Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA has led to sweeping changes to health care administration and information systems. HIPAA is a federal law that has been amended to the Internal Revenue Code of 1986 which intends to:

  • Improve portability and continuity of health insurance
  • Combat waste, fraud and abuse in health insurance and health care delivery.
  • Promote the use of medical savings accounts.
  • Improve access to long-term health care services and coverage.
  • Simplify the administration of health insurance.

The ultimate objective of HIPAA is to increase the efficiency and effectiveness of health information systems through improvements in electronic health care transactions as well as to maintain the security and privacy of individually identifiable health information.

Becoming HIPAA-compliant is more challenging because of extensive cross-departmental compliance and training requirements. HIPAA is an ongoing administration, privacy and security challenge that must be constantly addressed.

Who’s Impacted?

HIPAA’s standards directly apply to the following groups of health care entities:

  • Health Plans
  • Public and private payers
  • Health care insurers
  • HMOs
  • Medicare, Medicaid
  • Group health plans
  • Health Care Clearinghouses
  • Any entity that facilitates the processing of non-standard formatted health information and must convert the non-standard data into standard transactions, or vice versa.
  • Health Care Providers
  • Providers who transmit health information electronically.
  • Providers who receive individual health information.
  • Providers who electronically maintain health information used in electronic transmissions between entities.


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