HIPAA Overview

Each time a patient sees a doctor, is admitted to a hospital, goes to a pharmacist or sends a claim to a health plan a record is made of their confidential health information. In the past, family doctors and other healthcare providers protected the confidentiality of those records by storing them in file cabinets and refusing to reveal them to anyone else. The use and disclosure of this information was protected by a patchwork of state laws, leaving gaps in the protection of patients' privacy and confidentiality.

Congress recognized the need for national patient record privacy standards in 1996 and enacted the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This law includes provisions designed to save money for healthcare businesses by encouraging electronic transactions. But it also requires new safeguards to protect the security and confidentiality of that information. The law gave Congress until August 21, 1999 to pass comprehensive health privacy legislation. Because Congress did not enact such legislation by the deadline the law then required the Department of Health and Human Services (HHS) to craft such protections by regulation.

In November 1999 HHS published proposed regulations. During an extended comment period HHS received more than 52,000 communications. In December 2000 HHS issued a final rule that made significant changes to address issues raised by the comments. To ensure that the provisions of the final rule would protect patients' privacy, without creating unanticipated consequences that might harm patients' quality of or access to care, HHS Secretary Thompson opened the final rule for comment for 30 days. After that comment period President Bush and Secretary Thompson decided to allow the rule to take effect on April 14, 2001, as scheduled, and make any appropriate changes in the next year to clarify the requirements and correct potential problems.

Compliance Schedule
The final rule took effect on April 14, 2001. Most covered entities had two years - until April 14, 2003 - to comply with the final rule's provisions. The law gave HHS the authority to make appropriate changes to the rule prior to the compliance date.

Covered Entities
The regulation covers health plans, healthcare clearing houses and healthcare providers who conduct certain financial and administrative transactions electronically (e.g., electronic billing, funds transfers). Self-administered employee health benefit plans and plans with fewer than 50 participants are excluded.

Information Protected
All medical records and other individually identifiable health information used or disclosed by a covered entity in any form, whether electronically, on paper or orally, are covered by the final rule.

Consumer Control Over Health Information
Patients will have significant new rights to understand and control how their health information is used.

• Patient education on privacy protections - Providers and health plans will be required to give patients a clear written explanation of how the covered entity may use and disclose their health information.
• Ensuring patient access to their medical records - Patients will be able to see and obtain copies of their records and request amendments. A history of non-routine disclosures must be made accessible to patients.
• Receiving patient consent before information is released - Healthcare providers who see patients will be required to obtain patient consent before sharing their information for treatment, payment and healthcare operations. Separate patient authorization must be obtained for non-routine disclosures and most non-healthcare purposes. Patients will have the right to request restrictions on the uses and disclosures of their information.
• Providing recourse if privacy protections are violated - People will have the right to file a formal complaint with a covered provider or health plan or with HHS about violations of the provisions of the rule or the policies and procedures of the covered entity.

Boundaries on Medical Records Use and Release
With few exceptions, such as appropriate law enforcement needs, an individual's health information may only be used for health purposes.

• Ensuring that health information is not used for non-health purposes - Health information covered by the rule generally may not be used for purposes not related to healthcare, such as disclosures to employers to make personnel decisions or to financial institutions, without explicit authorization from the individual.
• Providing the minimum amount of information necessary - In general, disclosures of information will be limited to the minimum necessary for the purpose of the disclosure. However, this provision does not apply to the disclosure of medical records for treatment purposes if physicians, specialists and other providers need access to the full record to provide quality care.

Security of Personal Information
Privacy safeguard standards are established that covered entities must meet, but covered entities have the flexibility to design their own policies and procedures to meet those standards. The requirements are flexible and scalable to account for the nature of each entity's business and its size and resources. Covered entities generally will have to

• Adopt written privacy procedures - These include who has access to protected information, how it will be used within the entity and when the information may be disclosed. Covered entities must ensure that their business associates protect the privacy of health information.
• Train employees and designate a privacy officer - Covered entities will need to train their employees in their privacy procedures and must designate an individual responsible for compliance.

Accountability for Medical Records Use and Release
Penalties are provided for covered entities that misuse personal health information.

• Civil penalties - Health plans, providers and clearing houses that violate these standards will be subject to civil liability. Civil penalties are $100 per violation, up to $25,000 per person, per year for each requirement or prohibition violated.
• Federal criminal penalties - Criminal penalties for knowingly violating patient privacy are
  • Up to $50,000 and one year in prison for obtaining or disclosing protected health information
  • Up to $100,000 and five years in prison for obtaining protected health information under "false pretenses"
  • Up to $250,000 and 10 years in prison for obtaining or disclosing protected health information with the intent to sell, transfer or use it for commercial advantage, personal gain or malicious harm

Public Responsibility vs Privacy Protections
In limited circumstances the final rule permits, but does not require, covered entities to continue certain existing disclosures of health information without individual authorization for specific public responsibilities

• Emergency circumstances
• Identification of the body of a deceased person or the cause of death
• Public health needs
• Research, generally limited to when a waiver of authorization is independently approved by a privacy board or Institutional Review Board
• Oversight of the healthcare system; judicial and administrative proceedings
• Limited law enforcement activities
• Activities related to national defense and security

All of these disclosures could occur today under existing laws and regulations, although the privacy rule generally establishes new safeguards and limits. If there is no other law requiring that information be disclosed, covered entities will use their professional judgments to decide whether to disclose any information, reflecting their own policies and ethical principles.

Special Protection for Psychotherapy Notes
Psychotherapy notes (used only by a psychotherapist) are held to a higher standard of protection because they are not part of the medical record and are never intended to be shared. All other personal health information is considered to be sensitive and protected consistently under this rule.

Equivalent Requirements for Government Entities
The provisions of the final rule generally apply equally to private sector and public sector entities. For example, both private hospitals and government medical units have to comply with the full range of requirements, such as providing notice, access rights and requiring consent for routine uses.

Cost of Implementation
The final rule projected the implementation costs at $17.6B over 10 years - a figure offset by $29.9B in projected savings under the final electronic transactions regulation issued in August 2000.

Preserving Existing State Laws
As required by the HIPAA law itself stronger state laws (like those covering mental health, HIV infection and AIDS information) continue to apply. These confidentiality protections are cumulative - the final rule set a national "floor" of privacy standards that protect all Americans, but in some states individuals enjoy additional protection. In circumstances where states require certain disclosures of health information the final rule does not preempt these mandates.

Compliance and Enforcement
The final rule will be enforced by the HHS Office for Civil Rights (OCR). Before covered entities must comply with the rule OCR will provide assistance to providers, plans and health clearing houses in meeting the requirements of the regulation, including a toll-free line to help answer questions, 866-627-7748, TTY 866-788-4989.

Links

• Official website for the regulation
• List of common Healthcare Acronyms
• Glossary of Healthcare Terms