These frequently asked questions about the Health Insurance Portability and Accountability Act (HIPAA) were compiled from questions received from providers. The questions have been categorized to keep similar questions together and for ease of locating. The response to each question begins with a date, indicating the posting date of the answer.

Submit questions about the IHCP implementation of HIPAA via email to HIPAA Inquiries.


Will HIPAA make submissions to other state Medicaid agencies easier?

(3/2002) The purpose of the administrative simplification provision of HIPAA is to standardize Electronic Data Interchange (EDI) in the healthcare industry overall. There are currently more than 400 electronic claim formats within the healthcare industry. HIPAA standards will help create a more uniform mechanism for electronic communication. Healthcare plans, including Medicaid and Medicare, may require some situational data elements that other health plans do not. Policy and billing requirements will still be directed by each health plan. Be aware that changes to standardize and promote electronic data exchange may require health plans to also modify the information requirements for paper claims.

What is taxonomy?

(3/2002) The provider taxonomy is a code set that identifies a healthcare provider by type and specialty. A provider may have more than one taxonomy code, depending on the type of service rendered. The taxonomy code is not a unique physician identifier number (UPIN), Medicare provider number, or Medicaid provider number. The following is an example of the taxonomy code for a Federally Qualified Health Center (FQHC):

FQHC - 261QF0400N

- 26 - Ambulatory Health Care Facilities
- 1Q - Clinic/Center
- F0400 - Federally Qualified Health Center
- N - 'No' to national education requirement

The full provider taxonomy code set can be found at www.wpc-edi.com/taxonomy/Codes.html.

What is WEDI?

(3/2002) WEDI is the acronym for Workgroup for Electronic Data Interchange. WEDI works with the implementation of EDI in the healthcare industry.

If PA will be electronic in HIPAA, are you eliminating the paper process?

(3/2002) No. The current paper prior authorization (PA) process will be maintained for providers and situations when the electronic 278 transaction is not feasible. By adding the electronic capability, the IHCP will add an additional alternative to the PA process to comply with HIPAA requirements.


ICD-10 codes - When are they coming or will these be eliminated with HIPAA?

(12/2010) October 1, 2014, is the implementation date for International Classification of Diseases, Tenth Edition (ICD-10) codes. Additional information will be added to this FAQ when available.

Remittance Advice (Explanations of Payment)

How does the 835 affect the Explanation of Benefit codes? Are they standardized?

(3/2002) The 835 transaction, which replaces the current electronic Remittance Advice (RA), uses the standard Claim Adjustment Reason Code set and Remittance Remark Code set.

Managed Care

Do managed care entities (MCEs) have to comply with HIPAA, too?

(3/2002) If the MCE meets the requirements for a covered entity, then yes, the MCE must comply. According to the definition found in the Federal Register, Volume 65, No. 160, page 50318, the state Medicaid plan contracts with an MCE to provide services to Medicaid members. The MCE in turn contracts with healthcare providers to render these services. The MCE is then considered a health plan. All providers, health plans, and clearinghouses that transmit or store electronic data must comply.

How can MCEs be assured that pricing is available for new quarterly codes released?

(3/2002) Under HIPAA, procedure codes will be released quarterly through the Centers for Medicare & Medicaid Services (CMS). All code sets are available through IndianaAIM for provider and MCE use.

How will HIPAA change shadow claim processes for the MCEs?

(3/2002) All shadow claims, also known as encounters, are required to be submitted on the standard format. For example, the professional healthcare service encounters are submitted from the MCE to HP via the 837 professional encounter transaction. By using the 837 transactions for shadow (encounter) claim reporting, MCEs have the capability to report shadow claim adjustments electronically.

Claim Software Vendors and Clearinghouses

What is the process of working with a clearinghouse?

