HIPAA Compliance and Health Privacy
What You Need to Know About HIPAA Compliance!
By Jim Cavagnaro
HIPAA - the Health Insurance Portability and Accountability Act
- is a
federal law developed, in part, to define and regulate the use of
information in the United States. Entities that provide, pay for
health services, medications or equipment, as well as their business
partners and vendors, are affected by this new set of regulations.
article summarizes the work that needs to be done to meet requirements
necessary to become HIPAA compliant.
The Act defines and regulates
- how health information is identified
and used, including standard transaction forms and code sets
for communicating between providers and payers,
- what information, known as Protected
Health Information (PHI) is to be considered private and how
it must be handled, and
- security policies and procedures
for protecting PHI.
These regulations all fall under Title II of HIPAA and are collectively
known as the Administrative Simplification Compliance Act (ASCA).
name implies, all entities covered by ASCA must be in compliance
deadlines set forth in the regulations. These deadlines are:
Standardized Transactions and Code Sets -- October 16, 2002
Privacy -- April 14, 2003
Security -- deadline has not yet been set.
Note, however, that the Department of Health and Human Services
covered entities to apply for a one-year extension to the Transactions
Code Sets deadline if they submit a Model Compliance Plan form that
a schedule showing how they intend to become compliant during the
period. This application must be received no later than October
In addition, certain small health plans have an additional year
with all the deadlines. Much more detail on HIPAA and the ASCA can
at the Centers
for Medicare and Medicaid Services web site which also contains
How does the ASCA affect my practice or institution?
Directly or indirectly, you will be affected if you provide health
or support health services providers. Covered entities that choose
transmit identifiable patient-related information electronically
required to implement these standards. In practice, this means any
who sends bills directly to third-party payers since ASCA requires
those bills be sent electronically with a small number of exceptions.
Additionally, an entity falls under HIPAA if it is a health plan,
clearinghouse, third-party insurer, employer maintaining health
rehabilitation center, blood, sperm or organ tissue bank, social
counselor, long-term care facility, ambulance company or pharmacy.
many more companies and services are impacted, including those who
services or supplies to health service providers or to patients
direction of providers. They will need new business agreements assuring
HIPAA compliance and must implement acceptable information privacy
security measures. If these companies bill third-party payers directly,
they will also need to implement the transactions and code sets
Outside technology vendors, transcription providers, accountants,
and anyone else who may come in to contact with patient information
course of normal business dealings will also be affected. In short,
create, maintain, manage or have access to personal medical information,
should be concerned about becoming compliant with HIPAA regulations.
To date, HIPAA implementation work has concentrated on defining
transactions for use by providers and third-party payers, and creating
standard definitions for health care providers, employers, health
individuals to use in creating patient record information. Code
being created to define standard medical terms, diagnosis codes,
injuries, etc. Medical procedure codes are also being defined for
taken to prevent, diagnose, treat or manage diseases, injuries and
impairments, as well as for medications, equipment, supplies and
prescribed for treatment.
While many of these code sets are those familiar to providers today,
are some changes in the format of transactions and the codes that
used which may affect the transmission of information between providers
payers. As an example, local codes can no longer be used. Thus,
specific insurer has asked providers to append a national procedure
with a suffix to further characterize the procedure, the insurer
to develop another way of obtaining the information it seeks. This
that providers will have to learn a new procedure for coding claim
How do I become compliant?
The majority of work and cost will be in redesigning office processes
patient privacy and in developing of a comprehensive security program
patient information. Areas that will need to be reviewed include
policies and procedures, standards, staff training, technical and
controls, risk assessments, auditing and monitoring of compliance.
provider must also assign responsibility for ongoing management
information security program. Suppliers must agree in writing to
the same level of security and privacy as the providers with whom
What do I have to do?
The first step is to perform a gap assessment to determine
what must be
done in order to become compliant. Procedures, processes and information
management must all be reviewed in light of the ASCA. For example,
office processes such as a nurse asking a physician information
patient over an open intercom when another patient can overhear
conversation have to be modified to assure patient privacy.
Once the scope of necessary change is understood, an implementation
should be developed.
The next major operational step is to fund and execute the implementation
plan. In addition, all staff and employees who handle patient information
discuss it with outside parties must be trained in how to keep the
information private and secure. This training should also include
instruction on any new procedures that are developed and implemented.
What about my computers and software?
An affected organization must implement measures, policies and procedures
assure the security of any information systems that contain individually
identifiable patient health information. These would be coordinated
integrated with other system configuration management practices
in order to
assure system integrity when changes to system hardware or software
made. Any software purchased as a package from an outside vendor
In addition, affected parties must provide a contingency plan that
for responding to information system emergencies, including periodic
up of data, having and testing facilities for continuing operations
event of an emergency, and developing effective disaster recovery
procedures. Computer controls and security measures should be documented
the same manner as other policies and procedures.
Each organization is also required to have a policy on workstation
These documented instructions and procedures should delineate the
functions to be performed and the manner in which those functions
are to be
performed (e.g., logging off before leaving a terminal unattended).
Restrictions must be put in place to prevent unauthorized personnel
accessing information stored on the entitys computers.
Facilities that use communications networks are required to protect
containing health information when they transmit them electronically
prevent them from being intercepted and read by parties other than
intended recipient. They must also protect their information systems
intruders trying to access information from external communication
This typically means that some form of encryption must be used to
this information. As well, there needs to be documented policies
security features for the use of fax, e-mail, Internet, remote dictation
Jim Cavagnaro is CEO of TCN, which provides educational, project
and consulting services through TCN's HealthCare solutions group.
information on HIPAA can be found at http://www.tcnus.com
or by calling