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==Protected Health Information (HIPAA)==
The '''Health Insurance Portability and Accountability Act (HIPAA) of 1996 (P.L.104-191)''' ['''HIPAA'''] was enacted by the U.S. Congress and signed by President Bill Clinton in 1996. It was originally sponsored by Sen. Ted Kennedy and Sen. Nancy Kassebaum. Title I of HIPAA protects health insurance in the United States coverage for workers and their families when they change or lose their jobs. Title II of HIPAA, known as the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.
The '''Health Insurance Portability and Accountability Act'''(HIPAA) was enacted by the U.S. Congress in [[1996]].
 
According to the Centers for Medicare and Medicaid Services (CMS) website, Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs.<br>
The Administration Simplification provisions also address the security and privacy of health data. The standards are meant to improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of [[electronic data interchange]] in the U.S. health care system.
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HIPAA regulations define health information as "any information, whether oral or recorded in any form or medium" that:<br>
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==Title I: Health Care Access, Portability, and Renewability==
Title I of '''HIPAA''' regulates the availability and breadth of group health plans and certain individual health insurance policies.  It amended the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code.<br>
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:* "Is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse"
Title I also limits restrictions that a group health plan can place on benefits for preexisting conditions.  Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment. However, individuals may reduce this exclusion period if they had group health plan coverage or health insurance prior to enrolling in the plan.  Title I allows individuals to reduce the exclusion period by the amount of time that they had "creditable coverage" prior to enrolling in the plan and after any "significant breaks" in coverage.  "Creditable coverage" is defined quite broadly and includes nearly all group and individual health plans, Medicare, and Medicaid. A "significant break" in coverage is defined as any 63 day period without any creditable coverage.<br>
:* "Relates to the past, present, or future physical or mental health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment for the provision of health care to an individual."<br>
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It is worth emphasizing that while HIPAA's primary privacy concern is health information exchanged or stored electronically, the Privacy Rule also reaches to data "[t]ransmitted or maintained in any other form or medium." That includes paper records, fax documents and oral communications.<br>
Some health care plans are exempted from Title I requirements, such as long-term health plans and limited-scope plans such as dental or vision plans that are offered separately from the general health plan. However, if such benefits are part of the general health plan, then HIPAA still applies to such benefits. For example, if the new plan offers dental benefits, then it must count creditable continuous coverage under the old health plan towards any of its exclusion periods for dental benefits.<br>
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In contrast, HIPAA's Security, Identifier, and Transaction and Code Set rules only cover electronic information. For details on what is and is not "electronic" see the discussion of Security Rule applicability.<br>
An alternate method of calculating creditable continuous coverage is available to the health plan under Title I. That is, 5 categories of health coverage can be considered separately, including dental and vision coverage. Anything not under those 5 categories must use the general calculation (e.g., the beneficiary may be counted with 18 months of general coverage, but only 6 months of dental coverage, because the beneficiary did not have a general health plan that covered dental until 6 months prior to the application date). Since limited-coverage plans are exempt from HIPAA requirements, the odd case exists in which the applicant to a general group health plan cannot obtain certificates of creditable continuous coverage for independent limited-scope plans such as dental to apply towards exclusion periods of the new plan that does include those coverages.<br>
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Protected health information (PHI) under HIPAA includes any individually identifiable health information. Identifiable refers not only to data that is explicitly linked to a particular individual (that's identified information). It also includes health information with data items which reasonably could be expected to allow individual identification.<br>
Hidden exclusion periods are not valid under Title I (e.g., "The accident, to be covered, must have occurred while the beneficiary was covered under this exact same health insurance contract"). Such clauses must not be acted upon by the health plan and also must be re-written so that they comply with HIPAA.<br>
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De-indentified information is that from which all potentially identifying information has been removed. (HIPAA also has a provision for a limited data set, from which most but not all potentially identifying information has been removed.)
To illustrate, suppose someone enrolls in a group health plan on January 1, 2006.  This person had previously been insured from January 1, 2004 until February 1, 2005 and from August 1, 2005 until December 31, 2005. To determine how much coverage can be credited against the exclusion period in the new plan, start at the enrollment date and count backwards until you reach a significant break in coverage. So, the five months of coverage between August 1, 2005 and December 31, 2005 clearly counts against the exclusion period.  But the period without insurance between February 1, 2005 and August 1, 2005 is greater than 63 days.  Thus, this is a significant break in coverage, and any coverage prior to it cannot be deducted from the exclusion period.  So, this person could deduct five months from his or her exclusion period, reducing the exclusion period to seven months.  Hence, Title I requires that any preexisting condition begin to be covered on August 1, 2006.<br>
 
Note that the definition of PHI excludes individually identifiable health information in education records covered by the Family Educational Rights and Privacy Act. It also excludes employment records held by a covered entity in its role as employer.  
 
 
 
==HIPAA==
Title II of HIPAA, the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.<br>
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The Administrative Simplification (AS) provisions also address the security and privacy of health data. The standards are meant to improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of electronic data interchange in the US health care system.
==Title I: Health Care Access, Portability, and Renewability==
Title I of '''HIPAA''' regulates the availability and breadth of group and individual health insurance plans.  It amends both the Employee Retirement Income Security Act and the Public Health Service Act. 
Title I prohibits any group health plan from creating eligibility rules or assessing premiums for individuals in the plan based on health status, medical history, genetic information, or disability. This does not apply to private individual insurance.
Title I also limits restrictions that a group health plan can place on benefits for preexisting conditions. Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment. However, individuals may reduce this exclusion period if they had health insurance prior to enrolling in the plan.  Title I allows individuals to reduce the exclusion period by the amount of time that they had “creditable coverage” prior to enrolling in the plan and after any “significant breaks” in coverage.  “Creditable coverage” is defined quite broadly and includes nearly all group and individual health plans, Medicare, and Medicaid. A “significant break” in coverage is defined as any 63 day period without any creditable coverage.
Title I also forbids individual health plans from denying coverage or imposing preexisting condition exclusions on individuals who have at least 18 months of creditable group coverage without significant breaks and who are not eligible to be covered under any group, state, or federal health plans at the time they seek individual insurance.


==Title II:  Preventing Health Care Fraud and Abuse; Administrative Simplification; Medical Liability Reform==
==Title II:  Preventing Health Care Fraud and Abuse; Administrative Simplification; Medical Liability Reform==
 
Title II of HIPAA defines numerous offenses relating to health care and sets civil and criminal penalties for them.  It also creates several programs to control fraud and abuse within the health care system. However, the most significant provisions of Title II are its Administrative Simplification rules.  Title II requires the Department of Health and Human Services (HHS) to draft rules aimed at increasing the efficiency of the health care system by creating standards for the use and dissemination of health care information.<br>
Title II of HIPAA defines numerous offenses relating to health care and sets civil and criminal penalties for them.  It also creates several programs to control fraud and abuse within the health care system.<ref>{{usc|42|1320a-7c|}}</ref><ref>{{usc|42|1395ddd}}</ref><ref>{{usc|42|1395b-5}}</ref>  However, the most significant provisions of Title II are its Administrative Simplification rules.  Title II requires the [[Department of Health and Human Services]] (HHS) to draft rules aimed at increasing the efficiency of the health care system by creating standards for the use and dissemination of health care information.
 
These rules apply to “covered entities” as defined by HIPAA and the HHS.  Covered entities include health plans, health care clearinghouses, such as billing services and community health information systems, and health care providers that transmit health care data in a way that is regulated by HIPAA.<ref>{{CodeFedReg|45|160|103}}</ref><ref>[http://hipaa.ohio.gov/tools/CEDefinition.pdf Definitions of a Covered Entity]</ref>
 
Per the requirements of Title II, the HHS has promulgated five rules regarding Administrative Simplification:  the Privacy Rule, the Transactions and Code Sets Rule, the Security Rule, the Unique Identifiers Rule, and the Enforcement Rule.
 
