Importance of HIPAA Compliance and Laws

Importance of HIPAA Compliance and Laws

Regardless of where you live, you have to follow the laws of that land. Certain laws are made to prevent corruption and sustain robust, trustworthy industries.

Specifically, for the health care industry, the Health Insurance Portability and Accountability Act of 1996 (HIPAA or the Kennedy-Kassebaum Act) is really important to understand and abide by.

What Is HIPAA Compliance?

According to the California Department of Health Care Services, HIPAA does the following:

  • Provides the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs;
  • Reduces health care fraud and abuse;
  • Mandates industry-wide standards for health care information on electronic billing and other processes; and
  • Requires the protection and confidential handling of protected health information

In reference to California’s Department of Health Care Services, HIPAA is also organized into separate “Titles”, which include:

Title 1: HIPAA Health Insurance Reform- HIPAA, Title 1 protects health insurance coverage for workers and their families when they change or lose their jobs.

Title II: HIPAA Administrative Simplification- HIPAA, Title II requires the Department of Health and Human Services to establish national standards for electronic health care transactions and national identifiers for providers, health plans, and employers. It also addresses the security and privacy of health data. Adopting these standards will improve the efficiency and effectiveness of the nation’s health care system by encouraging the widespread use of electronic data interchange in health care. The U.S. Department of Health and Human Services (DHHS) develops and publishes the rules pertaining to the implementation of HIPAA and standards to be used. All health care organizations impacted by HIPAA are required to comply with the standards.

Title III: HIPAA Tax Related Health Provisions: HIPAA, Title III provides for certain deductions for medical insurance, and makes other changes to health insurance law.

Title IV: Application and Enforcement of Group Health Plan Requirements- HIPAA, Title IV specifies conditions for group health plans regarding coverage of persons with pre-existing conditions, and modifies continuation of coverage requirements.

Title V: Revenue Offsets: HIPAA, 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.

Why Is HIPAA Compliance Important for Healthcare Organizations?

With HIPAA, many benefits for the health care industry have been introduced. For example, through helping with the transition from paper records to electronic copies of health information. In addition, HIPAA has helped to streamline administrative healthcare functions, improve efficiency in the healthcare industry, and ensure protected health information is shared securely. It also provided unified standards for recording health data and electronic transactions.

Since all HIPAA-covered entities must use the same code sets and nationally recognized identifiers, this helps enormously with the transfer of electronic health information between healthcare providers, health plans, and other entities.

Make sure you abide by the rules. After all, you will win your clients trust and they will most likely come back to you.

Stay updated with industry laws and regulations by reading hearing health resources.