Why is HIPAA Important?
HIPAA is important because, due to the passage of the Health Insurance Portability and Accountability Act, the Department of Health and Human Services was able to develop standards that protect the privacy of individually identifiable health information and the confidentiality, integrity, and availability of electronic Protected Health Information.
HIPAA was introduced in 1996, primarily to address one particular issue: Insurance coverage for individuals between jobs and with pre-existing conditions. Without HIPAA, employees faced a potential loss of insurance coverage between jobs. Because of the cost of HIPAA’s primary objective to health insurance companies – and the risk that the cost would be passed onto employers and individuals as higher premiums, Congress instructed the Secretary for Health and Human Services to develop standards that would reduce healthcare insurance fraud and simplify the administration of healthcare transaction.
Due to the increased number of transactions being conducted electronically, standards were also developed to protect the confidentiality, integrity, and availability of electronic Protected Health Information when it was collected, received, maintained and transmitted between healthcare providers, health plans, and healthcare clearinghouses. Further standards were developed to protect the privacy of individually identifiable health information (in any format) and to give individuals increased rights and control over their health information. The standards became known respectively as the HIPAA Security Rule and HIPAA Privacy Rule.
Why is HIPAA Important for Healthcare Organizations?
HIPAA introduced a number of important benefits for the healthcare industry to help with the 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.
Get The FREE
HIPAA Compliance Checklist
Immediate Delivery of Checklist Link To Your Email Address
Please Enter Correct Email Address
Your Privacy Respected
HIPAA Journal Privacy Policy
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 greatest benefits of HIPAA are for patients. HIPAA compliance 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 established rules that require healthcare organizations to control who has access to health data, restricting who can view health information and who that information can be shared with. HIPAA helps to ensure that any information disclosed to healthcare providers and health plans, or information that is created by them, transmitted, or stored by them, is subject to strict security controls. Patients are also given control over who their information is released to 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 are able to 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 – information 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. Prior to the Introduction of the HIPAA Privacy Rule, there were no requirements for healthcare organizations to release copies of patients’ health information.
Why is HIPAA Important? FAQs
What might happen to healthcare data if it were not protected by HIPAA?
What might happen to healthcare data if it were not protected by HIPAA is that it could be stolen and used to commit healthcare fraud. Healthcare data is a valuable commodity on the black market because it can be used by uninsured or underinsured individuals to obtain expensive healthcare treatment. Healthcare fraud results in increased insurance costs, which are passed down to employers and individuals in the form of increased insurance premiums.
What are the financial benefits for healthcare providers of complying with HIPAA?
The financial benefits for healthcare providers of complying with HIPAA include better patient outcomes and higher satisfaction scores, increased staff morale and employee retention rates, and fewer readmissions – a key factor in avoiding CMS payment penalties under the Hospitals Readmissions Reduction Program and other value-based initiatives.
Why is it important for healthcare professionals to comply with HIPAA?
It is important for healthcare professionals to comply with HIPAA to build a culture of trust with patients. If a patient feels any confidential information shared with a healthcare professional will remain confidential, they are more likely to be more forthcoming about health issues and the symptoms they are experiencing.
With more information available to them, healthcare professionals can make better informed diagnoses and treatment decisions. This 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.
If patients are unable to exercise their patients´ right allowed by HIPAA, what might happen?
If patients are unable to exercise their patients’ rights allowed by HIPAA, the likely outcome will be a complaint to the Privacy Officer or HHS’ Office for Civil Rights. This could result in a significant financial penalty and a time-consuming corrective action plan.
Allowing patients to exercise their rights under HIPAA is important because it´s not unheard of for mistakes to be made with patients´ records that can result in misdiagnoses, the wrong treatment being provided, or the wrong medication being prescribed.
By giving patients the right to inspect their medical records and make corrections when necessary, the risks of incorrect diagnoses, treatments, and medications are mitigated. Having access to their records can also help patients take more responsibility for their own wellbeing.
How do patients control who their information is released to and shared with?
Patients control who their information is released to and shared with by having the right to request privacy protection for protected health information (45 CFR §164.522). This right enables patients to request restrictions on how PHI is used and disclosed for treatment, payment, and health care operations, and also for involvement in the individual’s care and notification purposes.
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.
How does HIPAA protect sensitive health information?
HIPAA protects sensitive health information via regulations, standards, and implementation specifications. Covered entities and business associates are required to comply with applicable regulations, standards, and implementation specifications or potentially face a civil monetary penalty from HHS’ Office for Civil Rights – even if no breach of unsecured PHI has occurred.
Who must comply with HIPAA rules?
Entities that must comply with HIPAA Rules include health plans, health care clearinghouses, and healthcare providers that conduct electronic transactions for which the Department of Health and Human Services has developed standards (collectively known as “covered entities”). Businesses that provide services for or on behalf of covered entities that involve the use of disclosure of Protected Health Information are also required to comply with applicable HIPAA Rules.
Why is the HIPAA Breach Notification Rule important?
The HIPAA Breach Notification Rule is important because it requires covered entities and business associates to notify individuals when unsecured PHI has been accessed impermissibly so that individuals can take steps to protect themselves against theft and fraud. The Rule is also important because it makes covered entities and business associates accountable for shortcomings in their compliance efforts.
How does HIPAA support the digitization of health records?
HIPAA supports the digitalization of health records by laying the foundations of a cybersecurity framework to protect electronic health records from unauthorized access. The framework enabled Congress to incentivize the digitalization of health records via the Meaningful Use Program (now the Promoting Interoperability Program), which in turn improved the flow of health information between healthcare providers.
How has HIPAA evolved to meet the changing needs of health information technology?
HIPAA has evolved to meet the changing needs of health information technology via several HIPAA updates. The biggest recent HIPAA update was the Omnibus Final Rule in 2013. However, multiple changes to HIPAA have been proposed since 2020 onward, which would support the further evolution of HIPAA to meet the changing needs of health information technology.
How is compliance with HIPAA enforced?
Compliance with HIPAA is enforced by two offices within the Department for Health and Human Services – the Office of Civil Rights (responsible for compliance with Parts 160 and 164 of the HIPAA Administrative Simplification Regulations) and the Centers for Medical and Medicaid Services (responsible for compliance with Part 162). The Federal Trade Commission also enforces compliance with HIPAA for health appliance vendors that do not qualify as HIPAA covered entities, but who are required to comply with the Breach Notification Rule under Section 5 of the FTC Act.