===The Privacy Rule===
The Privacy Rule is the most complex of the four, setting standards for how protected health information (PHI) "in any form or medium" should be controlled. (HIPAA's other rules cover only electronic information.) This Rule took effect in April 2003 for large entities, and a year later for small ones. (For details, see the HIPAA compliance calendar.) Privacy Rule protections extend to every patient whose information is collected, used or disclosed by covered entities. It imposes responsibilities on the entire workforce of a covered entity -- including all employees and volunteers -- in order to secure those rights. It also requires contractual assurances for any business associates of health care institutions that handle health care information on a covered entity's behalf. States have many laws and regulations that address health information. HIPAA adds its protections to those the states provide. In most cases, where state requirements are stricter they remain in force; HIPAA does not preempt them. Put differently, the Privacy Rule establishes a federal floor for health privacy, but not a ceiling.<br>
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In its most visible change, the Privacy Rule requires covered entities to provide patients with a Notice of Privacy Practices. '''The Notice must describe, in general terms, how organizations will protect health information, and specify the patient's right to:'''<br>
These rules apply to "covered entities" as defined by HIPAA and the HHS. Covered entities include health plans, health care clearinghouses, such as billing services and community health information systems, and health care providers that transmit health care data in a way that is regulated by HIPAA.<br>
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:* Gain access to and, if desired, obtain a copy of his or her own health records
Per the requirements of Title II, the HHS has promulgated five rules regarding Administrative Simplification: the Privacy Rule, the Transactions and Code Sets Rule, the Security Rule, the Unique Identifiers Rule, and the Enforcement Rule.<br>
:* Request corrections of errors that the patient finds (or include the patient's statement of disagreement if the institution believes the information is correct)
:* Receive an accounting of how their information has been used (including a list of the persons and institutions to whom or which it has been disclosed)
:* Request limits on access to, and additional protections for, particularly sensitive information
:* Request confidential communications (by alternative means or at alternative locations) of particularly sensitive information
:* Complain to the facility's privacy officer if there are problems
:* Pursue the complaint with the US Department of Health and Human Services' Office of Civil Rights if the problems are not satisfactorily resolved<br>
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A copy of the Privacy Notice must be provided the first time a patient sees a direct treatment provider, and any time thereafter when requested. On that first visit, treatment providers must also make a good faith effort to obtain a written acknowledgment, confirming that a copy of the Notice was obtained. Health plans and insurers must also provide periodic Notices to their customers, but do not need to secure any acknowledgment.
===Privacy Rule===
The effective compliance date of the Privacy Rule was April 14, 2003 with a one-year extension for certain "small plans". The HIPAA Privacy Rule regulates the use and disclosure of certain information held by "covered entities" (generally, health care clearinghouses, employer sponsored health plans, health insurers, and medical service providers that engage in certain transactions.) It establishes regulations for the use and disclosure of Protected Health Information (PHI).  PHI is any information held by a covered entity which concerns health status, provision of health care, or payment for health care that can be linked to an individual. This is interpreted rather broadly and includes any part of an individual's medical record or payment history.<br>
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HIPAA requires no other documentation from the patient to use or disclose information for basic functions, like treatment and payment, or for a broad range of other core health care operations. State laws may nonetheless require some kind of consent or authorization form from the patient for these purposes. (It is common for institutions to claim, incorrectly, that HIPAA does.)<br>
Covered entities must disclose PHI to the individual within 30 days upon request. They also must disclose PHI when required to do so by law, such as reporting suspected child abuse to state child welfare agencies.<br>
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By contrast, the Privacy Rule does require that patients sign a supplemental authorization before information can be used for certain "extra" purposes like research, or certain kinds of marketing and fund raising. Health care institutions cannot condition treatment or payment for health care services on receiving a patient's authorization for such supplemental uses.<br>
A covered entity may disclose PHI to facilitate treatment, payment, or health care operations, or if the covered entity has obtained authorization from the individual. However, when a covered entity discloses any PHI, it must make a reasonable effort to disclose only the minimum necessary information required to achieve its purpose.<br>
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'''The general approach of the Rule beyond that is:''' If a person has a right to make a health care decision, then he or she has the right to control information associated with that decision. Children and those who are incompetent may have decisions about both health care and health information made by a personal representative. (Typically, the personal representative is the parent in the case of a child.) HIPAA extends extra protections for especially sensitive information -- notably psychotherapy notes, which require a supplemental authorization for release. Genetic information issues are not yet addressed by HIPAA, nor does HIPAA extend any special protections to HIV, substance abuse or other information categories that often receive special treatment in state law.<br>
The Privacy Rule gives individuals the right to request that a covered entity correct any inaccurate PHI. It also requires covered entities to take reasonable steps to ensure the confidentiality of communications with individuals. For example, an individual can ask to be called at his or her work number, instead of home or cell phone number.<br>
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'''Although the Privacy Rule is complicated (to put it mildly) it does have an overall scheme for its protections:'''<br>
The Privacy Rule requires covered entities to notify individuals of uses of their PHI.  Covered entities must also keep track of disclosures of PHI and document privacy policies and procedures. They must appoint a Privacy Official and a contact person responsible for receiving complaints and train all members of their workforce in procedures regarding PHI.<br>
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* Uses for treatment, payment and a long list of other routine health care operations are covered by the "Notice" that patients acknowledge receiving
An individual who believes that the Privacy Rule is not being upheld can file a complaint with the United States Department of Health and Human Services Office for Civil Rights (OCR).<br>
* A few particular kinds of uses -- notably for research, marketing or fund raising -- require a specific, separate written "authorization"
* A few others require only an opportunity to agree or object orally, but no consent or authorization -- notably, this includes listing of patients in facility directories, and disclosures to those involved in a patient's care, such as family members. (It is common to get written authorization for this too, though it is not required)<br>
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Beyond treatment, payment and health care operations, there is another broad category of uses and disclosures that are permitted without patients' permission.<br>
However, according to the ''Wall Street Journal'', the OCR has a long backlog and ignores most complaints. "Complaints of privacy violations have been piling up at the Department of Health and Human Services. Between April of 2003 and November of 2006, the agency fielded 23,886 complaints related to medical-privacy rules, but it has not yet taken any enforcement actions against hospitals, doctors, insurers or anyone else for rule violations. A spokesman for the agency says it has closed three-quarters of the complaints, typically because it found no violation or after it provided informal guidance to the parties involved." However, in July of 2011, UCLA agreed to pay $865,500 in a settlement regarding potential HIPAA violations. An HHS Office for Civil Rights investigation showed from 2005 to 2008 unauthorized employees, repeatedly and without legitimate cause, looked at the electronic protected health information of numerous UCLAHS patients.<br>
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'''This includes PHI uses and disclosures:'''<br>
 
===Transactions and Code Sets Rule===
The HIPAA/EDI provision was scheduled to take effect from October 16, 2003 with a one-year extension for certain "small plans". However, due to widespread confusion and difficulty in implementing the rule, CMS granted a one-year extension to all parties. On January 1, 2012 the newest version 5010 becomes effective, replacing the version 4010. This allows for the larger field size of ICD-10-CM as well as other improvements.<br>
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* For public health activities
After July 1, 2005 most medical providers that file electronically did have to file their electronic claims using the HIPAA standards in order to be paid.<br>
* About victims of abuse, neglect or domestic violence
* For health oversight activities
* For judicial or administrative proceedings
* For law enforcement
* About deceased persons (including organ and tissue donations)
* For research, without any authorization, where permitted by an IRB or Privacy Board waiver
* To avert a serious, imminent threat to public safety
* Certain specialized government functions (e.g., national security, military, corrections)
* Anything else required by law<br>
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'''Individuals would be entitled to an accounting of (some of) these disclosures, though that accounting might be temporarily suspended in certain circumstances.'''<br>
Key [[electronic data interchange|EDI]]<!-- Please Review. Einar -->(X12) transactions used for HIPAA compliance are:<br>
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Over and above all the categories, HIPAA imposes a very general rule on anyone who deals with protected health information: collection, use and disclosure should be no greater than necessary to complete a work-related task. For obvious reasons, this is called the minimum necessary standard. The minimum necessary standard is partially waived for health practitioners engaged in treatment -- it still applies to treatment uses, but not to disclosures between or among practitioners. The regulations relax the requirement in part to avoid any possible interference in the daily practice of delivering health care.<br>
'''EDI Health Care Claim Transaction set (837)''' is used to submit health care claim billing information, encounter information, or both, except for retail pharmacy claims (see EDI Retail Pharmacy Claim Transaction). It can be sent from providers of health care services to payers, either directly or via intermediary billers and claims clearinghouses. It can also be used to transmit health care claims and billing payment information between payers with different payment responsibilities where coordination of benefits is required or between payers and regulatory agencies to monitor the rendering, billing, and/or payment of health care services within a specific health care/insurance industry segment.<br>
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Health care facilities are under an obligation to integrate a minimum necessary standard into their policies and procedures. That includes administrative rules as well as, where available, computer-enforced access controls. Every covered entity must put in place general privacy policies that reflect HIPAA's requirements, and, if they are stricter, the requirements of state law. Those policies must include sanctions for employees that violate them, including termination for serious or repeated violations.<br>
For example, a state mental health agency may mandate all healthcare claims, Providers and health plans who trade professional (medical) health care claims electronically must use the 837 Health Care Claim: Professional standard to send in claims. As there are many different business applications for the Health Care claim, there can be slight derivations to cover off claims involving unique claims such as for Institutions, Professionals, Chiropractors, and Dentists etc.<br>
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Institutions must designate a privacy officer, who will have the responsibility for enforcing the regulations, as well as supervising (or handling directly) the procedures to handle requests for information access, corrections to records, accountings of disclosures, processing complaints and so forth. Institutions must also, as noted, include privacy requirements in their contracts with business associates. All employees (and volunteers) must be educated about privacy practices in a manner "appropriate" to their job responsibilities.
'''EDI Retail Pharmacy Claim Transaction (NCPDP Telecommunications Standard version 5.1)''' is used to submit retail pharmacy claims to payers by health care professionals who dispense medications, either directly or via intermediary billers and claims clearinghouses. It can also be used to transmit claims for retail pharmacy services and billing payment information between payers with different payment responsibilities where coordination of benefits is required or between payers and regulatory agencies to monitor the rendering, billing, and/or payment of retail pharmacy services within the pharmacy health care/insurance industry segment.<br>
 
