Why Is HIPAA Compliant Billing So Important?

HIPAA Compliant Medical Billing Software is software that is Health Insurance Portability and Accountability Act of 1996 (HIPAA) compliant. The HIPAA is a comprehensive federal protective act which seeks to ensure that a patient’s personal health information is kept strictly private.

All healthcare practice management software must be HIPAA-compliant by law, including medical billing and coding software. This means that when you are sourcing medical billing and coding software for your practice you need to ensure that you only look at HIPAA Compliant Medical Billing Software.

Virtually everything is being done electronically these days, including keeping patients’ medical records and full medical histories and information on the Internet. This makes it easy for information to be passed on between various medical professionals, and it also makes medical coding and billing a cinch, but as we all know there are some people whose greatest kick is hacking into various systems just because they love the challenge.

Personal medical history is just that, personal. Nobody wants their personal information to be available for anyone to read and access, as that could be embarrassing, could lead to various forms of identity theft, and could even lead to job losses in some extreme cases. This is why Congress required the development of privacy regulations and the federal government formulated rules and regulations to govern the storage of electronic health records under the guise of the Health Insurance Portability and Accountability Act of 1996 and insists that all medical software and medical billing software is HIPAA compliant, in order to protect patients personal information.

Why Was HIPAA Formulated?

The Health Insurance Portability and Accountability Act of 1996 came into being because there was a need to make personal healthcare information portable so that when people moved about, whether within the United States or overseas, their medical information and history could be accessed easily and safely if required in the case of a medical emergency. The problem with making this kind of information portable and available is twofold; the opportunity for undesirables to get hold of very personal information and the fact that such information needed to be captured and stored in a uniform manner so that it could be accessed widely by those requiring it for medical or billing purposes.

So, with the healthcare profession requiring portability and accessibility and Congress requiring that the confidentiality of such protected electronic health records was maintained, it was necessary to legislate the use of uniform electronic transactions and various other administrative measures. These two factors played off each other and lead to new HIPAA Compliant Medical Billing Software and medical coding software being designed to ensure uniformity in data capture and reporting whilst protecting the security of the data.

The HIPPA contains seven sets of rules that will affect your medical practice, a list of which was issued by the Department of Health and Human Services (DHHS) in the form of the “Notice of Proposed Rule Making” (NPRM). Every medical practice is obliged to comply with the HIPAA security, privacy, and transactional regulations, no matter the size of the practice, and must also adhere to all subsequent regulations, including the need for HIPAA Compliant Medical Billing Software.

Who Must Follow HIPAA Rules?

HIPAA regulations apply to all “covered entities” which include:

  • Health Care Clearinghouses – these are entities that process non-standard health information they receive from another entity into standard electronic format or data content, such as HIPAA Compliant Medical Billing Software, or vice versa.
  • Health Plans – this includes HMOs, company health plans, health insurance companies, and various government programs that pay for health care, such as Medicare and Medicaid.
  • Most Health Care Providers – this includes all entities that conduct certain business electronically, such as electronically billing your health insurance, and includes most psychologists, chiropractors, clinics, hospitals, nursing homes, doctors, pharmacies and dentists.

HIPAA Regulations regarding Medical Billing Software

When it comes to medical billing, HIPAA has some very rigid rules and regulations as to medical billing software, which is why it is important that you only use HIPAA Compliant Medical Billing Software. The rules mandate that there be strict privacy and security measures in place to negate the possibility of sensitive medical data falling into the wrong hands. The regulations also govern the way that the medical billing systems generate, store and transmit data, which brings much-needed uniformity into the industry. Medical billing software needs to comply 100% with all standards set by the HIPAA in order to be declared and certified as HIPAA Compliant Medical Billing Software.

HIPAA rules are divided into four sections:

  • Administrative Safeguards
  • Physical Safeguards
  • Security Services
  • Security Mechanisms

The two main areas influenced by the HIPAA are the medical billing software and practice management software, and the two main regulations that pertain to this software are:

The Privacy Rule

This rule is also known as Standards for Privacy of Individually Identifiable Health Information, and serves to establish national standards for the protection of certain health information.

The Security Rule

This is also know as the Security Standards for the Protection of Electronic Protected Health Information, and serves to establish a national set of security standards for protecting certain health information that is stored or transferred in electronic form.

