The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996 became law on August 21, 1996.
HIPAA is also known as:
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- Public Law 104-191 [H.R. 3103].
- The Kennedy-Kassebaum bill.
The U.S congress passed HIPAA to:
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- Improve Portability and continuity of health insurance coverage in the group and individual market.
- Combat waste, fraud, and abuse in health insurance and health care delivery.
- Promote the use of medical savings accounts.
- Improve access to long-term care services and coverage.
- Simplify the administration of health insurance.
HIPAA is about insurance portability, fraud, and administrative simplification.
HIPAA compliance starts with PHI but ends invariably by impacting business processes, communications and systems.
According to the Centers for Medicare and Medicaid Services (CMS) website,
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- Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs.
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- Title I includes provisions for certificates of coverage and portability of health insurance.
- Title I prohibits discrimination in enrollments and in premiums charged to employees and their dependents based on health status related factors. Its provisions primarily affect employers and health insurers and are currently in effect.
- Title I increases the ability to get health coverage when starting a new job
- helps workers maintain continuous health coverage when changing jobs.
- Limits the use of Pre-existing condition exclusions.
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- 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.
- This is intended to help people keep their information private, though in practice it is normal for providers and health insurance plans to require the waiver of HIPAA rights as a condition of service.
- 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.
- The Security Rule is in effect since April 2005 for large covered entities, and one year later for small ones. (See the HIPAA compliance calendar for details.) Its requirements are divided into administrative, physical and technical safeguards. These safeguard categories are further divided into standards and implementation specifications that provide instructions for putting in place the components of the three categories.
- Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs.
- Privacy Rule
The Privacy Rule took effect on 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.
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 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 2003 and Nov. 30, the agency fielded 23,896 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."
Transactions and Code Sets RuleThe 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. 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.
CMS announced that the Medicare contingency period ended July 1, 2005. After July 1, most medical providers that file electronically will have to file their electronic claims using the HIPAA standards in order to be paid. There are exceptions for doctors that meet certain criteria.
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 Health Care Claim Payment/Advice Transaction Set (835) can be used to make a payment, send an Explanation of Benefits (EOB) remittance advice, or make a payment and send an EOB 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.) on any organization that may be contracted by one of these former groups.
EDI Payroll Deducted and other group Premium Payment for Insurance Products (820) this transaction set 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.
Implementation Guide270/271Health Care Eligibility Benefit Inquiry and ResponseRequest and Response for Eligibility for a Health Plan276/277Health Care Claim Status Request and ResponseHealth Claim Status Inquiry and Response278Health Care Services Review-Request for Review and ResponseReferral Certification and Authorization820Payroll Deducted and Other Group Premium Payment for Insurance ProductsHealth Plan Premium Payments834Benefit Enrollment and MaintenanceEnrollment and Disenrollment in a Health Plan835Health Care Claim Payment/AdviceHealth Care Payment and Remittance Advice1. ASC X12N 837PProfessional Implementation Guide2. ASC X12N 837IInstitutional Implementation Guide3. ASC X12N 837DDental Implementation Guide4. NCPDPRetail pharmacy transactionTransactionStandard Electronic FormatImplementation GuideRequest and Response for Eligibility for a Health PlanDental, Professional Health, Institutional Health: ASC X12N 270/271 Version 4010 and 4010A1Health Care Eligibility Benefit Inquiry and ResponseRetail Pharmacy: NCPDP Telecommunication Version 5.1 and Batch Standard 1.1-Retail Pharmacy DrugsTelecommunication Standard Implementation GuideReferral Certification and AuthorizationDental, Professional Health, Institutional Health: ASC X12N 278 Version 4010 and 4010A1Health Care Services Review-Request for Review and ResponseRetail Pharmacy: NCPDP Telecommunication Version 5.1 and Batch Standard 1.1-Retail Pharmacy Drug Referral Certification and AuthorizationTelecommunication Standard Implementation GuideHealth Care Claims or Equivalent Encounter InformationDental, Professional Health, Institutional Health: ASC X12N 837 Version 4010 and 4010A1Health Care Claim: Dental, Health Care Claim: Professional, and Health Care Claim: InstitutionalRetail Pharmacy: NCPDP Telecommunication Version 5.1 and Batch Standard 1.1-Retail Pharmacy Drug ClaimsTelecommunication Standard Implementation GuideSecurity 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. The standards and specifications are as follows:
Administrative Safeguards – policies and procedures designed to clearly show how the entity will comply with the act
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- 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.
