What does HIPAA stand for and why is it important?

The relevance of HIPAA continues to grow as more and more business data moves online. It is critical that all entities that handle protected health information (PHI) meet HIPAA compliance. Not doing so puts yourself and your business at risk of financial penalties, and could result in criminal charges in extreme cases. So, what does HIPAA stand for and why is it so important? In this article we are going to cover the most important terms and the regulations and processes they represent. 

What is HIPAA?

HIPPA stands for the Health Insurance Portability and Accountability Act. It is a federal law that sets national standards for protecting sensitive patient information from being disclosed without the patient’s knowledge or consent. According to the U.S. Department of Health and Human Services (HHS), there are two components to HIPAA, the HIPAA Privacy Rule and the HIPAA Security Rule. The Privacy Rule applies to the general protection of health information, and the Security Rule applies specifically to the protection of personal health data that is held or transferred in electronic form. 

In order to meet HIPAA compliance, all companies dealing with protected health information (PHI) and electronically protected health information (ePHI) need to have physical, network, and process security measures in place that are always adhered to.

Covered Entities

Individuals and organizations that are subject to HIPAA requirements are known as covered entities. Covered entities include anyone providing treatment, managing operations in healthcare, or receiving payments—healthcare providers, health plans, and healthcare clearinghouses. Also included are any business associates, subcontractors or otherwise, who have access to patient information and provide support in treatment, operations, or payment. 

Why is HIPAA important

Why is HIPAA important in the medical field?

With so much data being handled online, from electronic health records (EHR) to computerized physician order entry (CPOE) to pharmacy and laboratory systems, HIPAA compliance should be top of mind for every healthcare business owner. Not complying with HIPAA can result in significant penalties to your business’s bottom line and reputation, and could lead to criminal charges.

HIPAA has also aided the medical field by helping with the transition from paper records to electronic records. It’s helped to improve efficiency in the industry, simplify administrative healthcare functions, and it makes the process of sharing protected health information quick and secure. All covered entities are required to use the same nationally recognized identifiers and code sets, so transferring electronic health information between health plans and health providers has never been easier or safer.

Why is HIPAA important to patients?

Patient security is the main goal of HIPAA; it’s designed to keep their personal data private. It mandates that all covered entities apply several different safeguards to protect a patient’s sensitive health information. Without HIPAA, healthcare organizations would be under no obligation to protect their patients’ private information and would suffer no penalties whatsoever if they let personal data slip through the cracks and fall into the wrong hands.

It also means that patients can obtain copies of their own health information if they wish to find a new healthcare provider. All of their information is protected, kept up to date, and belongs to them. If they decide to switch healthcare providers, no tests need to be repeated, and the new provider will have access to their entire medical history, enabling greater care.

Companies that aren’t covered by HIPAA rules

According to the U.S. Department of Health and Human Services (HHS), HIPAA does not give them “the authority to regulate employers, life insurance companies, or public agencies that deliver social security or welfare benefits.”

This means that HIPAA regulations do not apply to a patient’s workplace, their life insurance provider, or public agencies that deliver their social security or welfare benefits. 

Companies and organizations not covered by HIPAA:

• Life insurers
• Employers
• Workers’ compensation carriers
• Most schools and school districts
• Many state agencies, including child protective agencies
• Most law enforcement agencies
• Many municipal offices