The HIPAA law was enacted to improve the efficiency and effectiveness of the American health care system. The law includes administrative simplification provisions to establish standards and requirements for the electronic transmission of certain health care information. It also requires organizations exchanging information for health care transactions to follow national implementation guidelines.
To meet these goals, federal transaction and code set rules have been issued:
• Requiring use of standard electronic transactions and data for certain administrative functions
• Standardizing the medical codes that providers use to report services to insurers
• Creating specific identification numbers for employers (Standard Unique Employer Identifier [EIN]) and for providers (National Provider Identifier [NPI])
HIPAA is a legislative act made up of these five titles:
Title I covers health care access, portability and renewability, which requires that both health plans and employers keep medical coverage for new employees on a continuous basis, regardless of preexisting conditions. Losing or switching jobs can be difficult enough if there is no possibility of lost or reduced medical insurance.
Title II involves preventing health care fraud and abuse, administrative simplification and medical liability reform, which allows for new definitions of security and privacy for patient information, and closes loopholes that previously left patients vulnerable. This section also provides a framework for reduced administrative costs through key electronic standards for healthcare transactions, as well as identifiers for employers, individuals, health plans and medical providers.
Title III deals with tax-related health provisions, which initiate standardized amounts that each person can put into medical savings accounts. These can be funded with pre-tax dollars, and provide an added measure of security.
Title IV deals with application and enforcement of group health plan requirements. This section offers detailed information about the provisions of this insurance reform, and gives specific explanations across a wide range of the bill’s terms. It also covers the portability of group health plans, together with access and renewability requirements.
Title V details a broad list of regulations and special rules and provides employers with revenue offsets, thus increasing HIPAA’s financial viability for companies, and spelling out regulations on how they can deduct life-insurance premiums from their tax returns.