What is HIPAA?

The Health Insurance Portability & Accountability Act (HIPAA) became public law August 21, 1996. It was a federal bi-partisan bill based on the Kennedy-Kassebaum bill. The primary goal of the law was to make it easier for people to keep health insurance, and help the industry control administrative costs.

HIPAA is divided into five Titles or sections. The first title is portability and it has been fully implemented. Portability allows individuals to carry their health insurance from one job to another so that they do not have a lapse in coverage. It also restricts health plans from imposing pre-existing condition limitations on individuals who switch from one health plan to another.
Click here to view: HIPAA Components.
Title II is called Administrative Simplification. Title II was designed to:

  • Reduce health care fraud and abuse
  • Guarantee security and privacy of health information
  • Enforce standards for health information and transactions
  • Reduce the cost of healthcare by standardizing the way the industry communicated information

Titles III, IV, and V have not been defined.
The main benefit of HIPAA is standardization. HIPAA is going to require the adoption of industry-wide standards for:

  • Administrative Health Care Transactions
  • Unique Identifiers for Providers
  • Employers
  • Health Plans
  • Individuals
  • Health Care Procedures
  • Diagnosis Code Sets
  • Security Measures
  • Electronic Signatures
  • Privacy Protections