Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) is a U.S. federal law that sets national standards to protect health insurance coverage and to safeguard the privacy and security of individuals’ medical information. Enacted in 1996, HIPAA governs how protected health information (PHI) is used, disclosed, stored, and transmitted across the healthcare system.

What HIPAA covers

• Portability: Helps people maintain health insurance coverage when they change or lose jobs.
• Privacy: Limits how PHI—any information that can identify an individual and relates to health care—can be used and disclosed.
• Security: Requires administrative, physical, and technical safeguards for electronic protected health information (ePHI).
• Administrative simplification: Standardizes electronic transactions, code sets, and identifiers to reduce paperwork and administrative costs.
• Breach notification: Requires notification to affected individuals, the Department of Health and Human Services (HHS), and sometimes the media when unsecured PHI is breached.

Key provisions

• Privacy Rule: Defines PHI, identifies permitted uses and disclosures, and establishes patient rights (e.g., access to records, requests for amendments, and restrictions).
• Security Rule: Requires covered entities and business associates to implement safeguards to protect ePHI (risk analysis, access controls, encryption where appropriate).
• Breach Notification Rule: Sets requirements and timelines for notifying individuals and authorities after an impermissible use or disclosure of unsecured PHI.
• Enforcement Rule: Enables investigations, compliance reviews, and penalties for violations.
• Transaction and code set standards: Promote consistency in electronic health care transactions.

Who must comply

• Covered entities: Health care providers, health plans (insurers, HMOs), and health care clearinghouses that transmit health information electronically.
• Business associates: Vendors and contractors that create, receive, maintain, or transmit PHI on behalf of covered entities (e.g., billing services, cloud providers). Business associates are directly liable for certain HIPAA obligations.

Patient rights under HIPAA

Patients generally have the right to:
– Access and obtain copies of their health records.
– Request corrections or amendments to their records.
– Receive an accounting of certain disclosures of their PHI.
– Request restrictions on certain uses and disclosures and ask for confidential communications.
– Provide or revoke authorizations for most other uses and disclosures.

Enforcement and penalties

Violations of HIPAA can result in civil monetary penalties and, in serious cases, criminal prosecution. Penalties vary based on the level of negligence and can include substantial fines per violation and corrective action plans.

HITECH and electronic health information

The Health Information Technology for Economic and Clinical Health (HITECH) Act expanded HIPAA’s privacy and security protections to accelerate adoption of health information technology:
– Strengthened enforcement and increased penalties.
– Clarified breach notification requirements.
– Extended liability and direct obligations to business associates.
– Encouraged adoption of electronic health records and meaningful use of health IT.

Challenges and the future

Emerging technologies—wearables, mobile health apps, consumer genetic services, and other digital health tools—are creating new types of health-related data and distribution channels that may fall outside traditional HIPAA protections. Regulatory responses include:
– Using HIPAA’s framework as a model for rules that govern new digital health data.
– Oversight by additional agencies (e.g., Federal Trade Commission) for consumer-facing services not covered by HIPAA.
– State laws that may impose stricter privacy protections or fill gaps where federal law does not apply.

Organizations that handle health-related data must assess whether HIPAA applies, implement appropriate safeguards, and monitor evolving law and technology to manage privacy risks.

Key takeaways

• HIPAA establishes national standards for protecting health insurance portability and the privacy and security of PHI.
• It affects providers, health plans, and their business associates and governs how PHI is used, disclosed, and secured.
• The HITECH Act strengthened HIPAA for electronic data and extended obligations to business associates.
• Rapid growth of digital health tools poses ongoing challenges; additional regulation and state laws may supplement HIPAA protections.