HIPAA Transaction Code Sets

Acronym: EDI

The HIPAA Transaction Code Sets are a major component of each standard transaction. In many cases, the code sets are familiar to most physician practices (for example, CPT codes or ICD-9-CM codes). Code sets may also be ones that you do not actively choose during a patient encounter but are instead behind the scenes. Two examples of such code sets are Place of Service codes and relationship codes (the relationship of the patient to the insurance guarantor). There are also many new codes that have been developed for the X12 transactions. For example, the X12 835 remittance now has standardized claims adjustment reason and remark codes. Using standardized codes for X12 835 remittance advice may provide a practice management system with the logic it needs to automatically and correctly post a payment. When the code set is part of a transaction you submit, such as the electronic claim, eligibility request or claim status, it is important that you understand how the codes within the code set are used, and you should also have a way of entering these codes into your practice management software. When a code is contained in a transaction you receive, such as the electronic remittance advice, being familiar with the meaning of the code is helpful. But not every health insurer uses the code sets the same way. Some health insurers will use a very specific adjustment reason code and related remark code for each line item they adjudicate, while other health insurers may use more generalized codes. This inconsistency makes your efforts to process an electronic remittance advice and determine the accuracy of the payment more difficult.