FAQs - HIPAA
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
Will HIPAA make submissions to other state Medicaid agencies
(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
- 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
(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
(12/2010) October 1, 2013, is the implementation date for
International Classification of Diseases, Tenth Edition (ICD-10)
codes. Additional information will be added to this FAQ when
Remittance Advice (Explanations of
How does the 835 affect the Explanation of Benefit codes? Are
(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.
Do managed care organizations (MCOs) have to comply with HIPAA,
(3/2002) If the MCO meets the requirements for a covered entity,
then yes, the MCO must comply. According to the definition found in
the Federal Register, Volume 65, No. 160, page 50318, the state
Medicaid plan contracts with an MCO to provide services to Medicaid
members. The MCO in turn contracts with healthcare providers to
render these services. The MCO is then considered a health plan.
All providers, health plans, and clearinghouses that transmit or
store electronic data must comply.
How can MCOs 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 MCO
How will HIPAA change shadow claim processes for the MCOs?
(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
MCO to HP via the 837 professional encounter transaction. By using
the 837 transactions for shadow (encounter) claim reporting, MCOs
have the capability to report shadow claim adjustments
Claim Software Vendors and
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?
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.
HIPAA 5010 AND nCPDP D.O
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,
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
(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
(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
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).