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The Health Insurance Portability and Accountability Act of 1996 (HIPAA) was passed by Congress to reform the insurance market and simplify healthcare administrative processes. This legislation consists of numerous provisions; however, physicians and other healthcare providers are most affected by the Act’s Administrative Simplification provisions.
The Administrative Simplification provisions—which are designed to reduce administrative costs and burdens in the healthcare industry by adopting and requiring the use of standardized, electronic transmission of administrative and financial data—include the “Standards for Privacy of Individually Identifiable Health Information” (Privacy Rule) and “Health Insurance Reform: Security Standards” (Security Rule).
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