Why is HIPAA Important for Healthcare Organizations?

What is HIPAA?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law requiring national standards to protect sensitive patient health information from being disclosed without the patient’s consent or knowledge. The US Department of Health and Human Services (HHS) issued the HIPAA Privacy Rule to implement the requirements of HIPAA. The HIPAA Security Rule protects a subset of information covered by the Privacy Rule.

Why is HIPAA compliance substantial? What changes did HIPAA introduce, and what are the benefits to the healthcare industry and patients?

HIPAA was introduced in 1996 primarily to address one particular issue: Insurance coverage for individuals between jobs. Without HIPAA, employees faced a loss of insurance coverage when they were between jobs.

The second goal of HIPAA was to prevent healthcare fraud, ensure that all ‘protected health information’ was appropriately secured, and restrict access to health data to authorized individuals.

Why is HIPAA Important for Healthcare Organizations?

HIPAA introduced several essential benefits for the healthcare industry to help transition from paper records to electronic copies of health information. HIPAA has helped to streamline administrative healthcare functions, improve efficiency in the healthcare industry, and ensure that protected health information is shared securely.

The standards for recording health data and electronic transactions ensure everyone is singing from the same hymn sheet. 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.


Why is HIPAA Important for Patients?

Arguably, the most significant benefits of HIPAA are for patients. HIPAA is important because it ensures healthcare providers, health plans, healthcare clearinghouses, and business associates of HIPAA-covered entities must implement multiple safeguards to protect sensitive personal and health information.

While no healthcare organization wants to expose sensitive data or have health information stolen, without HIPAA, there would be no requirement for healthcare organizations to safeguard data – and no repercussions if they failed to do so.

HIPAA helps to ensure that any information disclosed to healthcare providers and health plans, or information they create, transmitted, or store by them, is subject to strict security controls. HIPAA established rules requiring healthcare organizations to control who has access to health data, transmit and who can view health information and who can be shared with. Patients are also given control over who their information is released and who it is shared with.

HIPAA is important for patients who want to take a more active role in their healthcare and want to obtain copies of their health information. Even with great care, healthcare organizations can make mistakes when recording health information. If patients can obtain copies, they can check for errors and ensure mistakes are corrected.

Obtaining copies of health information also helps patients when they seek treatment from new healthcare providers – data can be passed on, tests do not need to be repeated, and new healthcare providers have the entire health history of a patient to inform their decisions. Before the HIPAA Privacy Rule’s introduction, healthcare organizations had no requirements to release copies of patients’ health information.


Why is HIPAA Important? FAQs

What might happen to healthcare data if HIPAA does not protect it?

Before HIPAA, healthcare data theft was often used for identity theft. This not only had financial implications for patients whose data was stolen but also enabled criminals to obtain healthcare under pretenses or sell the data on the black market to uninsured persons who could receive expensive healthcare treatments. This increased insurance costs passed down to individuals through high insurance premiums.

What are the financial benefits for Covered Entities of complying with HIPAA?

It is difficult to quantify the financial benefits of streamlined administration and improved efficiency because the changes Covered Entities introduced have been over a long period. However, evidence suggests that compliance leads to better patient outcomes and higher workforce morale. If true, compliant Covered Entities will benefit financially from CMS´ value-based programs and have fewer costs related to staff turnover.

Why is it essential for healthcare professionals to comply with HIPAA?

Healthcare professionals are often told it is critical to comply with HIPAA because of the sanctions for noncompliance. A different argument is that HIPAA compliance builds trust, which gives patients the confidence to reveal details about their health to healthcare professionals, improving healthcare delivery—improved healthcare delivery results in better patient outcomes, which leads to higher morale. Effectively, by complying with HIPAA, healthcare professionals enjoy more rewarding experiences and get more from their vocation.

What might happen if patients cannot exercise their patients´ rights allowed by HIPAA?

Healthcare professionals are very hardworking individuals, and it´s not unheard of for mistakes to be made with patients´ records that can result in misdiagnoses, unfair treatment being provided, or the wrong medication being prescribed. The risks of incorrect diagnoses, treatments, and medications are mitigated by giving patients the right to inspect their medical records and make corrections when necessary. Additionally, having access to their records helps patients take more responsibility for their well-being.

How do patients control who their information is released to and shared with?

Covered Entities are allowed to release and share patient information for treatment, payment, and healthcare operations. For all other disclosures of patient information, Covered Entities must obtain patient consent or allow patients to object to their data being released or shared. How patients consent or object should be explained in the Covered Entity´s Notice of Privacy Practices and how patients can obtain an “Accounting of Disclosures” to ensure information is not released or shared without their consent.

Why is the HIPAA Privacy Rule important?

The HIPAA Privacy Rule is important because it sets a “federal floor” of privacy protections and rights for individuals to control healthcare data. This means that Covered Entities throughout the country must comply with the HIPAA Privacy Rule unless a state law offers more stringent privacy protections or greater rights for individuals.


EHA Administrative Advice

Ask for your organization or healthcare setting HIPAA rules and follow their protocol and guidelines.

Compliance with the U.S. Health Insurance Portability and Accountability Act (HIPAA) requires companies with protected health information (PHI) to have a physical, network, and process security measures in place and follow them.



References: CDC


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