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Physical Safeguards – controlling physical access to protect against inappropriate access to protected data
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- Controls must govern the introduction and removal of hardware and software from the network.
- 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.
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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.
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- notice of proposed rule making (NPRMs),
- National Provider Identifier (NPI) and
- the National Employer Identifier (NEI) are below.
- 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 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 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.)
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- National Identifiers
HIPAA Administrative Simplification establishes four national and unique identifiers to be used in the health care system: providers, employers, health plans and individuals.Information regarding the two published :
National Provider Identifier (NPI): This rule proposes a standard for a national health care provider identifier and requirements concerning its use by health plans, health care clearinghouses, and health care providers. The health plans, health care clearinghouses, and health care providers would use the identifier, among other uses, in connection with certain electronic transactions.
In 1993, representatives from the private sector and federal and state agencies were invited to participate with the Health Care Financing Administration (HCFA), now know as the Centers for Medicare and Medicaid (CMS), to develop a provider identifier system to meet Medicare and Medicaid needs and ultimately a national identification system for all health care providers to meet the needs of other users and programs. This group adopted criteria developed by the Workgroup for Electronic Data Interchange (WEDI) and the American National Standards Institute (ANSI) that would be used to locate or develop a unique provider identifier. The group examined existing identifiers and concluded that no existing identifier met all the criteria that had been recommended by WEDI and ANSI. The group then designed a new identifier that would be in the public domain and incorporates the criteria recommended by WEDI and ANSI.
The proposed NPI is an 8-position alphanumeric identifier that includes as the 8th position a numeric check digit to assist in identifying erroneous or invalid NPIs. The check digit is a recognized International Standards Organization [ISO] standard. The check digit algorithm must be computed from an all-numeric base number. Therefore, any alpha characters that may be part of the NPI are
translated to specific numerics before the calculation of the check digit. This NPI format would allow for the creation of approximately 20 billion unique identifiers.
According to the United States Department of Health and Human Services (HHS), the 8-position alphanumeric format was chosen over a longer numeric-only format in order to keep the identifier as short as possible while providing for an identifier pool that would serve the industry’s needs into the future. However, the HHS recognizes that some health care providers and health plans might have
difficulty in the short term in accommodating alphabetic characters. Therefore, it proposes to initially issue numeric-only identifiers, and to later introduce alphabetic characters starting with the first position of the NPI. This would afford additional time for health
care providers and health plans to accommodate the alphabetic characters.National Employer Identifier (NEI): This rule proposes a standard for a national employer identifier and requirements concerning its use by health plans, health care clearinghouses, and health care providers. The health plans, health care clearinghouses, and health care providers would use the identifier, among other uses, in connection with certain electronic transactions. As a note: employers are not required by HIPAA to use the standard employer identifier or standard health care transactions. However, an employer is required to disclose their NEI when requested to an entity that conducts standard transactions that require that employer’s identifier. After consultation with the National Uniform Billing Committee, the National Uniform Claim Committee, WEDI, and the American Dental Association, it was determined that there is no recognized standard that has been developed, adopted, or modified by a standard setting organization for employer identification as defined in the law. Therefore, the HHS proposed using the employer identification number (EIN), that is assigned to each employer by the Internal Revenue Service (IRS), Department of the Treasury. The “Employer identification number (EIN)” is defined at 26 CFR 301.7701 and is the taxpayer identifying number of an individual or other person (whether or not an employer) that is assigned pursuant to 26 U.S.C. 6011(b) or corresponding provisions of prior law, or pursuant to 26 U.S.C. 6109, and in which nine digits are separated by a hyphen, as follows: 00-0000000.
National Health Plan Identifier: It is expected that a 9-digit number will be assigned to all health plans.
National Individual Identifier: The issue of national identifiers for individuals was proposed in the early 1990s as part of comprehensive health care reforms that would have supplied a universal health care credit card for individuals to use. The implications of national individual identifiers, especially in light of the Privacy Rule provisions, and the concern of privacy advocates over the idea of assigning identity numbers to individuals, have since become controversial. Therefore, the development of the NPRM
was subsequently placed on indefinite hold pending further review.HITECH Act :On February 17, 2009, President Obama signed the Health Information Technology for Economic and Clinical Health (HITECH) Act, as part of the stimulus package (a.k.a. American Recovery and Reinvestment Act (ARRA)). The main goal of the HITECH Act is to encourage the adoption of electronic health records (EHRs) through incentive payments to physicians.
