The Health Insurance Portability and Accountability Act ("HIPAA") was enacted in 1996. The "Administrative Simplification" provisions of HIPAA require that certain types of transactions among health care entities be conducted in a standard format when they are conducted electronically. These transactions include:
Receiving remittance advice statements
Querying patient eligibility
Checking claims status
Requesting prior authorization where required
Since the HIPAA standards are fully implemented, Medicare contractors and other healthcare payers will be prohibited from accepting or issuing electronic transactions that do not meet the new standards. Ultimately, it is hoped that providers can benefit from the standardization of electronic transactions as it will enable many billing, clinical, and financial applications to be accomplished in a faster and more cost-effective way.