===Transactions and Code Sets Standards===
The HIPAA/EDI provision was scheduled to take effect October 16, 2003 with a one-year extension for certain "small plans"; however, due to widespread confusion and difficulty in implementing the rule, CMS granted a one-year extension to all parties. As of October 16, 2004, full implementation was not achieved and CMS began an open-ended "contingency period." Penalties for non-compliance were not levied; however, all parties are expected to make a "good-faith effort" to come into compliance.<br>
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'''Note:''' (Normally, small covered entities have one year more than their large colleagues. However, the Administrative Simplification Compliance Act (PL107-105) provided a one-year extension for large covered entities that submitted a compliance plan by 15 October 2002. Small entities were not provided with an extension opportunity. For other rule dates, see the HIPAA compliance calendar.)<br>
'''EDI Health Care Claim Payment/Advice Transaction Set (835)''' can be used to make a payment, send an Explanation of Benefits (EOB), send an Explanation of Payments (EOP) remittance advice, or make a payment and send an EOP remittance advice only from a health insurer to a health care provider either directly or via a financial institution.<br>
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Regulations associated with the TCS Rule mandate uniform electronic interchange formats for all covered entities. It is this standardization -- along with the introduction of uniform identifiers for plans, providers, employers and patients under the Identifier Rule -- that is expected to produce the lion's share of the efficiency savings of "administrative simplification." Unlike the HIPAA Privacy Rule, which applies to protected health information (PHI) in "any form or medium," the TCS Rule covers only PHI in electronic form. (Perhaps it is self-evident that an electronic format standard could apply only to electronically-rendered information. However, this "electronic focus" is true of the HIPAA Identifier and Security rules as well. For more information, see the discussion of electronic applicability under the Security Rule.)<br>
'''EDI Benefit Enrollment and Maintenance Set (834)''' can be used by employers, unions, government agencies, associations or insurance agencies to enroll members to a payer. The payer is a healthcare organization that pays claims, administers insurance or benefit or product. Examples of payers include an insurance company, health care professional (HMO), preferred provider organization (PPO), government agency (Medicaid, Medicare etc.) or any organization that may be contracted by one of these former groups.<br>
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While many entities in the health sector have developed, or are in the process of developing, electronic data interchange (EDI) standards, the consensus remains that "the lack of common, industry-wide standards [is] a major obstacle to realizing potential efficiency and savings." (Final TCS Rule, p.3) Hence HIPAA allows the US Department of Health and Human Services (DHHS) to select the best of these efforts and require their use by all covered entities.<br>
'''EDI Payroll Deducted and other group Premium Payment for Insurance Products (820)''' is a transaction set which can be used to make a premium payment for insurance products. It can be used to order a financial institution to make a payment to a payee.<br>
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The TCS Rule has selected its standards from among the preexisting transaction and code set specifications of a variety of non-governmental designated standards maintenance organizations (DSMOs). The DSMOs retain the primary responsibility for updating their standards as evolving health sector needs dictate. (The Secretary of DHHS may at any time pick an alternative to those from DMSOs if it will substantially reduce administrative costs. But any new standard must be promulgated using formal rule-making procedures, including appropriate time for notice and comment.)<br>
'''EDI Health Care Eligibility/Benefit Inquiry (270)''' is used to inquire about the health care benefits and eligibility associated with a subscriber or dependent.<br>
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At present, the TCS Rule encompasses the following standard electronic transaction formats -- preponderantly derived from the ANSI X12N standards:<br>
'''EDI Health Care Eligibility/Benefit Response (271)''' is used to respond to a request inquire about the health care benefits and eligibility associated with a subscriber or dependent.<br>
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:* Health Care Claims or equivalent encounter information (X12N 837)
'''EDI Health Care Claim Status Request (276)''' This transaction set can be used by a provider, recipient of health care products or services or their authorized agent to request the status of a health care claim.<br>
:* Eligibility for a Health Plan (X12N 270/271)
:* Referral Certification and Authorization (X12N 278 or NCPDP for retail pharmacy)
:* Health Care Claim Status (X12N 276/277)
:* Enrollment and Dis-enrollment in a Health Plan (X12N 834)
:* Health Care Payment and Remittance Advice (X12N 835)
:* Health Plan Premium Payments (X12N 820)
:* Coordination of Benefits (X12N 837 or NCPDP for retail pharmacy)<br>
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Copies of the detailed implementation specifications for each X12N standard may be downloaded for free. (Note, however, that each one runs several hundred pages.)<br>
'''EDI Health Care Claim Status Notification (277)''' This transaction set can be used by a health care payer or authorized agent to notify a provider, recipient or authorized agent regarding the status of a health care claim or encounter, or to request additional information from the provider regarding a health care claim or encounter. This transaction set is not intended to replace the Health Care Claim Payment/Advice Transaction Set (835) and therefore, is not used for account payment posting. The notification is at a summary or service line detail level. The notification may be solicited or unsolicited.<br>
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'''Within these transactions, the standards for coding information include:'''<br>
'''EDI Health Care Service Review Information (278)''' This transaction set can be used to transmit health care service information, such as subscriber, patient, demographic, diagnosis or treatment data for the purpose of request for review, certification, notification or reporting the outcome of a health care services review.<br>
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:* International Classification of Disease, Clinical Modification (ICD-CM)
'''EDI Functional Acknowledgement Transaction Set (997)''' this transaction set can be used to define the control structures for a set of acknowledgments to indicate the results of the syntactical analysis of the electronically encoded documents. Although it is not specifically named in the HIPAA Legislation or Final Rule, it is necessary for X12 transaction set processing .  The encoded documents are the transaction sets, which are grouped in functional groups, used in defining transactions for business data interchange. This standard does not cover the semantic meaning of the information encoded in the transaction sets.<br>
:* National Drug Codes (NDC)
:* Code on Dental Procedures and Nomenclature (CDT)
:* Health care Common Procedure Coding System (HCPCS)
:* Current Procedure Terminology (CPT)<br>
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===The Security Rule===
===Security Rule===
The Final Rule on Security Standards was issued on February 20, 2003. It took effect on April 21, 2003 with a compliance date of April 21, 2005 for most covered entities and April 21, 2006 for “small plans”. The Security Rule complements the Privacy Rule. While the privacy pertains to all protected heath information (PHI), including paper and electronic. The Security rule deals specifically with electronic protected health information (EPHI). It lays out three types of security safeguards required for compliance: administrative, physical, and technical. For each of these types, the Rule identifies various security standards, and for each standard, it names both required and addressable implementation specifications. Required specifications must be adopted and administered as dictated by the Rule. Addressable specifications are more flexible. Individual covered entities can evaluate their own situation and determine the best way to implement addressable specifications.<br>
The Final Rule on Security Standards was issued on February 20, 2003. It took effect on April 21, 2003 with a compliance date of April 21, 2005 for most covered entities and April 21, 2006 for "small plans". The Security Rule complements the Privacy Rule. While the Privacy Rule pertains to all Protected Health Information (PHI) including paper and electronic, the Security Rule deals specifically with Electronic Protected Health Information (EPHI). It lays out three types of security safeguards required for compliance: administrative, physical, and technical. For each of these types, the Rule identifies various security standards, and for each standard, it names both required and addressable implementation specifications. Required specifications must be adopted and administered as dictated by the Rule. Addressable specifications are more flexible. Individual covered entities can evaluate their own situation and determine the best way to implement addressable specifications. Some privacy advocates have argued that this "flexibility" may provide too much latitude to covered entities.<br>
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'''The standards and specifications are as follows:'''<br>
'''The standards and specifications are as follows:'''<br>
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* '''Administrative Safeguards:''' Policies and procedures designed to clearly show how the entity will comply with the act.
* '''''Administrative Safeguards''''' – policies and procedures designed to clearly show how the entity will comply with the act
