Transactions Overview

Transactions Overview
icon of a magnifying glass examining the data transfer between two computers

What Is a Transaction?

A transaction is an electronic exchange of information between two parties to carry out financial or administrative activities related to health care. For example, a health care provider will send a claim to a health plan to request payment for medical services.

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Health Care Transactions Basics (PDF)

Overview document of electronic transactions used in health care to increase efficiencies in operations, improve the quality and accuracy of information, and reduce the overall costs to the system.

Standards for Transactions

Under HIPAA, HHS adopted certain standard transactions for the electronic exchange of health care data. These transactions include:

  • Payment and remittance advice
  • Claims status
  • Eligibility
  • Coordination of benefits
  • Claims and encounter information
  • Enrollment and disenrollment
  • Referrals and authorizations
  • Premium payment

HIPAA covered entities who conduct any of these transactions electronically must use an adopted standard from ASC X12N or NCPDP (for certain pharmacy transactions).

Learn More

Learn more about transactions with the following fact sheets:

Additional Provisions to Simplify the Business of Health Care

In 2010, subsequent legislation introduced additional provisions that addressed the use of transactions, building upon the requirements already in place through HIPAA. Together, the provisions are referred to as Administrative Simplification, because their purpose is to simplify the business of health care.

The new and expanded provisions included requirements for the adoption of:

  • Operating rules for each of the existing transactions
  • A standard unique identifier for health plans
  • Standards for electronic funds transfer and electronic health care claims attachments

These provisions also created a new requirement for health plans to certify their compliance with the adopted standards and operating rules. They also established a new set of penalties that could be imposed on health plans for failure to comply or to certify their compliance. 

Enforcement of the Administrative Simplification provisions under HIPAA and subsequent legislation falls under HHS and is carried out by the National Standards Group (NSG) at CMS. Information about enforcement, compliance, and complaints can be found in the section of this website.

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Page Last Modified:
09/06/2023 04:57 PM