Guide to HIPAA

Penalties for HIPAA Violations

HIPAA calls for civil and criminal penalties for privacy and security violations, including: fines up to $25K for multiple violations of the same standard in a calendar year fines up to $250K and/or imprisonment up to 10 years for knowing misuse of individually identifiable health information.

Title II of HIPAA

Known as the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.

The Enforcement Rule

On February 16, 2006, HHS issued the Final Rule regarding HIPAA enforcement. It became effective on March 16, 2006. The Enforcement Rule sets civil money penalties for violating HIPAA rules and establishes procedures for investigations and hearings for HIPAA violations; however, its deterrent effects seem to be negligible with few prosecutions for violations. [1]

Title I of HIPAA

Protects health insurance coverage for workers and their families when they change or lose their jobs.

The Administration Simplification provisions (AS)

The Administration Simplification provisions also address the security and privacy of health data. The standards are meant to improve the efficiency and effectiveness of the nation's health care system by encouraging the widespread use of electronic data interchange in the U.S. health care system.

HITECH Act: Privacy Requirements

Subtitle D of the Health Information Technology for Economic and Clinical Health Act (HITECH Act), enacted as part of the American Recovery and Reinvestment Act of 2009, and addresses the privacy and security concerns associated with the electronic transmission of health information. This subtitle extends the complete Privacy and Security Provisions of HIPAA to business associates of covered entities. This includes the extension of newly updated civil and criminal penalties to business associates. These changes are also required to be included in any business associate agreements with covered entities. On November 30, 2009, the regulations associated with the new enhancements to HIPAA enforcement took effect[27]. Another significant change brought about in Subtitle D of the HITECH Act, is the new breach notification requirements. This imposes new notification requirements on covered entities, business associates, vendors of personal health records (PHR) and related entities if a breach of unsecured protected health information (PHI) occurs. On April 27, 2009, the Department of Health and Human Services (HHS) issued guidance on how to secure protected health information appropriately[28]. Both HHS and the Federal Trade Commission (FTC) were required under the HITECH Act to issue regulations associated with the new breach notification requirements. The HHS rule was published in the Federal Register on August 24, 2009[29], and the FTC rule was published on August 25, 2009[30]. The final significant change made in Subtitle D of the HITECH Act, implements new rules for the accounting of disclosures of a patient's health information. It extends the current accounting for disclosure requirements to information that is used to carry out treatment, payment and health care operations when an organization is using an electronic health record (EHR). This new requirement also limits the timeframe for the accounting to three years instead of six as it currently stands. These changes won't take effect until January 1, 2011, for organizations implementing EHRs between January 1, 2009 and January 1, 2011, and January 1, 2013, for organizations who had implemented an EHR prior to January 1, 2009.

Five rules regarding Administrative Simplification:

the Privacy Rule the Transactions and Code Sets Rule the Security Rule the Unique Identifiers Rule the Enforcement Rule

The Unique Identifiers Rule (National Provider Identifier)

HIPAA covered entities such as providers completing electronic transactions, healthcare clearinghouses, and large health plans, must use only the National Provider Identifier (NPI) to identify covered healthcare providers in standard transactions by May 23, 2007. Small health plans must use only the NPI by May 23, 2008. Effective from May 2006 (May 2007 for small health plans), all covered entities using electronic communications (e.g., physicians, hospitals, health insurance companies, and so forth) must use a single new NPI. The NPI replaces all other identifiers used by health plans, Medicare (i.e., the UPIN), Medicaid, and other government programs. However, the NPI does not replace a provider's DEA number, state license number, or tax identification number. The NPI is 10 digits (may be alphanumeric), with the last digit being a checksum. The NPI cannot contain any embedded intelligence; in other words, the NPI is simply a number that does not itself have any additional meaning. The NPI is unique and national, never re-used, and except for institutions, a provider usually can have only one. An institution may obtain multiple NPIs for different "subparts" such as a free-standing cancer center or rehab facility.