(3/2002) The healthcare clearinghouse must comply with the standards outlined in the August 17, 2000, rule. There are additional requirements specific for clearinghouses found in 45 CFR 162.923 (c) (1-2) and 45 CFR 162.930. Requirements found at 45 CFR 162.923 outline the requirements for covered entities. It is the provider's responsibility to verify the compliancy of the clearinghouse contracted, as the clearinghouse is acting as an agent for the provider.

How do we document what our clearinghouse does? Will there be a standard form or certificate the clearinghouse will have to complete, testifying that it is HIPAA compliant?

(10/2011) The covered entity, such as a provider, can use a healthcare clearinghouse to conduct the transactions as named in the final rule. Again, review the requirements found at 45 CFR 162.923, which outline the requirements for covered entities. It is the provider's responsibility to verify the compliancy of the clearinghouse contracted, as the clearinghouse is acting as an agent for the provider. The clearinghouse must have an active Trading Partner Agreement on file with the IHCP.

How will our vendors (computer) and clearinghouses be notified what changes are necessary?

(11/2002) Trading Partner information is now available on this website. This information includes IHCP-specific Companion Guides for each transaction. The national X12N transaction HIPAA implementation guides are available on the Washington Publishing Company website. Consult the NCPDP website for the National Council for Prescription Drug Programs (NCPDP) transaction standards used for retail pharmacy services.


Who is affected by the transition to HIPAA 5010?

(9/2010) HIPAA-covered entities affected by the transition to HIPAA 5010 include providers such as physicians, alternate site providers (rehabilitation clinics, and other inpatient and outpatient facilities), health plans, clearinghouses, and billing/service agents and vendors.

What are the improvements to HIPAA 5010?

(9/2010) Providers can now distinguish between codes designating principal diagnosis, admitting diagnosis, external cause of injury, and patient's reason for visit.

What is the National Council for Prescription Drug Programs (NCPDP) version D.0?

(08/2012) NCPDP version D.0 is the new version of the NCPDP standards for pharmacy and supplier transactions. D.0 went into production July 1, 2012.

What happens if you do not upgrade to HIPAA 5010?

(08/2012) Electronic transactions received in version 4010 format after the July 1, 2012 deadline are rejected.

What is the deadline for upgrading to HIPAA 5010?

(08/2012) The deadline for upgrading to HIPAA 5010 was July 1, 2012.

May one covered entity require another covered entity to use the new HIPAA 5010, NCPDP D.0, and Version 3.0 of the HIPAA standard transactions before the mandatory compliance date of January 1, 2012 (or January 1, 2013, for small health plans using Version 3.0)?

(9/2010) No covered entity may require another covered entity to send or receive the new versions of HIPAA 5010, NCPDP D.0, or Version 3.0 until January 1, 2012 (or January 1, 2013, for small health plans using Version 3.0).

I am a provider. What must I do to submit claims under HIPAA 5010?

(8/2012) All trading partners submitting directly to the IHCP are required to use software that has been tested and approved for version 5010. Clearinghouses and software vendors must test with the IHCP. Providers must contact their software vendor or clearinghouse to ensure that these entities have been approved for HIPAA 5010. Additionally, all trading partners are required to submit a Trading Partner Agreement.

I submit my claims via a clearinghouse/vendor. When will I see those claims on Web interChange?

(9/2010) Any claims received electronically by HP Monday - Friday between 8 a.m. and 5 p.m. are viewable after approximately two hours via Web interChange. Any claims submitted after those hours or during the weekend are viewable after 8 a.m. the next business day.

Note: As a result of National Correct Coding Initiative (NCCI) editing, there may be rare events when claims will not be available for viewing within the usual two-hour time frame. If the delay is longer than 24 hours, providers may contact HP Customer Assistance to determine the reason for delay.

What transactions are specified in the HIPAA standard?

(10/2011) The following provider-related transactions are specified in the standards: 270/271: Eligibility benefit inquiry and response; 276/277: Claim status request and response; 278: Request for referral and authorization and response; 835: Claim Remittance Advice; 837: Claim submission (professional, institutional, and dental).