Why is HIPAA important?

The Health Insurance Portability and Accountability Act (HIPAA) gave patients and insureds new rights with respect to their health information and is one of the most important legislative acts covering the healthcare industry.

HIPAA is important because it requires healthcare organizations to implement safeguards to keep health information private and confidential, places restrictions on uses and disclosures of health data, and gives Americans greater control over their health information.

Under HIPAA, healthcare organizations must keep health information protected at rest and in transit to prevent unauthorized individuals from gaining access to sensitive health information. HIPAA set minimum standards for data security. Prior to HIPAA becoming law, no such standards existed at the federal level.

HIPAA also places restrictions on uses and disclosures of health information. The HIPAA Privacy Rule restricts the use of health information to treatment, payment for healthcare, and essential business purposes. HIPAA does not prohibit other uses of health information, it just requires the holder of healthcare data to obtain authorization from individuals before their healthcare data can be used for other purposes. Patients have the right to refuse to give their authorization for these additional uses without facing repercussions for that choice. HIPAA also allows patients to specify who is permitted to act on their behalf and make decisions about their healthcare.

Prior to the introduction of the HIPAA Privacy Rule, healthcare providers and health plans were not obliged to provide patients with a copy of their health information. HIPAA allows patients to obtain a copy of their medical records by submitting a request in writing. Those requests must be processed within 30 days. By obtaining a copy of their medical records, patients can look for errors and ensure any mistakes are corrected. This right also makes it easier for patients to share their healthcare data with others.

Since healthcare organizations are required appoint a HIPAA Privacy Officer, if patients feel that their privacy has been violated, they have a point of contact to direct their complaint to. They can also submit complaints of privacy violations to the government and the HHS’ Office for Civil Rights will investigate.

These are all important rights for patients, but HIPAA is also important for healthcare organizations. By introducing standards for codes and transactions, HIPAA improved efficiency in healthcare and has helped to reduce healthcare fraud. The improvements in efficiency, reduction of wastage, and prevention of fraud saves the healthcare industry billions of dollars each year, which has helped drive down the cost of healthcare.