HIPAA

Health Insurance Portability and Accountability Act

Administrative Safeguards

Policies and procedures designed to clearly show how the entity will comply with the act Covered entities (entities that must comply with HIPAA requirements) must adopt a written set of privacy procedures and designate a privacy officer to be responsible for developing and implementing all required policies and procedures. The policies and procedures must reference management oversight and organizational buy-in to compliance with the documented security controls. Procedures should clearly identify employees or classes of employees who will have access to electronic protected health information (EPHI). Access to EPHI must be restricted to only those employees who have a need for it to complete their job function. The procedures must address access authorization, establishment, modification, and termination. Entities must show that an appropriate ongoing training program regarding the handling of PHI is provided to employees performing health plan administrative functions. Covered entities that out-source some of their business processes to a third party must ensure that their vendors also have a framework in place to comply with HIPAA requirements. Companies typically gain this assurance through clauses in the contracts stating that the vendor will meet the same data protection requirements that apply to the covered entity. Care must be taken to determine if the vendor further out-sources any data handling functions to other vendors and monitor whether appropriate contracts and controls are in place. A contingency plan should be in place for responding to emergencies. Covered entities are responsible for backing up their data and having disaster recovery procedures in place. The plan should document data priority and failure analysis, testing activities, and change control procedures. Internal audits play a key role in HIPAA compliance by reviewing operations with the goal of identifying potential security violations. Policies and procedures should specifically document the scope, frequency, and procedures of audits. Audits should be both routine and event-based. Procedures should document instructions for addressing and responding to security breaches that are identified either during the audit or the normal course of operations.

The Security Rule

The Final Rule on Security Standards was issued on February 20, 2003. It took effect on April 21, 2003 with a compliance date of April 21, 2005 for most covered entities and April 21, 2006 for "small plans". The Security Rule complements the Privacy Rule. While the Privacy Rule pertains to all Protected Health Information (PHI) including paper and electronic, the Security Rule deals specifically with Electronic Protected Health Information (EPHI). It lays out three types of security safeguards required for compliance: administrative, physical, and technical. For each of these types, the Rule identifies various security standards, and for each standard, it names both required and addressable implementation specifications. Required specifications must be adopted and administered as dictated by the Rule. Addressable specifications are more flexible. Individual covered entities can evaluate their own situation and determine the best way to implement addressable specifications. Some privacy advocates have argued that this "flexibility" may provide too much latitude to covered entities. [26] The standards and specifications are as follows: Administrative Safeguards Physical Safeguards Technical Safeguards

The Transactions and Code Sets Rule

The HIPAA/EDI provision was scheduled to take effect from October 16, 2003 with a one-year extension for certain "small plans". However, due to widespread confusion and difficulty in implementing the rule, CMS granted a one-year extension to all parties.[citation needed] On January 1, 2012 the newest version 5010 becomes effective, replacing the version 4010.[25] This allows for the larger field size of ICD-10-CM as well as other improvements. After July 1, 2005 most medical providers that file electronically did have to file their electronic claims using the HIPAA standards in order to be paid.[citation needed] Key EDI(X12) transactions used for HIPAA compliance are: EDI Health Care Claim Transaction set (837) EDI Retail Pharmacy Claim Transaction (NCPDP Telecommunications Standard version 5.1) EDI Health Care Claim Payment/Advice Transaction Set (835) EDI Benefit Enrollment and Maintenance Set (834) EDI Payroll Deducted and other group Premium Payment for Insurance Products (820) EDI Health Care Eligibility/Benefit Inquiry (270) EDI Health Care Eligibility/Benefit Response (271) EDI Health Care Claim Status Request (276) EDI Health Care Claim Status Notification (277) EDI Health Care Service Review Information (278) EDI Functional Acknowledgement Transaction Set (997)

Health Insurance Portability and Accountability Act

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 (P.L.104-191) [HIPAA] was enacted by the U.S. Congress in 1996. It was originally sponsored by Sen. Edward Kennedy (D-Mass.) and Sen. Nancy Kassebaum (R-Kan.). According to the Centers for Medicare and Medicaid Services (CMS) website, Title I of HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs. Title II of HIPAA, known as the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers.

