The primary intent and purpose of this law is to protect health insurance coverage for workers and their families when they change or lose their jobs. It was recognized that this new protection would impose additional administrative burdens on health care providers, payers and clearinghouses; and therefore, the law includes Section 262, Administrative Simplification. This section is specifically designed to reduce the administrative burden associated with the electronic transfer of health information between organizations, and more generally, to increase the efficiency and cost-effectiveness of the United States health care system. This approach accelerates the move from certain paper-based administrative and financial transactions to electronic transactions through the establishment of national standards (Allan, 2001).
“Accountability Act of 1996 (HIPAA) prompted new Federal regulations which require physicians to ensure they are protecting the privacy and security of patients' medical information and using a standard format when submitting electronic transactions, such as submitting claims to payers.” (Web, 1)
Purpose HIPAA addresses the protection of health information from its creation and establishes uniform requirements for those handling such information. The new privacy regulations effect all health care providers, health plan administrators, and health care clearinghouses (hereinafter collectively referred to as "health care operators") that electronically transmit individual, identifiable health information in one of several types of transactions (Allan, 2001). The regulations apply not only when a health care operator engages in one of the listed transaction, but any time they use or disclose protected information. In fact, the regulation covers such a broad variety of healthcare-related transactions -- such as verification and coordination of benefits -- that only on rare occasion will a health care operator not be effected by this mandate.
The regulation governs the use and disclosure of individual, identifiable health information that has been electronically transmitted or maintained by a health......
