What is HIPAA (Health Insurance Portability and Accountability Act) ?

HIPAA (Health Insurance Portability and Accountability Act of 1996) is United States legislation that provides data privacy and security provisions for safeguarding medical information. The law has emerged into greater prominence in recent years with the proliferation of health data breaches caused by cyberattacks and ransomware attacks on health insurers and providers.

The act, which was signed into law by President Bill Clinton on Aug. 21, 1996, contains five sections, or titles.

Title I: HIPAA Health Insurance Reform

Title I protects health insurance coverage for individuals who lose or change jobs. It also prohibits group health plans from denying coverage to individuals with specific diseases and pre-existing conditions, and from setting lifetime coverage limits.

Title II: HIPAA Administrative Simplification

Title II directs the U.S. Department of Health and Human Services (HHS) to establish national standards for processing electronic healthcare transactions. It also requires healthcare organizations to implement secure electronic access to health data and to remain in compliance with privacy regulations set by HHS.

Title III: HIPAA Tax-Related Health Provisions

Title III includes tax-related provisions and guidelines for medical care.

Title IV: Application and Enforcement of Group Health Plan Requirements

Title IV further defines health insurance reform, including provisions for individuals with pre-existing conditions and those seeking continued coverage.

Title V: Revenue Offsets

Title V includes provisions on company-owned life insurance and the treatment of those who lose their U.S. citizenship for income tax purposes.

In healthcare circles, adhering to HIPAA Title II is what most people mean when they refer to HIPAA compliance. Also known as the Administrative Simplification provisions, Title II includes the following HIPAA compliance requirements:

  • National Provider Identifier Standard. Each healthcare entity, including individuals, employers, health plans and healthcare providers, must have a unique 10-digit national provider identifier number, or NPI.
  • Transactions and Code Sets Standard. Healthcare organizations must follow a standardized mechanism for electronic data interchange (EDI) in order to submit and process insurance claims.
  • HIPAA Privacy Rule. Officially known as the Standards for Privacy of Individually Identifiable Health Information, this rule establishes national standards to protect patient health information.
  • HIPAA Security Rule. The Security Standards for the Protection of Electronic Protected Health Information sets standards for patient data security.
  • HIPAA Enforcement Rule. This rule establishes guidelines for investigations into HIPAA compliance violations.

What is the purpose of HIPAA?

HIPAA, also known as Public Law 104-191, has two main purposes: to provide continuous health insurance coverage for workers who lose or change their job, and to reduce the administrative burdens and cost of healthcare by standardizing the electronic transmission of administrative and financial transactions. Other goals include combating abuse, fraud and waste in health insurance and healthcare delivery and improving access to long-term care services and health insurance.

HHS expanded the act when it put the HIPAA omnibus rule in place in 2013 to implement modifications to HIPAA in accordance with guidelines set in 2009 by the Health Information Technology for Economic and Clinical Health (HITECH) Act. These guidelines concern the responsibilities of business

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