** Covered entities (entities that must comply with HIPAA requirements) must adopt a written set of privacy procedures and designate a privacy officer to be responsible for developing and implementing all required policies and procedures.
** Covered entities (entities that must comply with HIPAA requirements) must adopt a written set of privacy procedures and designate a privacy officer to be responsible for developing and implementing all required policies and procedures.
** The policies and procedures must reference management oversight and organizational buy-in to compliance with the documented security controls.
** The policies and procedures must reference management oversight and organizational buy-in to compliance with the documented security controls.
** Procedures should clearly identify employees or classes of employees who will have access to electronic protected health information (EPHI). Access to EPHI  must be restricted to only those employees who have a need for it to complete their job function.
** Procedures should clearly identify employees or classes of employees who will have access to electronic protected health information (EPHI). Access to EPHI  must be restricted to only those employees who have a need for it to complete their job function.
** The procedures must address access authorization, establishment, modification, and termination.
** The procedures must address access authorization, establishment, modification, and termination.
** Entities must show that an appropriate ongoing training program regarding the handling of PHI is provided to employees performing health plan administrative functions.
** Entities must show that an appropriate ongoing training program regarding the handling of PHI is provided to employees performing health plan administrative functions.
** Covered entities that out-source some of their business processes to a third party must ensure that their vendors also have a framework in place to comply with HIPAA requirements. Companies typically gain this assurance through clauses in the contracts stating that the vendor will meet the same data protection requirements that apply to the covered entity. Care must be taken to determine if the vendor further out-sources any data handling functions to other vendors and monitor whether appropriate contracts and controls are in place.
** Covered entities that out-source some of their business processes to a third party must ensure that their vendors also have a framework in place to comply with HIPAA requirements. Companies typically gain this assurance through clauses in the contracts stating that the vendor will meet the same data protection requirements that apply to the covered entity. Care must be taken to determine if the vendor further out-sources any data handling functions to other vendors and monitor whether appropriate contracts and controls are in place.
** A contingency plan should be in place for responding to emergencies. Covered entities are responsible for backing up their data and having disaster recovery procedures in place. The plan should document data priority and failure analysis, testing activities, and change control procedures.
** A contingency plan should be in place for responding to emergencies. Covered entities are responsible for backing up their data and having disaster recovery procedures in place. The plan should document data priority and failure analysis, testing activities, and change control procedures.
** Internal audits play a key role in HIPAA compliance by reviewing operations with the goal of identifying potential security violations.  Policies and procedures should specifically document the scope, frequency, and procedures of audits. Audits should be both routine and event-based.
** Internal audits play a key role in HIPAA compliance by reviewing operations with the goal of identifying potential security violations.  Policies and procedures should specifically document the scope, frequency, and procedures of audits. Audits should be both routine and event-based.
** Procedures should document instructions for addressing and responding to security breaches that are identified either during the audit or the normal course of operations.<br>
** Procedures should document instructions for addressing and responding to security breaches that are identified either during the audit or the normal course of operations.<br>
<br>
<br>
* '''Physical Safeguards:''' Controlling physical access to protect against inappropriate access to protected data.
* '''''Physical Safeguards''''' – controlling physical access to protect against inappropriate access to protected data
** Controls must govern the introduction and removal of hardware and software from the network. (When equipment is retired it must be disposed of properly to ensure that PHI is not compromised.)
** Controls must govern the introduction and removal of hardware and software from the network. (When equipment is retired it must be disposed of properly to ensure that PHI is not compromised.)
** Access to equipment containing health information should be carefully controlled and monitored.
** Access to equipment containing health information should be carefully controlled and monitored.
** Access to hardware and software must be limited to properly authorized individuals.
** Access to hardware and software must be limited to properly authorized individuals.
** Required access controls consist of facility security plans, maintenance records, and visitor sign-in and escorts.
** Required access controls consist of facility security plans, maintenance records, and visitor sign-in and escorts.
** Policies are required to address proper workstation use. Workstations should be removed from high traffic areas and monitor screens should not be in direct view of the public.
** Policies are required to address proper workstation use. Workstations should be removed from high traffic areas and monitor screens should not be in direct view of the public.
** If the covered entities utilize contractors or agents, they too must be fully trained on their physical access responsibilities.<br>
** If the covered entities utilize contractors or agents, they too must be fully trained on their physical access responsibilities.<br>
<br>
<br>
* '''Technical Safeguards:''' Controlling access to computer systems and enabling covered entities to protect communications containing PHI transmitted electronically over open networks from being intercepted by anyone other than the intended recipient.
* '''''Technical Safeguards''''' – controlling access to computer systems and enabling covered entities to protect communications containing PHI transmitted electronically over open networks from being intercepted by anyone other than the intended recipient.
** Information systems housing PHI must be protected from intrusion. When information flows over open networks, some form of encryption must be utilized. If closed systems and or networks are utilized, existing access controls are considered sufficient and encryption is optional.
** Information systems housing PHI must be protected from intrusion. When information flows over open networks, some form of encryption must be utilized. If closed systems/networks are utilized, existing access controls are considered sufficient and encryption is optional.
** Each covered entity is responsible for ensuring that the data within its systems has not been changed or erased in an unauthorized manner.
** Each covered entity is responsible for ensuring that the data within its systems has not been changed or erased in an unauthorized manner.
** Data corroboration, including the use of check sum, double-keying, message authentication, and digital signature may be used to ensure data integrity.
** Data corroboration, including the use of check sum, double-keying, message authentication, and digital signature may be used to ensure data integrity.
** Covered entities must also authenticate entities it communicates with. Authentication consists of corroborating that an entity is who it claims to be. Examples of corroboration include: password systems, two or three-way handshakes, telephone callback, and token systems.  
** Covered entities must also authenticate entities with which they communicate. Authentication consists of corroborating that an entity is who it claims to be. Examples of corroboration include: password systems, two or three-way handshakes, telephone callback, and token systems.
** Covered entities must make documentation of their HIPAA practices available to the government to determine compliance.  
** Covered entities must make documentation of their HIPAA practices available to the government to determine compliance.
** In addition to policies and procedures and access records, information technology documentation should also include a written record of all configuration settings on the components of the network because these components are complex, configurable, and always changing.
** In addition to policies and procedures and access records, information technology documentation should also include a written record of all configuration settings on the components of the network because these components are complex, configurable, and always changing.
** Documented risk analysis and risk management programs are required. Covered entities must carefully consider the risks of their operations as they implement systems to comply with the act. (The requirement of risk analysis and risk management implies that the act’s security requirements are a minimum standard and places responsibility on covered entities to take all reasonable precautions necessary to prevent PHI from being used for non-health purposes.)
** Documented risk analysis and risk management programs are required. Covered entities must carefully consider the risks of their operations as they implement systems to comply with the act. (The requirement of risk analysis and risk management implies that the act’s security requirements are a minimum standard and places responsibility on covered entities to take all reasonable precautions necessary to prevent PHI from being used for non-health purposes.)<br>
<br>
'''A great resource that is freely available from the good folks at [http://michaelpeters.org/ MichaelPeters.org] is the audit resource for implementing the [http://michaelpeters.org/resource-implementing-health-insurance-portability-accountability-act-hipaa-security-rule/ Health Insurance Portability and Accountability Act (HIPAA) Security Rule]. The audit framework is available for purchase to implement it in your own environment or you can utilize it freely on their site.'''


