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Posted Friday, August 14, 2015 in Compliance

Protocols are the EDI software that enable communication between two computers electronically. Different companies use varying protocols across many industries. The X12 protocol is the prefered protocol for many enterprises. Thus, many trading partners must implement X12 into their business systems.


The American National Standards Institute (ANSI) developed the X12 EDI protocol in 1979. Inspired by the need for transmitting large quantities of data, the military and logistics companies were the first to utilize X12. ANSI developed, maintained, promoted, and interpreted the applications of the X12 EDI protocol.

Today, the Accredited Standards Committee (ASC) oversees the continuing development, improvement, and maintenance of the X12 protocol. The committee meets three times a year to maintain X12 standards. Over 3,000 standards experts from more than 300 companies compose the ASC X12 committee.

At inception, companies implemented X12 to transmit massive batch transactions. X12’s use now extends to include transaction processing in real-time. This means rather than being batched, transactions can be sent individually and more quickly as a result.

While industries such as government, finance, and logistics are among the 300,000+ businesses that utilize the X12 protocol, it is ubiquitous in health care. In 1996, Congress enacted the Health Insurance Portability and Accountability Act (HIPAA). X12 is the national HIPAA protocol and a mandate for health care transactions.


The majority of X12 transmissions are comprised of three main elements: data, segments, and loops. Here is a basic summary of X12’s elements:


There are two types of data elements in X12 standards.

  • Simple: The X12 Data Element Dictionary defines a simple data element as “A data element is equivalent to a field in a data dictionary. Data elements have a name, a data element number, a brief description, a data type, and a minimum and maximum length .”
  • Composite: Two or more simple elements divided by delimiter characters (part of X12 syntax, also known as data element separators). A telephone number is an example of composite data. Each of the three data elements in a telephone number reveal different information and must be in a uniformed order.

Segments are logical groupings of data elements equivalent to record types. Segments begin with two or three character tags that identify what type of segments they are. Thus a field’s meaning may vary based on the segment.


Sets of segments that are ordered and related within a transaction set make up a loop.

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