Evolving HIPAA Transaction Code Sets

by Patricia S. Wilson, RT (R), CPC, PMP
President Bush, in his January 2004 State of the Union address, stated that every person in the United States will have an electronic medical record within 10 years. Since then, Americans are seeing terms such as Electronic Medical Record (EMR), Personal Health Record (PHR) and Semantic Interoperability showing up in magazine articles and within the speeches of politicians.
Thanks to the Health Information Portability and Accountability Act of 1996 (HIPAA), the idea of standardization of coded information has become a common understanding in the field of health care reimbursement. This act established the transaction code to be used for communication between all parties involved in the transmission of reimbursement information. However, coded information within health care does not end with the list established by HIPAA.
The primary objective of sharing all health care information in an electronic format requires standardization of format and content, much of which exists in clinical terminologies and code sets. These additional standards act as a complement to the HIPAA transaction code sets because they provide much more detailed information than is required as part of the reimbursement process.
Sharing health care information in an electronic format using standard clinical terminologies and code sets has been embraced internationally for several years, while the United States has lacked incentive to follow suit. President Bush’s statement set into motion the formation of numerous national committees, additional presidential directives and legislation regarding the need for standardization of health information.

History of Medical Codes

The codification of health care information is not new. The International Classification of Diseases (ICD) has its roots in a systematic classification of diseases developed by John Graunts in the 17th century called the Weekly Bill of Mortality in London. He was assessing the mortality rate of children under 6 years of age and was instrumental in statistics derived during the bubonic plague epidemic. Over the centuries, the coding of mortality rates in populations evolved, usually due to epidemics and war. It wasn’t until 1948, after accounting for the many health-related issues associated with World War II, that the World Health Organization took over the management and publication of probably the best known health classification systems.
At about the same time, the American Cancer Society set up a coding system published in book form to classify the morphology of neoplasms. This became the basis for the Systematized Nomenclature of Pathology (SNOP). Its management was taken over in the 1960s by the College of American Pathologists, and it subsequently became the Systematized Nomenclature of Medicine (SNOMED) in the 1970s. The 1960s and 1970s saw the development of several other coding systems and terminologies within the United States and internationally for many different aspects of health care such as procedure coding, radiology, pharmacy and others.

Classification Systems and Terminologies

The codification of data for use within the health care industry has been developed based on its specific use and scope. Some code sets have been established for the purpose of grouping similar terms together, primarily for use in evaluating mortality rates, public health analysis and reimbursement categories. These code sets are referred to as classification systems because they group together similar terms into categories for data collection and analysis.
Other functions within the electronic health record (EHR) require more granular terms than those used for reimbursement in classification systems and groupers, which are the code sets familiar to coders. The clinical terminologies used in other aspects of health care are often tailored to the particular area of interest such as pharmacy, radiology, laboratory and clinical management. Each term has a very specific meaning that is meant to be unambiguous.
A medical institution often develops many of these terminologies internally and specific to its needs and uses—for example, a “chargemaster” for order entry can be considered a locally defined terminology. Some other specific types of terminology in a medical institution can be dictated by outside influences, but are often driven by the needs and desires of clinicians and end users within the institution. For example, some of the more commonly used commercial terminologies include the Systematized Nomenclature of Medicine Clinical Terms (SNOMED CT®), National Drug Codes (NDC), and Logical Observation Identifiers Names and Codes (LOINC®). There are many different types of code sets because there is no single classification system or terminology that meets the needs of all operations within a medical institution.

