Is your Business a HIPAA-covered entity?
Safeguard your patient’s protected health information (PHI) by complying to the Health Insurance Portability and Accountability Act (HIPAA).
Health information systems greatly influence a healthcare practice’s efficiency. If your business is in the healthcare industry, you have likely heard about the Health Insurance Portability and Accountability Act (HIPAA). Understanding and complying with its regulations and responsibilities is crucial for organizations, companies, and individuals classified as HIPAA-covered entities. Following HIPPA regulations helps businesses avoid legal risks due to violations and breaches. Failure to satisfy HIPAA compliance requirements may cost you penalty fines up to millions of dollars depending on the circumstances of your violations.
Does your business need to comply with HIPAA?
The Health Insurance Portability and Accountability Act is a federal law that requires HIPAA-covered entities to comply with regulations that aim to strengthen data privacy and security provisions. These regulations make sure that businesses have secured handling and storage of medical information. In fact, the rise of medical data breaches due to targeted cyberattacks emphasizes the relevance of HIPAA in this digital age. There are two primary purposes of the HIPAA law. First, it includes health insurance reform for individuals who lose or change jobs. Second, it standardizes electronic healthcare transactions to reduce healthcare costs.
HIPAA-covered entities refer to individuals, organizations, or agencies that must maintain HIPAA compliance. Covered entities transmit confidential medical information for transactions standardized by the Department of Health and Human Service. Confidential medical information includes things like electronic fund transfers, healthcare claims, the purpose of payment, insurance coverage, referral certification and authorization, and more. That said, HIPAA does not require businesses not covered by the Act to comply with its rules.
HIPAA-covered entities
Generally, covered entities as defined by the Health Insurance Portability and Accountability Act, are healthcare providers, health plans, and health clearinghouses that transmit protected health information (PHI). Specific criteria of covered entities can include:
1. Healthcare provider
Medical practitioner or other healthcare service provider, and persons furnishing healthcare services or supplies, who transmit electronic health information in connection with an HHS-standardized transaction. Healthcare providers include doctors, nurses, dentists, pharmacies, and clinics. Other entities can also fall into this category.
2. Health plans
An individual or group plan that provides or pays medical fees, except group plans with less than 50 participants managed solely by the employer that developed and maintained the plan. This category includes Health Maintenance Organizations (HMOs), private health plans, and government-promulgated healthcare programs. Other entities can also fall into this category.
3. Healthcare clearinghouse
A private or public entity that administers or is involved in processing non-standardized health information into standardized healthcare data elements.
Business Associates (BAs) are directly liable as per the law in addition to covered entities enumerated above. Business Associates are individuals or agencies affiliated with a HIPAA-covered entity. HIPAA BAs are involved with and have access to protected health information and its transmission. Covered entities that work with a business associate must secure a written arrangement contract. This contract should specify all engagements and ensures HIPAA compliance of the BA.
What does HIPAA cover?
The HIPAA Privacy Rule underscores the utilization and the disclosure of PHI by covered entities. It safeguards the collected and stored medical information and regulates the flow of protected healthcare data to ensure the highest quality of healthcare systems while providing protection to the patients’ health and well-being. The Privacy Rule protects all individually identifiable health information obtained, created, maintained, processed, or involved with any covered entity, including BAs. Healthcare information covered by HIPAA can be in any form (e.g., electronic, printed, oral).
HIPAA defines Protected Healthcare Information as any healthcare data of an individual, which includes but is not limited to:
- • Personally identifiable information such as the patient’s name, phone number, account numbers, birth date, biometric identifiers, etc.
- • Past, present, and future medical records of an individual, including laboratory results, hospital bills, etc.
- • Healthcare insurances acquired by an individual.
- • Digital information such as Internet Protocol (IP) address, Web Uniform Resource Locators (URLs), and Device identifiers.
- • Any unique identification number or codes.
HIPAA Compliance
As per HIPAA, compliance requirements must adhere to Title II of the Act. It states that electronic healthcare transaction processes must be standardized by the United States Department of Health and Human Services (HHS) nationwide. Covered entities must utilize secure electronic procedures that comply with the privacy regulations of HHS. In addition, covered entities are responsible for compliance to the following:
- 1. Privacy Rule: Covered entities follow national standards to safeguard all patient health information and personally identifiable information.
- 2. Security Rule: Outlines standardized protocols for patient data security.
- 3. Enforcement Rule: Specifies guidelines for investigating HIPAA violations and breaches.
- 4. National Provider Identifier Standard
- 5. Standards for Transactions and Code Sets
Failure to comply with these requirements, HIPAA violations, and breaches may result in penalties including fines that are based on the severity of the offense. Penalties for violating HIPAA Privacy Rules can be classified into four, arranged in increasing severity:
- 6. Violation of HIPAA unknowingly
- 7. Violation of HIPAA with reasonable cause
- 8. Neglect of HIPAA (violation is corrected within a particular timeframe)
- 9. Neglect of HIPAA (violation is not corrected)
What you can do
HIPAA violation fines can be financially damaging for healthcare organizations or any covered entity, especially medical business start-ups. Beyond the penalties, HIPAA-covered entities must notify all affected patients when a breach or violation of regulations occurs. However, covered entities can decrease legal risks due to non-compliance by taking training programs on HIPAA Privacy and Security Rules. Specifically, businesses should look for programs supported by the HHS Office for Civil Rights (OCR). To date, HIPAA has yet to offer an official certification for HIPAA compliance.
You cannot solve every business problem with the same approach. Therefore, addressing legal compliance issues can be overwhelming. Streamsoft can lend a hand by crafting unique solutions for your unique business needs. To learn more about how you can establish, maintain, and grow your business schedule a consultation with Streamsoft. With our expert help, you can have confidence in running your business free of legal risks.
