HIPAA seeks to simplify coding in electronic transactions by mandating the use of national codes and discontinuing local codes. National codes will be updated on an annual basis.

What Is A Code Set?
A code set is any set of codes used for encoding data elements, such as tables of terms, medical concepts, medical diagnosis codes or medical procedure codes. Medical data code sets that are used in the health care industry include coding systems for:

• diseases, injuries, impairments, other health related problems and their manifestations
• causes of injury, disease, impairment or other health related problems
• actions taken to prevent, diagnose, treat or manage diseases, injuries and impairments and any substances, equipment supplies or other items used to perform these actions.

What Are the Code Sets?
The code sets being proposed as initial HIPAA standards are all de facto standards already in use by most health plans, health care clearinghouses, and health care providers. They are:

• ICD-9-CM (Volumes 1 and 2) – Diagnosis codes for all providers for diseases, injuries, impairments, other health problems and causes of injury, disease and impairment.
• ICD-9-CM (Volume 3) – Codes Inpatient Hospital procedures for diseases, injuries and impairments on hospital inpatients.
• NDC for drugs and biologicals.
• Code on Dental Procedures and Nomenclature for dental services.
• HCPCS Level II and CPT-4 for physicians services and other health care services on professional format.
• HCPCS for other substances, equipment, supplies and other items used in health care services.
• CDT – Dental Services