Standardization of Codes

President Bush’s call to action for universal availability of an EMR saw immediate reaction by the health care industry. The federal government led the charge because of an Executive Order in April 2004 to develop and implement a nationwide Health Information Technology Infrastructure to improve quality, reduce medical errors, and improve the exchange of health care information. The Office of the National Coordinator for Health Information Technology has organized a partnership with many government agencies to identify and implement different types of coding and messaging standards.
One of the government agencies instrumental in this process is the Consolidated Health Informatics initiative (CHI). This agency is responsible for overseeing the identification and implementation of standards for approximately 20 government agencies, such as the Veteran’s Administration, the Department of Defense, and the Social Security Administration. These organizations are the leaders in the standardization effort for the federal government. The set of standards to be used by government agencies will be named by CHI. The standards established by CHI work together with the transaction code sets established by HIPAA, and will also be coordinated with initiatives within the commercial sector.
An organization called the Healthcare Information Technology Standards Panel (HITSP) has been established through funding from Health and Human Services (HHS) to serve as the voice of the public and private sector on standardization issues. They are to reach out to local and regional stakeholders in order to assess the needs and difficulties currently in place restricting the sharing of health care information across a wide range of software applications. The issue of privacy and security is paramount on their agenda, but also of importance is the need to standardize the communication of clinical information in order to obtain accurate and complete health care information for each patient.
The American National Standards Institute (ANSI) sponsors the Health Information Technology Standards Panel (HITSP) to bring cooperation between the public and private sectors for establishing standards to support interoperability for local, regional and national health information networks. Since June 2006, they have published several different lists of proposed standards to promote a nationwide HIT infrastructure. The primary HITSP terminology standards are:

  • ICD-9-CM
  • CPT®
  • HCPCS Level II
  • American Society for Testing and Materials (ASTM) E1239-04—Standard Practice for Description of Reservation/Registration-Admission, Discharge, Transfer
  • ICD-10-CM
  • ICD-10-PCS
  • Health Level 7 (HL7) V2. X (for messaging)
  • HL7 V3 Clinical Document Architecture (CDA) for text reports
  • LOINC®
  • National Council for Prescription Drug Programs (NCPDP) for pharmacy
  • National Drug File Reference Terminology (NDFRT)/RxNorm for formulary

This list of proposed standard terminologies highlights the point that no single standard can provide all of the information needed within an EHR.


As a certified coder, you may ask, “Why should I care about all of these different code sets? What’s in it for me (WIIFM)?” Some coders may already be familiar with an EHR as part of their normal workflow. It is probably of no consequence right now that the data in the background are codified. In the near future, though, that transparency will not exist.
One part of the numerous standardization objectives is to have a cross reference or map between the many different standard terminologies and the HIPAA transaction code sets. HHS gave the National Library of Medicine (NLM) the responsibility for funding, coordinating and/or performing the mapping of clinical standard terminologies to code sets outlined by HIPAA. The NLM has directed that three primary maps be developed as a starting point for review and comment of acceptance by the health care industry. The three maps are SNOMED CT® to ICD-9-CM, LOINC to CPT®, and SNOMED CT® to CPT®. The maps are to be built by the organizations responsible for the code sets and to be made available to the public for review and comment. The LOINC to CPT® map was made available to the public for review and comments in October 2006. The SNOMED CT® to CPT® map is due out early 2008. The SNOMED CT® to ICD-9-CM map is on hold at the moment in anticipation of the adoption of ICD-10-CM.
These maps are likely to be used for computer-assisted coding. New products and tools will be offered based on this information. The current coder’s workflow and overall job description is likely to change. It will have an impact on compliance and verification of coding.
Another impact on coders will be EHRs’ interaction with payers. This has already begun on a federal level. On Oct. 30,2007, HHS Secretary Mike Leavitt was quoted as saying that President Bush has authorized increased Medicare reimbursement for 1,200 physicians who use electronic health records. The intent is to provide incentive for adoption of EHR use. Even though it did not pass the Senate in December 2007, Secretary Leavitt anticipates that such legislation will gain ground in 2008. President Bush is requesting private insurance companies to provide similar reimbursement incentives.
The transaction code sets established as part of HIPAA are just the start of standardization of coded information within the health care industry. All areas of health care will be impacted by codified data used for tracking medical errors, clinical outcomes measurements and consistent delivery of health care. The impact will also be felt in the reimbursement process. As coders, it is important to watch the horizon so that we are prepared for the changes this standardization effort will produce.

Comments are closed.