===Identifier Standard Rule===
=== Unique Identifiers Rule (National Provider Identifier) ===
It is this standardization -- along with the introduction of uniform transaction formats for electronice data interchange (EDI) -- that is expected to yield the efficiency savings of "administrative simplification."
HIPAA covered entities such as providers completing electronic transactions, healthcare clearinghouses, and large health plans, must use only the National Provider Identifier (NPI) to identify covered healthcare providers in standard transactions by May 23, 2007. Small health plans must use only the NPI by May 23, 2008.<br>
<br>
Effective from May 2006 (May 2007 for small health plans), all covered entities using electronic communications (e.g., physicians, hospitals, health insurance companies, and so forth) must use a single new NPI. The NPI replaces all other identifiers used by health plans, Medicare, Medicaid, and other government programs. However, the NPI does not replace a provider's DEA number, state license number, or tax identification number. The NPI is 10 digits (may be alphanumeric), with the last digit being a checksum. The NPI cannot contain any embedded intelligence; in other words, the NPI is simply a number that does not itself have any additional meaning. The NPI is unique and national, never re-used, and except for institutions, a provider usually can have only one. An institution may obtain multiple NPIs for different "subparts" such as a free-standing cancer center or rehab facility.


===The Enforcement Rule===
===Enforcement Rule===
On February 16, 2006, HHS issued the Final Rule regarding HIPAA enforcement.  It became effective on March 16, 2006. The Enforcement Rule sets civil money penalties for violating HIPAA rules and establishes procedures for investigations and hearings for HIPAA violations, however its deterrent effects seems to be negligible with few prosecutions for violations. [http://www.washingtonpost.com/wp-dyn/content/article/2006/06/04/AR2006060400672.html washingtonpost.com]<br>
On February 16, 2006, HHS issued the Final Rule regarding HIPAA enforcement.  It became effective on March 16, 2006. The Enforcement Rule sets civil money penalties for violating HIPAA rules and establishes procedures for investigations and hearings for HIPAA violations; however, its deterrent effects seem to be negligible with few prosecutions for violations.<br>
<br>
<br>
HIPAA includes substantial civil and criminal penalties for violations of its provisions, ranging from $100 per violation up to $250,000 and 10 years in prison. The harshest penalties attend deliberate misuse, particularly for sale or use of information for personal gain, commercial advantage or malicious harm.<br>
 
==HITECH Act: Privacy Requirements==
Subtitle D of the Health Information Technology for Economic and Clinical Health Act (HITECH Act), enacted as part of the American Recovery and Reinvestment Act of 2009, addresses the privacy and security concerns associated with the electronic transmission of health information.<br>
<br>
This subtitle extends the complete Privacy and Security Provisions of HIPAA to business associates of covered entities. This includes the extension of newly updated civil and criminal penalties to business associates. These changes are also required to be included in any business associate agreements with covered entities. On November 30, 2009, the regulations associated with the new enhancements to HIPAA enforcement took effect.<br>
<br>
Another significant change brought about in Subtitle D of the HITECH Act, is the new breach notification requirements. This imposes new notification requirements on covered entities, business associates, vendors of personal health records (PHR) and related entities if a breach of unsecured protected health information (PHI) occurs. On April 27, 2009, the Department of Health and Human Services (HHS) issued guidance on how to secure protected health information appropriately. Both HHS and the Federal Trade Commission (FTC) were required under the HITECH Act to issue regulations associated with the new breach notification requirements. The HHS rule was published in the Federal Register on August 24, 2009, and the FTC rule was published on August 25, 2009.<br>
<br>
The final significant change made in Subtitle D of the HITECH Act, implements new rules for the accounting of disclosures of a patient's health information. It extends the current accounting for disclosure requirements to information that is used to carry out treatment, payment and health care operations when an organization is using an electronic health record (EHR). This new requirement also limits the timeframe for the accounting to three years instead of six as it currently stands. These changes won't take effect until January 1, 2011, for organizations implementing EHRs between January 1, 2009 and January 1, 2011, and January 1, 2013, for organizations who had implemented an EHR prior to January 1, 2009.<br>
<br>
[[http://lazarusalliance.com/horsewiki/index.php/HITECH Read more in depth detail into the HITECH Act here:]]
 
==Effects on research and clinical care==
The enactment of the Privacy and Security Rules has caused major changes in the way physicians and medical centers operate. The complex legalities and potentially stiff penalties associated with HIPAA, as well as the increase in paperwork and the cost of its implementation, were causes for concern among physicians and medical centers. An August 2006 article in the journal ''Annals of Internal Medicine'' detailed some such concerns over the implementation and effects of HIPAA.<br>
<br>
<br>
An individual who believes that the Privacy Rule is not being upheld can file a complaint with the United States Department of Health and Human Services Office for Civil Rights (OCR). [http://www.hhs.gov/ocr/privacyhowtofile.htm  How to File A Health Information Privacy Complaint with the Office for Civil Rights]


===Costs of Implementation===
===Effects on research===
In the period immediately prior to the enactment of the HIPAA Privacy and Security Acts, medical centers and medical practices were charged with getting "into compliance". With an early emphasis on the potentially severe penalties associated with violation, many practices and centers turned to private, for-profit "HIPAA consultants" who were intimately familiar with the details of the legislation and offered their services to ensure that physicians and medical centers were fully "in compliance". In addition to the costs of developing and revamping systems and practices, the increase in paperwork and staff time necessary to meet the legal requirements of HIPAA may impact the finances of medical centers and practices at a time when insurance company and Medicare reimbursement is also declining.
HIPAA restrictions on researchers have affected their ability to perform retrospective, chart-based research as well as their ability to prospectively evaluate patients by contacting them for follow-up. A study from the University of Michigan demonstrated that implementation of the HIPAA Privacy rule resulted in a drop from 96% to 34% in the proportion of follow-up surveys completed by study patients being followed after a myocardial infarction. Another study, detailing the effects of HIPAA on recruitment for a study on cancer prevention, demonstrated that HIPAA-mandated changes led to a 73% decrease in patient accrual, a tripling of time spent recruiting patients, and a tripling of mean recruitment costs.<br>
<br>
In addition, informed consent forms for research studies now are required to include extensive detail on how the participant's protected health information will be kept private. While such information is important, the addition of a lengthy, legalistic section on privacy may make these already complex documents even less user-friendly for patients who are asked to read and sign them.<br>
<br>
These data suggest that the HIPAA privacy rule, as currently implemented, may be having negative impacts on the cost and quality of medical research. Dr. Kim Eagle, professor of internal medicine at the University of Michigan, was quoted in the ''Annals'' article as saying, "Privacy is important, but research is also important for improving care. We hope that we will figure this out and do it right."<br>
<br>


===Effects on clinical care===
The complexity of HIPAA, combined with potentially stiff penalties for violators, can lead physicians and medical centers to withhold information from those who may have a right to it. A review of the implementation of the HIPAA Privacy Rule by the U.S. Government Accountability Office found that health care providers were "uncertain about their legal privacy responsibilities and often responded with an overly guarded approach to disclosing information...than necessary to ensure compliance with the Privacy rule". Reports of this uncertainty continue.<br>
<br>


===Costs of implementation===
In the period immediately prior to the enactment of the HIPAA Privacy and Security Acts, medical centers and medical practices were charged with getting "into compliance". With an early emphasis on the potentially severe penalties associated with violation, many practices and centers turned to private, for-profit "HIPAA consultants" who were intimately familiar with the details of the legislation and offered their services to ensure that physicians and medical centers were fully "in compliance". In addition to the costs of developing and revamping systems and practices, the increase in paperwork and staff time necessary to meet the legal requirements of HIPAA may impact the finances of medical centers and practices at a time when insurance companies and Medicare reimbursement is also declining.<br>
<br>


==External References==
==HIPAA and drug and alcohol rehabilitation organizations==
* [http://www.cms.hhs.gov/hipaa/ Centers for Medicare and Medicaid Services - HIPAA Page]
Special considerations for confidentiality are needed for health care organizations that offer federally-funded drug or alcohol rehabilitation services.<br>
* [http://www.hhs.gov/ocr/hipaa/ Office for Civil Rights page on HIPAA]
<br>
* [http://www.legalarchiver.org/hipaa.htm Full text of the Health Insurance Portability and Accountability Act]
Predating HIPAA by over a quarter century are the '''Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970''' and language amended by the '''Drug Abuse Office and Treatment Act of 1972'''.<br>
* [http://www.hhs.gov/ocr/hipaa/FinalEnforcementRule06.pdf Full text of the Final HIPAA Enforcement Rule]
<br>
* [http://www.ohi.ca.gov/state/calohi/ohiHome.jsp California Office of HIPAA Implementation] CalOHI Burt R. Cohen, Director.
* [http://digital.library.unt.edu/govdocs/crs/search.tkl?q=hipaa&search_crit=title&search=Search&date1=Anytime&date2=Anytime&type=form Congressional Research Service (CRS) Reports regarding HIPAA] from University of North Texas Libraries
* [http://www.hipaa.org/hints/ HIPAA Helpful Hints: Transaction Implementation Assistance from the Experts]


