Da Vinci Prior Authorization Support (PAS) FHIR IG
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HIPAA Regulations

Page standards status: Informative

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The Health Insurance Portability and Accountability Act (HIPAA) of 1996 contains the following three major provisions:

  • Portability
  • Medicaid Integrity Program/Fraud and Abuse
  • Administrative Simplification

This page summarizes the administrative simplification provision that implemented standard transaction and code sets, identifiers, security, and privacy rules across the healthcare industry. This page is informative and implementers should always consult the full regulations if they have questions/concerns.

Administrative Simplification Requirements of HIPAA

The major requirements of administrative simplification affect:

  • Transactions and code sets - establishes standards for electronic transactions and external medical data code sets
  • Identifiers - establishes a standard for a unique employer identifier and a standard for National Provider Identifiers (NPIs)
  • Security - specifies the administrative, technical, and physical requirements for covered entities to use in safeguarding protected health information
  • Privacy - establishes a set of national standards for the protection of certain health information; addresses standards for the use and disclosure of individuals’ health information (called “protected health information”); outlines standards for individuals’ privacy rights, as well as individuals’ rights to understand and control how their health information is used

The complete suite of HIPAA Administrative Simplification Regulations can be found on the Health and Human Services (HHS) website at hhs.gov.

The following entities are affected by the HIPAA administration simplification requirements:

  • All health plans, including Medicaid, Medicare, and commercial plans
  • Healthcare Providers who choose to transmit any information in an electronic form in connection with a transaction for which HHS has adopted a standard
  • Healthcare clearinghouses

General Summary of Requirements

The following are general requirements under the administrative simplification of the HIPAA regulations.

Health Plans (including CMS)

  • May not refuse to conduct a standard transaction
  • May not delay, adversely impact, or attempt to adversely affect a standard transaction or a person using standard transaction
  • Can require standard data elements within a standard transaction
  • May use a business associate or clearinghouse as an intermediary to achieve compliance

Providers

  • Compliance required by any “health care provider who transmits any health information in electronic form in connection with a transaction referred to” in the Act
  • May use a business associate or clearinghouse as an intermediary to achieve compliance

HIPAA Regulations

As of the publication of this implementation guide, the following are references to the applicable federal regulations regarding the use of specific transactions for prior authorization:

  • Title II, Subtitle F – Administrative Simplification of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (Public Law 104-191, H. R. 3103, Kennedy-Kassebaum Bill) which amends Part C of Title XI of the Social Security Act, and is codified starting at 42 U.S.C. §1320d
  • 45 CFR Part 162 Subpart M - Referral Certification and Authorization

The following is an excerpt from the CFR for referral certification and authorization (relevant sections bolded).

§ 162.1302 Standards for referral certification and authorization transaction. The Secretary adopts the following standards for the referral certification and authorization transaction:

(b) For the period from March 17, 2009 through December 31, 2011 both—

(1) The standards identified in paragraph (a) of this section; and (2)(i) Retail pharmacy drugs. The Telecommunication Standard Implementation Guide Version D, Release 0 (Version D.0), August 2007, and equivalent Batch Standard Implementation Guide, Version 1, Release 2 (Version 1.2), National Council for Prescription Drug Programs. (Incorporated by reference in § 162.920.)

(ii) Dental, professional, and institutional request for review and response. The ASC X12 Standards for Electronic Data Interchange Technical Report Type 3—Health Care Services Review—Request for Review and Response (278), May 2006, ASC X12N/005010X217, and Errata to Health Care Services Review-—Request for Review and Response (278), ASC X12 Standards for Electronic Data Interchange Technical Report Type 3, April 2008, ASC X12N/005010X217E1. (Incorporated by reference in § 162.920.) (c) For the period on and after January 1, 2012, the standards identified in paragraph (b)(2) of this section.

Note: defines the use of the ASC X12 5010 278/217 for referral certification and authorization

The following is an excerpt from the CFR restricting trading partner agreements (relevant sections bolded).

§ 162.915 Trading partner agreements. A covered entity must not enter into a trading partner agreement that would do any of the following:

(a) Change the definition, data condition, or use of a data element or segment in a standard or operating rule, except where necessary to implement State or Federal law, or to protect against fraud and abuse. (b) Add any data elements or segments to the maximum defined data set. (c) Use any code or data elements that are either marked “not used” in the standard’s implementation specification or are not in the standard’s implementation specification(s). (d) Change the meaning or intent of the standard’s implementation specification(s). [65 FR 50367, Aug. 17, 2000, as amended at 76 FR 40495, July 8, 2011]

Note: trading partner agreements cannot modify the standard

The following is an excerpt from the CFR requiring the use of the standard transaction (relevant sections bolded).