The Privacy Rule

The Privacy Rule took effect on April 14, 2003The HIPAA Privacy Rule regulates the use and disclosure of certain information held by "covered entities" (generally, health care clearinghouses, employer sponsored health plans, health insurers, and medical service providers that engage in certain transactions.)[10] It establishes regulations for the use and disclosure of Protected Health Information (PHI). PHI is any information held by a covered entity which concerns health status, provision of health care, or payment for health care that can be linked to an individual.[11] This is interpreted rather broadly and includes any part of an individual's medical record or payment history. Covered entities must disclose PHI to the individual within 30 days upon request.[12] They also must disclose PHI when required to do so by law, such as reporting suspected child abuse to state child welfare agencies.[13] A covered entity may disclose PHI to facilitate treatment, payment, or health care operations,[14] or if the covered entity has obtained authorization from the individual.[15] However, when a covered entity discloses any PHI, it must make a reasonable effort to disclose only the minimum necessary information required to achieve its purpose.[16] The Privacy Rule gives individuals the right to request that a covered entity correct any inaccurate PHI.[17] It also requires covered entities to take reasonable steps to ensure the confidentiality of communications with individuals.[18] For example, an individual can ask to be called at his or her work number, instead of home or cell phone number. The Privacy Rule requires covered entities to notify individuals of uses of their PHI. Covered entities must also keep track of disclosures of PHI and document privacy policies and procedures.[19] They must appoint a Privacy Official and a contact person[20] responsible for receiving complaints and train all members of their workforce in procedures regarding PHI.[21]

Title I: Health Care Access, Portability, and Renewability

Title I of HIPAA regulates the availability and breadth of group health plans and certain individual health insurance policies. It amended the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code. Title I also limits restrictions that a group health plan can place on benefits for preexisting conditions. Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment.[1] However, individuals may reduce this exclusion period if they had group health plan coverage or health insurance prior to enrolling in the plan. Title I allows individuals to reduce the exclusion period by the amount of time that they had "creditable coverage" prior to enrolling in the plan and after any "significant breaks" in coverage.[2] "Creditable coverage" is defined quite broadly and includes nearly all group and individual health plans, Medicare, and Medicaid.[3] A "significant break" in coverage is defined as any 63 day period without any creditable coverage.[4]

Title II: Preventing Health Care Fraud and Abuse; Administrative Simplification; Medical Liability Reform

Title II of HIPAA defines numerous offenses relating to health care and sets civil and criminal penalties for them. It also creates several programs to control fraud and abuse within the health care system.[5][6][7] However, the most significant provisions of Title II are its Administrative Simplification rules. Title II requires the Department of Health and Human Services (HHS) to draft rules aimed at increasing the efficiency of the health care system by creating standards for the use and dissemination of health care information. These rules apply to "covered entities" as defined by HIPAA and the HHS. Covered entities include health plans, health care clearinghouses, such as billing services and community health information systems, and health care providers that transmit health care data in a way that is regulated by HIPAA.[8][9] Per the requirements of Title II, the HHS has promulgated five rules regarding Administrative Simplification: the Privacy Rule, the Transactions and Code Sets Rule, the Security Rule, the Unique Identifiers Rule, and the Enforcement Rule.

Technical Safeguards

controlling access to computer systems and enabling covered entities to protect communications containing PHI transmitted electronically over open networks from being intercepted by anyone other than the intended recipient. Information systems housing PHI must be protected from intrusion. When information flows over open networks, some form of encryption must be utilized. If closed systems/networks are utilized, existing access controls are considered sufficient and encryption is optional. Each covered entity is responsible for ensuring that the data within its systems has not been changed or erased in an unauthorized manner. Data corroboration, including the use of check sum, double-keying, message authentication, and digital signature may be used to ensure data integrity. Covered entities must also authenticate entities with which they communicate. Authentication consists of corroborating that an entity is who it claims to be. Examples of corroboration include: password systems, two or three-way handshakes, telephone callback, and token systems. Covered entities must make documentation of their HIPAA practices available to the government to determine compliance. In addition to policies and procedures and access records, information technology documentation should also include a written record of all configuration settings on the components of the network because these components are complex, configurable, and always changing. Documented risk analysis and risk management programs are required. Covered entities must carefully consider the risks of their operations as they implement systems to comply with the act. (The requirement of risk analysis and risk management implies that the act's security requirements are a minimum standard and places responsibility on covered entities to take all reasonable precautions necessary to prevent PHI from being used for non-health purposes.)

Physical Safeguards

controlling physical access to protect against inappropriate access to protected data Controls must govern the introduction and removal of hardware and software from the network. (When equipment is retired it must be disposed of properly to ensure that PHI is not compromised.) Access to equipment containing health information should be carefully controlled and monitored. Access to hardware and software must be limited to properly authorized individuals. Required access controls consist of facility security plans, maintenance records, and visitor sign-in and escorts. Policies are required to address proper workstation use. Workstations should be removed from high traffic areas and monitor screens should not be in direct view of the public. If the covered entities utilize contractors or agents, they too must be fully trained on their physical access responsibilities.