==See Also==
==Legislative information==
* United States Department of Health and Human Services (HHS) Security Standards; Final Rule: 45 CFR Parts 160, 162, and 164
* HHS Standards for Privacy of Individually Identifiable Health Information; Final Rule: 45 CFR Parts 160 and 164
* Law: [http://www.gpo.gov/fdsys/pkg/PLAW-104publ191/pdf/PLAW-104publ191.pdf Pub. L. 104-191], 110 Stat. 1936
* United States House of Representatives: 104 H.R. 3103, H. Rept. 104-469, Pt. 1, H. Rept. 104-736
* United States House of Representatives: 104 H.R. 3103, H. Rept. 104-469, Pt. 1, H. Rept. 104-736
* United States Senate: 104 S. 1028, 104 S. 1698, S. Rept. 104-156
* United States Senate: 104 S. 1028, 104 S. 1698, S. Rept. 104-156
* Law: Pub. L. 104-191, 110 Stat. 1936
* HHS Standards for Privacy of Individually Identifiable Health Information; 45 CFR 160.103, 45 CFR 164.501
* HHS Security Standards; Final Rule: 45 CFR Parts 160, 162, and 164
* [[ISO TC 215]]
* [[Directive 95/46/EC on the protection of personal data]] (EU)
* [[European Institute for Health Records]] (EU)
* [[TC 251|CEN/TC 251]] (EU)
* [[Information technology audit]]


==External links==
* [http://www.ohi.ca.gov/calohi/ California Office of HIPAA Implementation] (CalOHI)
* [http://www.cms.hhs.gov/HIPAAGenInfo/ "HIPAA"], Centers for Medicare and Medicaid Services
* [http://digital.library.unt.edu/govdocs/crs/search/?q=hipaa&t=fulltext Congressional Research Service (CRS) reports regarding HIPAA], University of North Texas Libraries
* [http://www.gpo.gov/fdsys/search/pagedetails.action?granuleId=CRPT-104hrpt736&packageId=CRPT-104hrpt736 Full text of the Health Insurance Portability and Accountability Act (PDF/TXT)] U.S. Government Printing Office
* [http://www.legalarchiver.org/hipaa.htm Full text of the Health Insurance Portability and Accountability Act (HTM)] Legal Archiver
* [http://www.hhs.gov/ocr/hipaa/ Office for Civil Rights page on HIPAA]
* [http://www.hipaa.com/ HIPAA documentation, resources and commentary]


[[Category:Privacy]]
[[Category:Privacy law]]
[[Category:Data privacy]]
[[Category:Data privacy]]
[[Category:Security compliance]]

Latest revision as of 19:36, 29 November 2013

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 (P.L.104-191) [HIPAA] was enacted by the U.S. Congress and signed by President Bill Clinton in 1996. It was originally sponsored by Sen. Ted Kennedy and Sen. Nancy Kassebaum. Title I of HIPAA protects health insurance in the United States coverage for workers and their families when they change or lose their jobs. Title II of HIPAA, known as the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.

The Administration Simplification provisions also address the security and privacy of health data. The standards are meant to improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of electronic data interchange in the U.S. health care system.

A great resource that is freely available from the good folks at MichaelPeters.org is the audit resource for implementing the Health Insurance Portability and Accountability Act (HIPAA) Security Rule. The audit framework is available for purchase to implement it in your own environment or you can utilize it freely on their site.

Title I: Health Care Access, Portability, and Renewability

Title I of HIPAA regulates the availability and breadth of group health plans and certain individual health insurance policies. It amended the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code.

Title I also limits restrictions that a group health plan can place on benefits for preexisting conditions. Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment. However, individuals may reduce this exclusion period if they had group health plan coverage or health insurance prior to enrolling in the plan. Title I allows individuals to reduce the exclusion period by the amount of time that they had "creditable coverage" prior to enrolling in the plan and after any "significant breaks" in coverage. "Creditable coverage" is defined quite broadly and includes nearly all group and individual health plans, Medicare, and Medicaid. A "significant break" in coverage is defined as any 63 day period without any creditable coverage.

Some health care plans are exempted from Title I requirements, such as long-term health plans and limited-scope plans such as dental or vision plans that are offered separately from the general health plan. However, if such benefits are part of the general health plan, then HIPAA still applies to such benefits. For example, if the new plan offers dental benefits, then it must count creditable continuous coverage under the old health plan towards any of its exclusion periods for dental benefits.

An alternate method of calculating creditable continuous coverage is available to the health plan under Title I. That is, 5 categories of health coverage can be considered separately, including dental and vision coverage. Anything not under those 5 categories must use the general calculation (e.g., the beneficiary may be counted with 18 months of general coverage, but only 6 months of dental coverage, because the beneficiary did not have a general health plan that covered dental until 6 months prior to the application date). Since limited-coverage plans are exempt from HIPAA requirements, the odd case exists in which the applicant to a general group health plan cannot obtain certificates of creditable continuous coverage for independent limited-scope plans such as dental to apply towards exclusion periods of the new plan that does include those coverages.

Hidden exclusion periods are not valid under Title I (e.g., "The accident, to be covered, must have occurred while the beneficiary was covered under this exact same health insurance contract"). Such clauses must not be acted upon by the health plan and also must be re-written so that they comply with HIPAA.

To illustrate, suppose someone enrolls in a group health plan on January 1, 2006. This person had previously been insured from January 1, 2004 until February 1, 2005 and from August 1, 2005 until December 31, 2005. To determine how much coverage can be credited against the exclusion period in the new plan, start at the enrollment date and count backwards until you reach a significant break in coverage. So, the five months of coverage between August 1, 2005 and December 31, 2005 clearly counts against the exclusion period. But the period without insurance between February 1, 2005 and August 1, 2005 is greater than 63 days. Thus, this is a significant break in coverage, and any coverage prior to it cannot be deducted from the exclusion period. So, this person could deduct five months from his or her exclusion period, reducing the exclusion period to seven months. Hence, Title I requires that any preexisting condition begin to be covered on August 1, 2006.

Title II: Preventing Health Care Fraud and Abuse; Administrative Simplification; Medical Liability Reform

Title II of HIPAA defines numerous offenses relating to health care and sets civil and criminal penalties for them. It also creates several programs to control fraud and abuse within the health care system. However, the most significant provisions of Title II are its Administrative Simplification rules. Title II requires the Department of Health and Human Services (HHS) to draft rules aimed at increasing the efficiency of the health care system by creating standards for the use and dissemination of health care information.

These rules apply to "covered entities" as defined by HIPAA and the HHS. Covered entities include health plans, health care clearinghouses, such as billing services and community health information systems, and health care providers that transmit health care data in a way that is regulated by HIPAA.

Per the requirements of Title II, the HHS has promulgated five rules regarding Administrative Simplification: the Privacy Rule, the Transactions and Code Sets Rule, the Security Rule, the Unique Identifiers Rule, and the Enforcement Rule.

Privacy Rule

The effective compliance date of the Privacy Rule was April 14, 2003 with a one-year extension for certain "small plans". The HIPAA Privacy Rule regulates the use and disclosure of certain information held by "covered entities" (generally, health care clearinghouses, employer sponsored health plans, health insurers, and medical service providers that engage in certain transactions.) It establishes regulations for the use and disclosure of Protected Health Information (PHI). PHI is any information held by a covered entity which concerns health status, provision of health care, or payment for health care that can be linked to an individual. This is interpreted rather broadly and includes any part of an individual's medical record or payment history.

Covered entities must disclose PHI to the individual within 30 days upon request. They also must disclose PHI when required to do so by law, such as reporting suspected child abuse to state child welfare agencies.

A covered entity may disclose PHI to facilitate treatment, payment, or health care operations, or if the covered entity has obtained authorization from the individual. However, when a covered entity discloses any PHI, it must make a reasonable effort to disclose only the minimum necessary information required to achieve its purpose.

