Administrative Simplification requirements, part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), govern how providers, health plans, and clearinghouses must conduct electronic, administrative transactions and set privacy and security standards for transmitting electronic health information.
The National Standards Group (NSG) within the Office of Burden Reduction & Health Informatics (OBRHI) administers HIPAA Administrative Simplification requirements related to the format and content of electronic, administrative health care transactions, such as claims and payment. The responsibility for administering HIPAA Administrative Simplification provisions related to privacy and security has been delegated to the Office for Civil Rights (OCR).
NSG uses recommendations from the health care industry to develop and enforce regulations that adopt standards, operating rules, unique identifiers, and code sets that all covered entities must follow when conducting administrative health care transactions electronically, called HIPAA Standard Transactions.
Administrative Simplification works to standardize how business is done across the health care system to reduce burden and lower costs for all. When electronic administrative tasks between players in the health care industry are conducted the same way across all covered entities, the industry can automate many of its billing and payment processes. This reduces time spent on administrative tasks and saves health care dollars.
Who Has to Comply with Administrative Simplification Standards?
Providers
Providers who submit HIPAA transactions electronically, such as claims, are considered covered entities and must adhere to Administrative Simplification requirements. Examples include doctors, clinics, psychologists, dentists, chiropractors, nursing homes, and pharmacies.
Health Plans
For HIPAA purposes, health plans include health insurance companies; health maintenance organizations (HMOs); employer-sponsored health plans; and government programs that pay for health care, like Medicare, Medicaid, and military and veterans’ health programs.
Clearinghouses
Clearinghouses considered covered entities are organizations that process nonstandard health information to conform to standards for data content or format, or vice versa, on behalf of other organizations.
Business Associates
If a covered entity engages a business associate to help carry out its health care activities and functions, the covered entity must have a written business associate contract or other arrangement with the business associate that requires HIPAA compliance.
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Questions?
E-mail Administrative Simplification at: administrativesimplification@cms.hhs.gov