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Congress passed the Administrative Simplification
provisions of the
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
to improve the efficiency and effectiveness of the
nation’s Healthcare system.
HIPAA’s Administrative Simplification provisions require the
Department of Health and Human Services to promulgate standards for the
electronic exchange of certain administrative and financial transactions
and for the security and privacy of health information. The
Administrative Simplification provisions are implemented through a
package of regulations, all of which apply to three distinct covered
entities: health plans, Healthcare clearinghouses, and Healthcare
providers who transmit health information electronically in connection
with standardized transactions.
The Standards for Electronic Transactions regulation adopts standards
for eight electronic transactions and for national code sets to be used
in those transactions. The adoption of national code sets results in the
elimination of local procedure codes. Proposed standards for additional
transactions are expected in the future.
The Standards for Privacy of Individually Identifiable Health
Information regulation establishes standards for the use and disclosure
of protected health information. It also establishes some patient
rights, including individuals’ access to records.
A Security regulation will address the safeguarding
of health information in electronic form.
Other regulations will address identifiers
for Healthcare providers, employers and health plans.
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