The Privacy Rule gives individuals the right to request that a covered entity correct any inaccurate PHI. It also requires covered entities to take reasonable steps to ensure the confidentiality of communications with individuals. For example, an individual can ask to be called at his or her work number, instead of home or cell phone number.

The Privacy Rule requires covered entities to notify individuals of uses of their PHI. Covered entities must also keep track of disclosures of PHI and document privacy policies and procedures. They must appoint a Privacy Official and a contact person responsible for receiving complaints and train all members of their workforce in procedures regarding PHI.

An individual who believes that the Privacy Rule is not being upheld can file a complaint with the United States Department of Health and Human Services Office for Civil Rights (OCR).

However, according to the Wall Street Journal, the OCR has a long backlog and ignores most complaints. "Complaints of privacy violations have been piling up at the Department of Health and Human Services. Between April of 2003 and November of 2006, the agency fielded 23,886 complaints related to medical-privacy rules, but it has not yet taken any enforcement actions against hospitals, doctors, insurers or anyone else for rule violations. A spokesman for the agency says it has closed three-quarters of the complaints, typically because it found no violation or after it provided informal guidance to the parties involved." However, in July of 2011, UCLA agreed to pay $865,500 in a settlement regarding potential HIPAA violations. An HHS Office for Civil Rights investigation showed from 2005 to 2008 unauthorized employees, repeatedly and without legitimate cause, looked at the electronic protected health information of numerous UCLAHS patients.

Transactions and Code Sets Rule

The HIPAA/EDI provision was scheduled to take effect from October 16, 2003 with a one-year extension for certain "small plans". However, due to widespread confusion and difficulty in implementing the rule, CMS granted a one-year extension to all parties. On January 1, 2012 the newest version 5010 becomes effective, replacing the version 4010. This allows for the larger field size of ICD-10-CM as well as other improvements.

After July 1, 2005 most medical providers that file electronically did have to file their electronic claims using the HIPAA standards in order to be paid.

Key EDI(X12) transactions used for HIPAA compliance are:

EDI Health Care Claim Transaction set (837) is used to submit health care claim billing information, encounter information, or both, except for retail pharmacy claims (see EDI Retail Pharmacy Claim Transaction). It can be sent from providers of health care services to payers, either directly or via intermediary billers and claims clearinghouses. It can also be used to transmit health care claims and billing payment information between payers with different payment responsibilities where coordination of benefits is required or between payers and regulatory agencies to monitor the rendering, billing, and/or payment of health care services within a specific health care/insurance industry segment.

For example, a state mental health agency may mandate all healthcare claims, Providers and health plans who trade professional (medical) health care claims electronically must use the 837 Health Care Claim: Professional standard to send in claims. As there are many different business applications for the Health Care claim, there can be slight derivations to cover off claims involving unique claims such as for Institutions, Professionals, Chiropractors, and Dentists etc.

EDI Retail Pharmacy Claim Transaction (NCPDP Telecommunications Standard version 5.1) is used to submit retail pharmacy claims to payers by health care professionals who dispense medications, either directly or via intermediary billers and claims clearinghouses. It can also be used to transmit claims for retail pharmacy services and billing payment information between payers with different payment responsibilities where coordination of benefits is required or between payers and regulatory agencies to monitor the rendering, billing, and/or payment of retail pharmacy services within the pharmacy health care/insurance industry segment.

EDI Health Care Claim Payment/Advice Transaction Set (835) can be used to make a payment, send an Explanation of Benefits (EOB), send an Explanation of Payments (EOP) remittance advice, or make a payment and send an EOP remittance advice only from a health insurer to a health care provider either directly or via a financial institution.

EDI Benefit Enrollment and Maintenance Set (834) can be used by employers, unions, government agencies, associations or insurance agencies to enroll members to a payer. The payer is a healthcare organization that pays claims, administers insurance or benefit or product. Examples of payers include an insurance company, health care professional (HMO), preferred provider organization (PPO), government agency (Medicaid, Medicare etc.) or any organization that may be contracted by one of these former groups.

EDI Payroll Deducted and other group Premium Payment for Insurance Products (820) is a transaction set which can be used to make a premium payment for insurance products. It can be used to order a financial institution to make a payment to a payee.

EDI Health Care Eligibility/Benefit Inquiry (270) is used to inquire about the health care benefits and eligibility associated with a subscriber or dependent.

EDI Health Care Eligibility/Benefit Response (271) is used to respond to a request inquire about the health care benefits and eligibility associated with a subscriber or dependent.

EDI Health Care Claim Status Request (276) This transaction set can be used by a provider, recipient of health care products or services or their authorized agent to request the status of a health care claim.

EDI Health Care Claim Status Notification (277) This transaction set can be used by a health care payer or authorized agent to notify a provider, recipient or authorized agent regarding the status of a health care claim or encounter, or to request additional information from the provider regarding a health care claim or encounter. This transaction set is not intended to replace the Health Care Claim Payment/Advice Transaction Set (835) and therefore, is not used for account payment posting. The notification is at a summary or service line detail level. The notification may be solicited or unsolicited.

EDI Health Care Service Review Information (278) This transaction set can be used to transmit health care service information, such as subscriber, patient, demographic, diagnosis or treatment data for the purpose of request for review, certification, notification or reporting the outcome of a health care services review.

EDI Functional Acknowledgement Transaction Set (997) this transaction set can be used to define the control structures for a set of acknowledgments to indicate the results of the syntactical analysis of the electronically encoded documents. Although it is not specifically named in the HIPAA Legislation or Final Rule, it is necessary for X12 transaction set processing . The encoded documents are the transaction sets, which are grouped in functional groups, used in defining transactions for business data interchange. This standard does not cover the semantic meaning of the information encoded in the transaction sets.

Security Rule

The Final Rule on Security Standards was issued on February 20, 2003. It took effect on April 21, 2003 with a compliance date of April 21, 2005 for most covered entities and April 21, 2006 for "small plans". The Security Rule complements the Privacy Rule. While the Privacy Rule pertains to all Protected Health Information (PHI) including paper and electronic, the Security Rule deals specifically with Electronic Protected Health Information (EPHI). It lays out three types of security safeguards required for compliance: administrative, physical, and technical. For each of these types, the Rule identifies various security standards, and for each standard, it names both required and addressable implementation specifications. Required specifications must be adopted and administered as dictated by the Rule. Addressable specifications are more flexible. Individual covered entities can evaluate their own situation and determine the best way to implement addressable specifications. Some privacy advocates have argued that this "flexibility" may provide too much latitude to covered entities.

The standards and specifications are as follows:

  • Administrative Safeguards – policies and procedures designed to clearly show how the entity will comply with the act
    • Covered entities (entities that must comply with HIPAA requirements) must adopt a written set of privacy procedures and designate a privacy officer to be responsible for developing and implementing all required policies and procedures.
    • The policies and procedures must reference management oversight and organizational buy-in to compliance with the documented security controls.
    • Procedures should clearly identify employees or classes of employees who will have access to electronic protected health information (EPHI). Access to EPHI must be restricted to only those employees who have a need for it to complete their job function.
    • The procedures must address access authorization, establishment, modification, and termination.
    • Entities must show that an appropriate ongoing training program regarding the handling of PHI is provided to employees performing health plan administrative functions.
    • Covered entities that out-source some of their business processes to a third party must ensure that their vendors also have a framework in place to comply with HIPAA requirements. Companies typically gain this assurance through clauses in the contracts stating that the vendor will meet the same data protection requirements that apply to the covered entity. Care must be taken to determine if the vendor further out-sources any data handling functions to other vendors and monitor whether appropriate contracts and controls are in place.
    • A contingency plan should be in place for responding to emergencies. Covered entities are responsible for backing up their data and having disaster recovery procedures in place. The plan should document data priority and failure analysis, testing activities, and change control procedures.
    • Internal audits play a key role in HIPAA compliance by reviewing operations with the goal of identifying potential security violations. Policies and procedures should specifically document the scope, frequency, and procedures of audits. Audits should be both routine and event-based.
    • Procedures should document instructions for addressing and responding to security breaches that are identified either during the audit or the normal course of operations.


