The document summarizes the goals and intentions behind the Health Insurance Portability and Accountability Act (HIPAA). HIPAA aims to enable citizens to change jobs without losing health insurance, ensure privacy of health information, and establish consistent use of health terms and codes. Title I addresses health insurance reform, while Title II focuses on administrative simplification to decrease healthcare costs by facilitating electronic data exchange between providers. Covered entities like health plans, providers, and clearinghouses must comply with HIPAA, as well as their business associates.

1. Chapter 1The Goal of HIPAA:Administrative Simplification By Carol Allingham, R.N., Esq. Excerpted from Cynthia Newby, CPC HIPAA for Allied Health CAreers 1

2. Why HIPAA? 2

4. To Ensure the privacy of citizens’ private health information by setting standards for Privacy Practices

5. To Establish consistent use of terms and codes between health care providers in the U.S.3

6. HIPAA Title I – Health Insurance Reform Applies to Private Health Insured Citizens Employer-Sponsored Health Benefits Plans “Group Health Plans” or GHP’s Federal Employees’ Health Benefits Program Called the FEHB Program Administered by the Federal Office of Personnel Management (OPM) Individual Plans Citizens using COBRA Self-employed citizens, students, early retirees 4

7. HIPAA Title I Cont’d Private Insurance Plans may only look back 6 months for excluded pre-existing conditions Private Insurance Plans may only limit pre-existing condition coverage for up to 12 months (18 months for late enrollees) Citizens who have a letter of creditable coverage may enroll in a new plan in certain circumstances with special consideration to pre-existing conditions 5

8. Title II: Administrative Simplification Goals of Title II Decrease overhead (administrative) expenses of health care in the U.S. – estimated at 15 to 30% of overall health care expenses Filing claims (paper forms, processing, storage, etc.) Checking patient eligibility for benefits Requesting authorization for services Notifying providers of payments 6

9. Title II: Administrative Simplification Cont’d Electronic Data Interchange (EDI) – the computer-to-computer interchange of routine business information using publicly available standards. 7

10. Title II Administrative Simplification Cont’d Transaction – The electronic equivalent of a business document. ONE electronic exchange in EDI between two parties involved in financial or administrative activities related to health care. Example: A physician’s office submits a claim to Aetna for a procedure performed to treat a specific diagnosis. 8

11. Title II: Administrative Simplification Cont’d Requires the U.S. Department of Health & Human Services (HHS) to establish -National standards for electronic health care transactions and -National identifiers for providers, health plans, and employers -Required procedures for health care entities to exchange electronic health care information in a standard and secure, consistent way. 9

12. Title II Administrative Simplification Cont’d -Preemption - between HIPAA federal law and state laws; -HIPAA rules supersede state rules -Unless HIPAA rules provide that state laws are necessary regarding the issues of fraud, abuse, insurance regulation, controlled substances, or other issues UNLESS. . . 10

13. Title II Administrative Simplification Cont’d -Preemption - between HIPAA federal law and state laws; (cont’d) -HIPAA laws do NOT supersede state laws if the state laws are more stringent. Examples: Look at Section 1-2 Thinking It Through in your book. . . 11

14. How Does a Government Agency Make “Law”? Administrative Procedure Act of 1946 -Gave the Executive Branch of the U.S. government the power to set up administrative agencies (e.g., C.I.A., F.D.A., H.H.S.,. . . ) -The various designated agencies are endowed with LIMITED scopes of authority to create regulations and enforcement actions to ensure compliance with these regulations. 12

15. How Does a Government Agency Make “Law”? The Administrative Procedure Act of 1946 requires the following Rulemaking Process for Administrative Agencies 1. Draft and approve the rule. 2. Publish the Proposed Rule for a required period of time to allow for public comment. 3. The public is given a period of time to comment on the proposed rule, up to 18 months. AND NEXT, 13

16. How Does a Government Agency Make “Law”? 4. The agency (for HIPAA, It’s the HHS) revised the rule according to its response to public comment and then 5. The final rule is published in the Federal Register with standards as to when it must be implemented by those affected. 14

17. Who is Subject to HIPAA Laws? Covered Entities (CE’s) – An organization or a health care professional who * provides health care in the normal course of business and * electronically sends ANY information what is protected under HIPAA Nice Flow Chart on page 12 of Newby 15

18. Who is Subject to HIPAA Laws? Health Plans, Providers, Clearinghouses, and Business Associates 16

19. Who is Subject to HIPAA Laws? Health Plan – An insurance plan that provides or pays for medical care. (Examples: Group health plans and self-insured plans, all state-regulated insurance companies, Medicare Parts A & B and Medicare Advantage under Parts C & D, Medicare, Medicaid, TRICARE, CHAMPVA, etc.) 17

20. Who is Subject to HIPAA Laws? Providers – people or organizations that furnish, bill, or are paid for health care in the normal course of business. (Examples: Hospitals, Nursing and Rehab Centers, Hospices, Home Health Agencies, Doctors’ Offices, Dentists’ Offices, etc.) 18

21. Who is Subject to HIPAA Laws? Clearinghouses - Companies that help providers handle electronic transmissions involving the use of personal or protected health information. They process the health information by converting it in to a format that HIPAA standards require. 19

22. Who is Subject to HIPAA Laws? Business Associates – people and organizations who are not employees of Health Plans, Providers or Clearinghouses, but do work for these entities. They are required to follow HIPAA laws as well. (Examples: Lawyers, JCAHO, Accountants, Coders, Transcriptionists, Collection Agencies, any other private contractor or third party administrator.) 20

23. Who is Subject to HIPAA Laws? If you are a Health Plan, Provider, Clearinghouse, then you are considered a Covered Entity and are subject to HIPAA laws. If you are a Business Associate of a Covered Entity, then you are subject to HIPAA laws. If the Business Associate violate HIPAA law, the Covered Entity is required to report it to HIPAA and also report corrective action taken. 21

24. Case Studies 22

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