To improve the efficiency and effectiveness of the health care system, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) included Administrative Simplification provisions that required the U.S. Department of Health and Human Services (HHS) to adopt national standards for electronic health care transactions and code sets, unique health identifiers, and security. Congress also incorporated into HIPAA provisions that mandated the adoption of federal privacy protections for individually identifiable health information. The Administrative Simplification and privacy rules were designed to improve the efficiency of the health care system by standardizing the electronic exchange of data and protect the security and privacy of member health information.

Effective October 1, 2015, health care providers, payers, clearinghouses and billing services are required to comply with the transition to ICD-10, which means:

• ICD-10 diagnosis codes are used for all health care services.
• ICD-10 procedure codes are used for all hospital inpatient procedures. (Please note that the change to ICD-10 does not affect CPT coding for outpatient procedures and physician services.)
• All electronic transactions must use Version 5010 standards.
  

For more information, review our ICD-10 FAQs and timeline (PDF).

The HIPAA X12, version 5010, is a revised set of HIPAA electronic standards that have been adopted to replace previous versions of specific health care transactions. Covered entities, such as health plans, health care clearinghouses and health care providers, are required to conform to HIPAA 5010 standards.

For more information, review our HIPAA 5010A1/A2 (with errata) FAQs (PDF).

The National Provider Identifier (NPI) is a HIPAA Administrative Simplification Standard. The NPI is a unique numeric 10-digit identifier that is assigned by the Centers for Medicare and Medicaid Services (CMS). Covered health care providers must use the NPIs in the administrative and financial transactions adopted under HIPAA.

There are two types of NPIs that providers can apply for through the National Plan and Provider Enumeration System (NPPES):

• Type 1 NPIs are issued to providers or individuals who render health care. Examples include physicians, dentists, nurse practitioners, chiropractors, pharmacists and physical therapists.
• Type 2 NPIs are issued to health care providers and organizations. Examples include hospitals, home health agencies, clinics, nursing homes, residential treatment centers, laboratories, ambulance companies, group practices, suppliers of durable medical equipment (DME) and pharmacies.
  

For more information, visit HHS and CMS.

The Administrative Simplification provisions of the Affordable Care Act of 2010 (ACA) build on HIPAA. The Patient Protection and Affordable Care Act (PPACA) required HHS to issue operating rules for HIPAA-standard transactions, to make the information and transmission formats more uniform and reduce the role of plan-specific companion guides.

To obtain more information regarding HHS's final operating rules and compliance schedules, see the CMS operating rules overview or the CAQH CORE operating rules.