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The Importance of HIPAA

The Health Insurance Portability and Accountability Act, commonly known as HIPAA, is a law that people often talk about, but why is HIPAA so important? What did HIPAA change and how does it impact patients and the healthcare industry?

HIPAA came into effect in 1996 with the goal of addressing the issue of health insurance for people that were between jobs. Prior to HIPAA, people were faced with the prospect of being uninsured while they were changing employment.

A secondary issue was to ensure the security of protected health information (PHI) and to combat healthcare fraud.

Why is HIPAA Important for Healthcare Organizations?

HIPAA facilitated the shift from paper based to electronic based medical records. It also helped to lighten administrative functions, improved efficiency, and introduced safeguards to protect PHI and how it is shared.

The standardization of ways to record and transfer medical data ensured a coherent approach across the industry. Code sets and identifiers were unified, meaning all HIPAA covered entities use the same terminology, allowing PHI to be more simply understood when shared between providers, health plans, or other groups.

Why is HIPAA Important for Patients?

HIPAA provides a number of benefits for patients. In order to comply with HIPAA, all covered entities, such as healthcare providers and their associates, must introduce various protections to secure patients’ information.

Even if healthcare organizations do not want to reveal or lose PHI, or to have it stolen from them, HIPAA requires these organizations by law to protect the information – and introduces sanctions for those that do not.

HIPAA rules include provisions to restrict access to and sharing of PHI. It also ensures that all PHI handled by covered entities, created, sent, or stored by them, must be adequately protected. It also allows patients greater authority on who their information is shared with.

HIPAA lets patients take more control over their healthcare and their information. Despite the best intentions of healthcare organizations, they may introduce mistakes into a patient’s data. When patients are able to review the files themselves, they can spot these errors and have them rectified.

The ability to obtain copies of their records can help patients should they change to a new healthcare provider. This can save time, as results of previous tests can be shared, and the new provider can base their decisions on a review of the patient’s full medical history. Before HIPAA’s Privacy Rule was introduced, healthcare organizations were under no obligation to provide copies of patients’ information.