Frequently Asked Questions About Electronic Transaction Standards Adopted Under HIPAA. Do I have to use standard transactions when conducting business inside my corporate boundaries?


The decision on when a standard must be used does not depend on whether the transaction is being sent inside or outside corporate boundaries. Instead, a simple two part test, in question form, can be used to determine whether the standards are required.

Question 1: Is the transaction initiated by a covered entity or its business associate? If no, the standard need not be used.

Question 2: Is the transaction one for which the Secretary had adopted a standard? If yes, the standard must be used. If no, the standard need not be used.

For purposes of question 1, a business associate acting on behalf of a covered entity can only perform those particular functions that the covered entity itself could perform in the transaction. The regulation requires health plans to accept standard transactions from any person.

For purposed of question 2, the definitions of the transactions themselves, as stipulated in Subpart K through Subpart R of the regulation, must be used to determine if the function is a transaction for which the Secretary has adopted a standard.