According to the Act, physicians are eligible to receive up to $44,000 in total incentives per physician from Medicare for “meaningful use” of a certified Electronic Health Record (EHR) starting in 2011.
HHS is not expected to announce final “meaningful use” guidelines until spring 2010, though recommendations for “meaningful use” (including dozens of objectives and measures) were released by the HIT Policy Committee this summer.
The HITECH Act is clearly an ideal opportunity for physicians who use EHRs effectively to be rewarded and to stimulate adoption for those who aren’t currently using EHRs. We are here to help you navigate through the complex health care environment, maximize your revenue, and focus on quality care.
The Health Information Technology for Economic and Clinical Health Act (HITECH Act), enacted as part of the American Recovery and Reinvestment Act of 2009, imposes notification requirements on covered entities, business associates, vendors of personal health records (PHR) and related entities in the event of certain security breaches relating to protected health information (PHI). The U.S. Department of Health and Human Services (HHS) issued guidance on the subject; HHS and the Federal Trade Commission (FTC) are working to harmonize their respective regulations and are seeking public comment with a view to issuing interim final regulations by August 17, 2009, the deadline imposed by the HITECH Act.
The Health Information Technology for Economic and Clinical Health (HITECH) Act was enacted on February 17, 2009, as Title XIII of Division A and Title IV of Division B of the American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5). Subtitle D of the HITECH Act (the Act), entitled “Privacy,” among other provisions, requires HHS to issue interim final regulations for breach notification by entities subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and their business associates. In particular, section 13402 of the Act requires HIPAA covered entities to notify affected individuals, and requires business associates to notify covered entities, following the discovery of a breach of unsecured protected health information (PHI).
The breach notification provisions of section 13402 apply to HIPAA covered entities and their business associates that access, maintain, retain, modify, record, store, destroy, or otherwise hold, use, or disclose unsecured PHI (sections 13402(a) and (b)). For purposes of these provisions, “breach” is defined in the Act as “the unauthorized acquisition, access, use, or disclosure of protected health information which compromises the security or privacy of such information, except where an unauthorized person to whom such information is disclosed would not reasonably have been able to retain such information.” The Act includes exceptions to this definition for cases in which: (1) the unauthorized acquisition, access, or use of PHI is unintentional and made by an employee or individual acting under authority of a covered entity or business associate if such acquisition, access, or use was made in good faith and within the course and scope of the employment or other professional relationship with the covered entity or business associate, and such information is not further acquired, accessed, used, or disclosed; or (2) where an inadvertent disclosure occurs by an individual who is authorized to access PHI at a facility operated by a covered entity or business associate to another similarly situated individual at the same facility, as long as the PHI is not further acquired, accessed, used, or disclosed without authorization (section 13400, definition of “breach”).
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Following the discovery of a breach of unsecured PHI, a covered entity must notify each individual whose unsecured PHI has been, or is reasonably believed to have been, inappropriately accessed, acquired, or disclosed in the breach (section 13402(a)). Additionally, following the discovery of a breach by a business associate, the business associate must notify the covered entity of the breach and identify for the covered entity the individuals whose unsecured PHI has been, or is reasonably believed to have been, breached (section 13402(b)). The Act requires the notifications to be made without unreasonable delay but in no case later than 60 calendar days after discovery of the breach, except that section 13402(g) requires a delay of notification where a law enforcement official determines that a notification would impede a criminal investigation or cause damage to national security.Source: The HHS Administrative Simplification web site
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See also:
- Final Security Rule regulations (PDF, 289 pages)
3. Title III: Tax-Related Health Provisions
- Title III provides for certain deductions for medical insurance, and makes other changes to health insurance law.
4. Title IV: Application and Enforcement of Group Health Plan Requirements
- Title IV specifies conditions for group health plans regarding coverage of persons with preexisting conditions, and modifies continuation of coverage requirements.
5. Title V: Revenue Offsets
Title V includes provisions related to company-owned life insurance, treatment of individuals who lose U.S. citizenship for income tax purposes and repeals the financial institution rule to interest allocation rules.
