What Is Covered Under HIPAA?

At one time, each health care insurance provider had their own patient privacy and billing code standards. When the Health Insurance Portability and Accountability Act of 1996 was passed, this started a procedure to make these policies uniform for all providers.

Function

• HIPAA was passed in 1996 to create a uniform set of standards for health care providers regarding the privacy of patient information. The bill also protects health insurance coverage for workers and their families when they change of lose their jobs.

Benefits

• HIPAA also required the establishment of standards for electronic health care transactions for providers, health insurance plans and employers. This is intended to reduce the amount of time spent researching the codes for each individual health care plan and thereby improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of electronic data interchange.

History

• HIPAA instructed Congress to provide patient information privacy laws within three years. That did not happen, therefore the Department of Health and Human Services was required to develop the privacy laws. The privacy rule took effect in 2003.

Features

• The standardization of coding created by the U.S. Department of Health and Human Services anticipates an annual savings of $29.9 billion over 10 years.

Who is Covered

• All health plans and health care clearinghouses, such as billing services, are covered under HIPAA. The HHS extended original deadlines, requiring that all providers follow the provisions of the act by April 14, 2004.