The HIPAA Eligibility Responder

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Before a provider renders medical services to a patient, he/she wants to know if this service is covered by an insurance policy.  Traditionally this has been handled by telephone operators or voice response systems with fax back options. HIPAA was conceived to bring administrative simplification into the provider-payer relationship and was intended to lower the cost of doing business for payers and facilitate the communications between payer and provider.

EDI, Electronic Data Interchange, revolutionized many industries. Banking exploded in the last 30 years due in large part to the effectiveness of electronic transactions. Every time you charge, every time you get cash from an ATM machine you invoke electronic transactions. The health care industry came very late to this new business tool and was forced into EDI by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) which mandated that every payer and many providers had to be able to communicate through EDI. With lots of kicking and screaming the law was finally implemented 1/1/2003 and now 10 years later more than 90 percent of medical claims are transferred as EDI. The other transactions limp, like payment advice and eligibility are somewhat behind but they too are increasingly becoming the tool for the business transaction they were designed for.


The 270 eligibility request transaction is designed to let a provider transmit patient information that clearly identifies a particular patient and inquires about the policy coverage of the services in question. Even multiple benefits can be requested and diagnosis codes can be included.  A payer's EDI system would parse out the request, look up the membership records, find its eligibility status and transmit it back with the 271 eligibility response transaction listing existing coverage.

While this approach is straight forward, it is not easy to implement into an existing information management system and if the volume of 270 requests is low or even non-existent, then it would be sometimes unwise to spend a lot of money and resources on the automatic handling of eligibility requests.

This is where the HIPAA Eligibility Responder comes in.  This software was designed to parse out a 270 eligibility request file and allow the manual entry of eligibility response information.  It would then use the request information to construct a 271 response transaction, ready to be sent back to the inquiring provider.  The HIPAA Eligibility Responder is a low cost solution designed to bring a payer or any other covered entity into compliance with the HIPAA law.


The HIPAA Eligibility responder can work together with any SQL compliant database. Eligibility requests can be exported into the database and a process to look-up member benefit status is available.  The implementer will have to populate the eligible benefits tables from their database.