  • Physical Safeguards – controlling physical access to protect against inappropriate access to protected data
    • Controls must govern the introduction and removal of hardware and software from the network. (When equipment is retired it must be disposed of properly to ensure that PHI is not compromised.)
    • Access to equipment containing health information should be carefully controlled and monitored.
    • Access to hardware and software must be limited to properly authorized individuals.
    • Required access controls consist of facility security plans, maintenance records, and visitor sign-in and escorts.
    • Policies are required to address proper workstation use. Workstations should be removed from high traffic areas and monitor screens should not be in direct view of the public.
    • If the covered entities utilize contractors or agents, they too must be fully trained on their physical access responsibilities.


  • Technical Safeguards – controlling access to computer systems and enabling covered entities to protect communications containing PHI transmitted electronically over open networks from being intercepted by anyone other than the intended recipient.
    • Information systems housing PHI must be protected from intrusion. When information flows over open networks, some form of encryption must be utilized. If closed systems/networks are utilized, existing access controls are considered sufficient and encryption is optional.
    • Each covered entity is responsible for ensuring that the data within its systems has not been changed or erased in an unauthorized manner.
    • Data corroboration, including the use of check sum, double-keying, message authentication, and digital signature may be used to ensure data integrity.
    • Covered entities must also authenticate entities with which they communicate. Authentication consists of corroborating that an entity is who it claims to be. Examples of corroboration include: password systems, two or three-way handshakes, telephone callback, and token systems.
    • Covered entities must make documentation of their HIPAA practices available to the government to determine compliance.
    • In addition to policies and procedures and access records, information technology documentation should also include a written record of all configuration settings on the components of the network because these components are complex, configurable, and always changing.
    • Documented risk analysis and risk management programs are required. Covered entities must carefully consider the risks of their operations as they implement systems to comply with the act. (The requirement of risk analysis and risk management implies that the act’s security requirements are a minimum standard and places responsibility on covered entities to take all reasonable precautions necessary to prevent PHI from being used for non-health purposes.)


A great resource that is freely available from the good folks at MichaelPeters.org is the audit resource for implementing the Health Insurance Portability and Accountability Act (HIPAA) Security Rule. The audit framework is available for purchase to implement it in your own environment or you can utilize it freely on their site.

Unique Identifiers Rule (National Provider Identifier)

HIPAA covered entities such as providers completing electronic transactions, healthcare clearinghouses, and large health plans, must use only the National Provider Identifier (NPI) to identify covered healthcare providers in standard transactions by May 23, 2007. Small health plans must use only the NPI by May 23, 2008.

Effective from May 2006 (May 2007 for small health plans), all covered entities using electronic communications (e.g., physicians, hospitals, health insurance companies, and so forth) must use a single new NPI. The NPI replaces all other identifiers used by health plans, Medicare, Medicaid, and other government programs. However, the NPI does not replace a provider's DEA number, state license number, or tax identification number. The NPI is 10 digits (may be alphanumeric), with the last digit being a checksum. The NPI cannot contain any embedded intelligence; in other words, the NPI is simply a number that does not itself have any additional meaning. The NPI is unique and national, never re-used, and except for institutions, a provider usually can have only one. An institution may obtain multiple NPIs for different "subparts" such as a free-standing cancer center or rehab facility.

Enforcement Rule

On February 16, 2006, HHS issued the Final Rule regarding HIPAA enforcement. It became effective on March 16, 2006. The Enforcement Rule sets civil money penalties for violating HIPAA rules and establishes procedures for investigations and hearings for HIPAA violations; however, its deterrent effects seem to be negligible with few prosecutions for violations.

HITECH Act: Privacy Requirements

Subtitle D of the Health Information Technology for Economic and Clinical Health Act (HITECH Act), enacted as part of the American Recovery and Reinvestment Act of 2009, addresses the privacy and security concerns associated with the electronic transmission of health information.

This subtitle extends the complete Privacy and Security Provisions of HIPAA to business associates of covered entities. This includes the extension of newly updated civil and criminal penalties to business associates. These changes are also required to be included in any business associate agreements with covered entities. On November 30, 2009, the regulations associated with the new enhancements to HIPAA enforcement took effect.

Another significant change brought about in Subtitle D of the HITECH Act, is the new breach notification requirements. This imposes new notification requirements on covered entities, business associates, vendors of personal health records (PHR) and related entities if a breach of unsecured protected health information (PHI) occurs. On April 27, 2009, the Department of Health and Human Services (HHS) issued guidance on how to secure protected health information appropriately. Both HHS and the Federal Trade Commission (FTC) were required under the HITECH Act to issue regulations associated with the new breach notification requirements. The HHS rule was published in the Federal Register on August 24, 2009, and the FTC rule was published on August 25, 2009.

The final significant change made in Subtitle D of the HITECH Act, implements new rules for the accounting of disclosures of a patient's health information. It extends the current accounting for disclosure requirements to information that is used to carry out treatment, payment and health care operations when an organization is using an electronic health record (EHR). This new requirement also limits the timeframe for the accounting to three years instead of six as it currently stands. These changes won't take effect until January 1, 2011, for organizations implementing EHRs between January 1, 2009 and January 1, 2011, and January 1, 2013, for organizations who had implemented an EHR prior to January 1, 2009.

[Read more in depth detail into the HITECH Act here:]

Effects on research and clinical care

The enactment of the Privacy and Security Rules has caused major changes in the way physicians and medical centers operate. The complex legalities and potentially stiff penalties associated with HIPAA, as well as the increase in paperwork and the cost of its implementation, were causes for concern among physicians and medical centers. An August 2006 article in the journal Annals of Internal Medicine detailed some such concerns over the implementation and effects of HIPAA.

Effects on research

HIPAA restrictions on researchers have affected their ability to perform retrospective, chart-based research as well as their ability to prospectively evaluate patients by contacting them for follow-up. A study from the University of Michigan demonstrated that implementation of the HIPAA Privacy rule resulted in a drop from 96% to 34% in the proportion of follow-up surveys completed by study patients being followed after a myocardial infarction. Another study, detailing the effects of HIPAA on recruitment for a study on cancer prevention, demonstrated that HIPAA-mandated changes led to a 73% decrease in patient accrual, a tripling of time spent recruiting patients, and a tripling of mean recruitment costs.

In addition, informed consent forms for research studies now are required to include extensive detail on how the participant's protected health information will be kept private. While such information is important, the addition of a lengthy, legalistic section on privacy may make these already complex documents even less user-friendly for patients who are asked to read and sign them.

These data suggest that the HIPAA privacy rule, as currently implemented, may be having negative impacts on the cost and quality of medical research. Dr. Kim Eagle, professor of internal medicine at the University of Michigan, was quoted in the Annals article as saying, "Privacy is important, but research is also important for improving care. We hope that we will figure this out and do it right."

Effects on clinical care

The complexity of HIPAA, combined with potentially stiff penalties for violators, can lead physicians and medical centers to withhold information from those who may have a right to it. A review of the implementation of the HIPAA Privacy Rule by the U.S. Government Accountability Office found that health care providers were "uncertain about their legal privacy responsibilities and often responded with an overly guarded approach to disclosing information...than necessary to ensure compliance with the Privacy rule". Reports of this uncertainty continue.

Costs of implementation

In the period immediately prior to the enactment of the HIPAA Privacy and Security Acts, medical centers and medical practices were charged with getting "into compliance". With an early emphasis on the potentially severe penalties associated with violation, many practices and centers turned to private, for-profit "HIPAA consultants" who were intimately familiar with the details of the legislation and offered their services to ensure that physicians and medical centers were fully "in compliance". In addition to the costs of developing and revamping systems and practices, the increase in paperwork and staff time necessary to meet the legal requirements of HIPAA may impact the finances of medical centers and practices at a time when insurance companies and Medicare reimbursement is also declining.

HIPAA and drug and alcohol rehabilitation organizations

Special considerations for confidentiality are needed for health care organizations that offer federally-funded drug or alcohol rehabilitation services.

Predating HIPAA by over a quarter century are the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 and language amended by the Drug Abuse Office and Treatment Act of 1972.

Legislative information

  • United States Department of Health and Human Services (HHS) Security Standards; Final Rule: 45 CFR Parts 160, 162, and 164
  • HHS Standards for Privacy of Individually Identifiable Health Information; Final Rule: 45 CFR Parts 160 and 164
  • Law: Pub. L. 104-191, 110 Stat. 1936
  • United States House of Representatives: 104 H.R. 3103, H. Rept. 104-469, Pt. 1, H. Rept. 104-736
  • United States Senate: 104 S. 1028, 104 S. 1698, S. Rept. 104-156

External links

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