§ 162.923 Requirements for covered entities.

(a) General rule. Except as otherwise provided in this part, if a covered entity conducts, with another covered entity that is required to comply with a transaction standard adopted under this part (or within the same covered entity), using electronic media, a transaction for which the Secretary has adopted a standard under this part, the covered entity must conduct the transaction as a standard transaction.

Note: requires the use of the standard within the same covered entity (e.g. within a clearinghouse)

The following is an excerpt from the CFR providing an exception for “direct data entry transactions” (relevant sections bolded).

§ 162.923 Requirements for covered entities.

(b) Exception for direct data entry transactions. A health care provider electing to use direct data entry offered by a health plan to conduct a transaction for which a standard has been adopted under this part must use the applicable data content and data condition requirements of the standard when conducting the transaction. The health care provider is not required to use the format requirements of the standard.

§ 162.103 Definitions Defines Direct data entry as “means the direct entry of data (for example, using dumb terminals or web browsers) that is immediately transmitted into a health plan’s computer.”

Note: allows the use of an alternative transaction as long as it uses the “applicable” data content and data condition requirements of the standard – intended to support organization that cannot perform the standard transaction

The following is an excerpt from the CFR providing the use a business associate (relevant sections bolded).

§ 162.923 Requirements for covered entities.

(c) Use of a business associate. A covered entity may use a business associate, including a health care clearinghouse, to conduct a transaction covered by this part. If a covered entity chooses to use a business associate to conduct all or part of a transaction on behalf of the covered entity, the covered entity must require the business associate to do the following:

(1) Comply with all applicable requirements of this part. (2) Require any agent or subcontractor to comply with all applicable requirements of this part.

Note: Covered entity may satisfy the transaction requirements through the use of business associate or clearing house that then has the obligation to use the standard

The following is an excerpt from the CFR defining additional rules for clearinghouses (relevant sections bolded).

§ 162.930 Additional rules for health care clearinghouses. When acting as a business associate for another covered entity, a health care clearinghouse may perform the following functions:

(a) Receive a standard transaction on behalf of the covered entity and translate it into a nonstandard transaction (for example, nonstandard format and/or nonstandard data content) for transmission to the covered entity. (b) Receive a nonstandard transaction (for example, nonstandard format and/or nonstandard data content) from the covered entity and translate it into a standard transaction for transmission on behalf of the covered entity.

Note: clearinghouses can convert non-standard transactions to and from standard transactions

The following is an excerpt from the CFR defining additional rules for health plans.

§ 162.925 Additional requirements for health plans

a) General rules. (1) If an entity requests a health plan to conduct a transaction as a standard transaction, the health plan must do so.

(2) A health plan may not delay or reject a transaction, or attempt to adversely affect the other entity or the transaction, because the transaction is a standard transaction. (3) A health plan may not reject a standard transaction on the basis that it contains data elements not needed or used by the health plan (for example, coordination of benefits information). (4) A health plan may not offer an incentive for a health care provider to conduct a transaction covered by this part as a transaction described under the exception provided for in § 162.923(b). (5) A health plan that operates as a health care clearinghouse, or requires an entity to use a health care clearinghouse to receive, process, or transmit a standard transaction may not charge fees or costs in excess of the fees or costs for normal telecommunications that the entity incurs when it directly transmits, or receives, a standard transaction to, or from, a health plan. (6) During the period from March 17, 2009 through December 31, 2011, a health plan may not delay or reject a standard transaction, or attempt to adversely affect the other entity or the transaction, on the basis that it does not comply with another adopted standard for the same period. (b) Coordination of benefits. If a health plan receives a standard transaction and coordinates benefits with another health plan (or another payer), it must store the coordination of benefits data it needs to forward the standard transaction to the other health plan (or other payer). (c) Code sets. A health plan must meet each of the following requirements: (1) Accept and promptly process any standard transaction that contains codes that are valid, as provided in subpart J of this part. (2) Keep code sets for the current billing period and appeals periods still open to processing under the terms of the health plan’s coverage.

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