What is HIPAA & how does it protect Medical Records & Patient’s Data in the Health Care Sector?

Manuela Willbold

The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that provides standards for electronic health records. Among other things, it sets restrictions on how providers can share their patients’ medical records and what insurance plans are required to provide coverage for.

What Are Covered Entities Under HIPAA?what-are-covered-entities-under-hipaa

Certain laws and regulations must be followed for HIPAA compliance. A person, institution, or organization that is required to comply with HIPAA is known as a covered entity. There are three types of covered entities at the moment:

1. Health Plans


An individual or group plan that offers or pays for medical treatment, with certain limitations. Health insurance firms, HMOs (Health Maintenance Organizations), employer-sponsored health plans, and government-funded healthcare programs are among these institutions. Medicare, Medicaid, veterans’ and military health programs are all examples of this.

2. Healthcare Providershealthcare-providers-is-covered-entities-under-hipaa

A service provider, a medical or health-care professional, or any other person or organization who provides, invoices, or gets reimbursed for health-care services in the ordinary course of business.

This includes every healthcare provider who electronically communicates health record information in conjunction with specific transactions, regardless of size, including institutional providers such as hospitals and non-institutional providers such as doctors, dentists, and other practitioners.

3. Healthcare Clearinghouseshealthcare-clearinghouses-is-covered-entities-under-hipaa

A billing service, repricing firm, community health management information system or community health information system, and “value-added” networks are examples of public or private entities.

What is considered a Business Associate?

what-is-business-associate-and-how-does-it-protect-patient’s-dataA person or organization who performs or aids in the execution of a function or activity involving the use or disclosure of personally identifiable health information on behalf of a covered entity, such as data analysis, claims processing or administration, utilization review, and quality assurance reviews, or any other business performance or activity governed by the HIPAA Administrative Simplification Rules, including the Privacy Rule, on behalf of a covered entity.

Persons or entities providing legal, actuarial, accounting, consulting, data aggregation, management, administrative, accreditation, or financial services to or for a covered entity that require the covered entity or another business associate of the covered entity to disclose individually identifiable health information to that person or entity are considered business associates. One of a covered entity’s business partners is not a member of its workforce. A covered entity may work with another covered entity as a business partner.

What is a Business Associate Agreement?

what-is-a-business-associate-agreement-in-hipaaA BAA is a HIPAA-compliant written contract between a covered organization and a business partner. This contract must have at least ten different clauses. Although third-party administrators are not protected entities, they may be considered business associates.

Employers may or may not be included in the definition of a covered entity. They will be deemed a covered organization if they have particular wellness initiatives, employee assistance programs, medical reimbursement accounts, self-funded or managed health insurance coverage for workers, or an onsite clinic.

HIPAA Compliance for Covered Entities


hipaa-compliance-for-covered-entities-to-protect-patient’s-dataAlthough there are no specific requirements to document the process, it is generally necessary to assign a lead role to ensure all documentation exists and complies with applicable laws and regulations. This way, the proper parties can be identified, and accountability can be achieved.

As part of its compliance efforts, an organization must establish HIPAA-compliant policies, procedures, and standards. Such policies should outline the organization’s responsibilities around implementing the HIPAA privacy rule.’

HIPAA Privacy Rule

hipaa-privacy-rule-to-protect-patient’s-dataThis amendment to the law established guidelines for the use of PHI and the rights of people to access their medical records. The Privacy Rule created criteria for ‘Notice of Privacy Practices,’ which all covered organizations must publish and give to patients and customers.

HIPAA Security Rule

hipaa-security-rule-to-protect-patient’s-dataThis is a new amendment to the rule that establishes guidelines for the electronic transfer, storage, and use of personal health information (PHI). The Security Rules also provide guidelines for PHI access through computers and networks.

HIPAA Breached Notification Rulehipaa-breached-notification-rule-to-protect-patient’s-data

The Breach Notification Rule establishes particular processes and reporting requirements for covered companies in the case of a data breach. The regulation distinguishes between two types of breaches: small (affecting fewer than 500 people) and significant (affecting more than 500 people) (more than 500 individuals affected).

Penalties for Noncompliance with HIPAA Rules

penalties-for-noncompliance-with-hipaa-rulesHIPAA Rules must be followed by covered entities and business associates that have signed a BAA with a covered entity. Financial fines might be imposed if you fail to comply with any component of HIPAA. A HIPAA violation has a maximum penalty of $50,000 per occurrence, up to $1.5 million per violation category, each year.

Multi-million-dollar penalties may be imposed if HIPAA infractions have been allowed to remain for many years or if several violations of HIPAA Rules have been detected. Certain HIPAA infractions may also result in criminal consequences.


The goal of HIPAA is a more secure and efficient health care system, which would include better access to data and a more complete record of the patient’s medical history. The original concept of HIPAA was to consolidate the privacy rights of individuals under a single law that would ensure access to this information with reasonable safeguards. It was also intended to protect all individuals against identity theft as well as safeguard their health records.

The penalties for non-compliance with the HIPAA Rules are severe. Organizations should take advantage of the knowledge and expertise of professionals in the healthcare industry, such as health law attorneys, to ensure compliance with these laws.

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