Introduction to HIPAA

Christopher Dunn
January 12, 2009 — 2,455 views  
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What is HIPAA?

The Department of Health and Human Services has developed a series of privacy regulations known collectively as the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). These regulations are designed to protect the privacy rights of individuals with regard to their confidential medical records. The act greatly restricts the dissemination and transmittal of personal patient information and dramatically affects the way healthcare information is handled.

Who do the HIPAA Regulations Apply to? HIPPA regulations have been crafted to have broad application. The provisions of the Act extend to all health care plans, health care providers who transmit health records in an electronic format, and health care clearinghouses and billing companies. The bill refers to these organizations as "Covered Entities". Ultimately, however, almost everyone will be affected in one way or another by these regulations, which will impact both consumers and providers of health care services.

Are Medical Transcription Services and Other 3rd Parties Considered "Covered Entities" Under HIPAA?

Most Medical Transcription Services and their employees are not considered "Covered Entities" under the Act unless their organization also engages in services that put them in the category of "Covered Entity". Transcription Services are typically regarded under the Act as "Business Associates". The Act defines a Business Associate as "any person or organization that performs a function or activity on behalf of a Covered Entity, but is not part of the Covered Entity's workforce (employees, volunteers, trainees and others under the Covered Entity's direct control, regardless of whether they are paid by the Covered Entity." Be aware that state regulations may differ from national regulations and certain States may define MT Services as Covered Entities.

Business Associates may not be directly governed by HIPAA regulations. However, they are governed indirectly by virtue of the fact that Covered Entities are required to obtain written assurances from the Business Associates that they deal with to ensure that patient identifying information is appropriately safeguarded. These written assurances must be included in a written contract between the Covered Entity and the Business Associate.

Because of the strict requirements of the Act relating to Covered Entities, Business Associates can expect that the Covered Entities for whom they perform services will be vigilant in requiring evidence of compliance from their Business Associate partners. This will likely take different forms from organization to organization. Organizations covered under this aspect of HIPAA should plan to understand and implement their own action plans and oversight mechanisms to ensure that they meet the requirements of the Act.

When did HIPAA Regulations Become Effective?

The rules became officially effective on April 14, 2001. However, the Act provides for a period of time before complete compliance is mandated. The effective date for small health care plans was April 14, 2004. All other covered entities were required to become fully compliant by April 14, 2003.

Does the HIPAA Act Govern the Transmittal of Electronic Patient Information?

The Act calls for the standardization of electronic document transmittal. The national standard which has been prescribed by HIPAA for electronic health record transmittal is ANSI X12. This national standard governs both the content and the format of patient information that is sent electronically between two organizations.

What are the Other Key Provisions of the Act?

The primary focus of the Act is to restrict the dissemination of patient health care information. The conditions under which information can be conveyed are spelled out very explicitly. If the Act does not specifically allow for health care information to be shared in a certain manner or under a certain set of conditions, it is prohibited.

The rules specifically pertain to health information that is transmitted or maintained in any form (oral, paper, electronic, etc.) and which contains patient identifying information. Patient identifying information includes such things as name, address, social security number, phone number, and any other information which could be used to identify an individual.

In order to be compliant, covered entities must implement measures to ensure that patient information is protected in accordance with the provisions of the Act. Specifically:

- Written notification must be given to individuals telling them how information will be used and to whom it will be disseminated (insurance and billing companies, or other health care practitioners, for example).

- Written consent must be obtained from the individual allowing for the use and maintenance of personal information as provided for by the Act.

- Disclosure or use of information for any other purpose or to any other organization requires specific authorization from the individual.

- Reasonable efforts must be made by covered entities to minimize the dispersal of patient information.

- Health information can be conveyed to Business Associates ("Business Associates" is a term that typically includes Medical Transcription Service Providers and their employees) only after written assurance is provided to guarantee the protection of the information.

- Privacy officials must be appointed by each covered entity to develop, implement and oversee privacy policy for the covered organization. A primary contact person must also be designated to handle complaints and inquiries about the organization's policy.

- All employees of the covered entity must receive formal training to ensure that they understand the requirements of the privacy Act as they pertain to their specific duties.

- Covered entities must establish adequate administrative, technical and physical safeguards to ensure that all privacy requirements are upheld within the organization.

What are the Penalties for Non-Compliance?

Covered entities which fail to comply with HIPAA regulations by the mandated compliance date may incur stiff penalties, including the payment of a fine. In certain cases, criminal charges may be brought against the non-compliant entity.

About the Author

Christopher L. Dunn holds an MBA from Brigham Young University. He has been active in operating and training aspects of the medical transcription and medical coding industry for the past 17 years.

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Christopher Dunn