United States Department of Health and Human Services (DHHS).

To achieve this goal, we have or are in the process of accomplishing the following:

What is HIPAA?

The Health Insurance Portability and Accountability Act (HIPAA) was signed into Federal Law on August 21, 1996 to improve the efficiency of health care delivery. HIPAA mandates standards for Electronic Data Interchange (EDI) transactions and code sets. It establishes uniform health care identifiers for providers, health plans, and employers. Compliance with HIPAA requires the use of ANSI ASC X12N (Version 4010) transaction standards and implementation guides. It also addresses privacy and security.

The final rules for transactions and code sets were published in the Federal Register on August 17, 2000. The effective date of this rule is October 16, 2000, and covered entities will have 24 months after that date to comply with the regulation or be subject to financial penalties which will be defined under the pending Enforcement Regulation.

The final rule for Privacy Standards was published in the Federal Register on December 28, 2000. The compliance date is April 14, 2003.

HIPAA Applicability

Under the terms of HIPAA, the rules and regulations apply to health plans, health care clearinghouses, and health care providers who transmit any health information in any electronic form in connection with transactions covered under HIPAA, and who receive, maintain, or disclose individually identifiable health information in any form or medium. All covered entities must comply with the standards adopted by HIPAA by the applicable compliance dates. If a provider chooses to conduct a standard electronic transaction with a health plan, the health plan may not refuse to conduct, or delay such transactions. The modes of electronic transmission covered under HIPAA include the Internet, extranets, leased lines, dial-up lines, private networks, and those transmissions that are physically moved from one location to another using magnetic tape, disk, or compact disk media.

HIPAA Privacy and Security

HIPAA Transaction Standards

The transactions that are required to use the HIPAA standards under this regulation are:

Transaction Name ASC X12 Transaction NCPDP Transaction
Health Claims and Equivalent Encounter Information 837 NCPDP 5.1/Batch 1.0
Enrollment and Disenrollment in a Health Plan 834  
Eligibility Inquiry/Response for a Health Plan 270/271 NCPDP 5.1/Batch 1.0
Health Care Payment/Remittance Advice (EFT/ERA) 835 NCPDP 5.1/Batch 1.0
Health Plan Premium Payments 820  
Health Claim Status 276/277  
Referral Certification and Authorization 278  
Coordination of Benefits 837 NCPDP 5.1/Batch 1.0
Electronic Attachments 275/HL7LOINC  

HIPAA Code Sets

Under HIPAA, a “code set” is any set of codes used for encoding data elements, such as tables of terms, medical concepts, medical diagnosis codes, or medical procedure codes. Code sets for medical data are required for data elements in the administrative and financial health care transaction standards adopted under HIPAA for diagnoses, procedures, and drugs. The following code sets have been adopted as the standard medical data code sets:

HIPAA Identifiers (Final Rules Pending)

Following are the proposed HIPAA identifiers:

  • National Provider Identifier (NPI) *: proposed to be a ten-position numeric identifier
  • Employer Identification Number (EIN): proposed to be the nine-digit IRS Tax Identification Number
  • Health Plan Identifier (PAYERID): not yet announced but likely to be a nine-digit number assigned to all health plans for the routing of electronic transactions.
  • Diamond Medical Services Industry Involvement

    Diamond Medical Services has been involved in HIPAA since 1997 and has an early start on transaction development. Diamond Medical Services has also worked extensively with the following organizations:

    How to Prepare for HIPAA

    There is a wealth of information being published to keep the health care community informed of what is happening on the HIPAA front. The following government and health care organization Web sites are available for assistance with HIPAA implementation: