The Health Insurance Portability and Accounting Act of 1996

The primary purpose of HIPAA was to enhance health insurance accessibility for people changing employers or leaving the workforce. However, HIPAA also contained a chapter entitled “Administrative Simplification” whose provisions were designed to encourage transmission of confidential health care data electronically. In return for legislating a significant savings for health plans and providers by simplifying claims transactions, Congress imposed a series of privacy and security requirements to assure that electronically transmitted data would remain confidential and secure.

In addition, congress and privacy advocates (including physicians) were concerned that the growing use of electronic means to transmit healthcare data increased the risk to the public that the data would be compromised. Many members of the public have acknowledged that they have withheld information from a physician out of concern for security of their records and many physicians report they have similarity failed to record certain information in the medical record due to the same fear. The lack of standardization for collection and storage of health care information was and is increasing administrative costs and burdens the system.


All of the following are covered if they use “electronic means” to transmit and HIPAA covered transaction.

Thus, all physicians are covered by HIPAA if they use electronic means to transmit any of the following: health claims, remittance or payment advice, claims status inquiries, eligibility inquires, enrollment and disenrollment, referral certification and authorization, coordination of benefits, coordination of benefits or health plan premium payments. The rules take a very broad view of “electronic means” – to includes Internet, leased or dial-up phone lines, extranet and virtual and private networks. This is true even when data is physically moved, e.g., on tapes, CD’s or diskettes.

Once you are covered, the Privacy Rule applies to ALL “protected health information” (“PHI”) whether on paper, oral or electronic form. As health plans begin to require physicians to submit claims electronically, few will be able to escape the grasp of HIPAA. Use of telephone and faxback systems are explicitly excluded; mere use of a fax machine alone to submit a claim is not considered an “electronic means” so faxing claims to a payer would not required a physician to use the standard transaction forms. However, if you fax to a clearinghouse or billing service that bills electronically, you are covered by HIPAA.


The administrative Simplifications rules include four main provisions:

Background on Authorizations Provisions:

Patient Rights:

Security Procedures to be followed by the practice of Robert Park, M.D.:

If any employee ever has a question about HIPAA, please see the Privacy Official (Gina Halley). We will have regular meetings at which we will discuss changes and updates. This may all seem very complex but it is really very simple. Protect our patient’s rights as you would protect your own.

{ Close This Window }