The protections contained in the Privacy Rule are operationalized by the Security Rule addressing both the non-technical and technical safeguards that organizations called “covered entities” need to put in place in order to secure an individual’s “electronic protected health information” (e-PHI).

Within the U.S. Department of Health and Human Services, it is the Office for Civil Rights (OCR) that is responsible for enforcing the Privacy and Security Rules with voluntary compliance activities and civil money penalties.

Key elements of the Security Rule

The main goal of the Security Rule is to protect the privacy of every individual’s health information whilst permitting covered entities to adopt new technologies that will improve the efficiency and quality of patient care. The Security Rule is designed to be scalable and flexible so as to allow a covered entity to implement policies, procedures, and technologies appropriate to the entity’s particular size, its organizational structure, and risks to patients’ e-PHI. The Security Rule applies to all covered entities.

Entities regulated by the Privacy and Security Rules must comply with all of the applicable requirements, including ensuring that they use only HIPAA Compliant Medical Billing Software.

What follows is a very brief summary of the Security Rule, and meant only to give some idea of what is involved; please refer to the entire Rule for full information:

General Rules

The Security Rule requires that covered entities maintain reasonable and appropriate physical, technical, and administrative safeguards for protecting e-PHI, such as using HIPAA Compliant Medical Billing Software.

This means that covered entities must:

  • Ensure the integrity, confidentiality, and availability of all e-PHI they create, receive, transmit or maintain
  • Ensure full compliance by their workforce
  • Identify and protect the information against any reasonably anticipated threats to the security or integrity thereof
  • Protect the information against any reasonably anticipated, impermissible use or disclosure

Risk Analysis and Management

A risk analysis process includes but is not limited to the following:

  • Evaluating the likelihood and impact of potential risks to e-PHI;
  • Implementing appropriate security measures that address the risks that were identified in the risk analysis
  • Documenting the elected security measures and, where required, the rationale for adopting those measures
  • Maintaining reasonable, continuous, and appropriate security protection.

Administrative Safeguards

Administrative safeguards include:

  • Security Management Process
  • Security Personnel
  • Information Access Management
  • Workforce Training and Management
  • Evaluation

Physical Safeguards

Physical safeguards include:

  • Facility Access and Control
  • Workstation and Device Security

Technical Safeguards

Technical safeguards include:

  • Access Control
  • Audit Controls
  • Integrity Controls
  • Transmission Security

Organizational requirements

Organizational requirements include:

  • Covered Entity Responsibilities
  • Business Associate Contracts

A covered entity must adopt appropriate and reasonable policies and procedures that comply with all the provisions of the Security Rule, including using HIPAA Compliant Medical Billing Software.

Key elements of the Privacy Rule

The main aim of the Privacy Rule is to ensure that patients’ health information is protected in the right manner whilst still permitting the flow of health information required to provide and promote top quality healthcare, and also to protect health and well being of the public. As with the Security Rule, the Privacy Rule applies to all covered entities.

What follows is a very brief summary of the Privacy Rule, and meant only to give some idea of what is involved; please refer to the entire Rule for full information:

Protected Health Information

The Privacy Rule is aimed at protecting any and all individually identifiable health information that is either held or transmitted by a covered entity or its business associates, in any form or media, including paper, electronic, and oral.

Individually identifiable health information is classified as information that includes demographic data and relates to:

  • The past, present or future physical or mental health or condition of an individual
  • The provision of healthcare to an individual
  • Any past, present, or future payment for the provision of health care to an individual

There are no restrictions on the disclosure or use of de-identified health information.

Uses and Disclosures

There are various rules that define and limit the circumstances in which it is permissible for a covered entity to use or disclose an individual’s protected heath information, including:

  • Required Disclosures
  • Permitted Uses and Disclosures:
    • The Individual
    • Treatment, Payment, Health Care Operations
  • Uses and Disclosures with Opportunity to Agree or Object
  • Incidental Use and Disclosure
  • Public Interest and Benefit Activities
  • Limited Data Set
  • Authorized Uses and Disclosures

There are many facets to the Privacy Rule, too numerous to go into in such a short article, so it is recommended that you access the entire HIPAA Act in order to ensure that you are fully compliant, but the best way that you can ensure that you do not miss anything is to ensure that you utilize only HIPAA Compliant Medical Billing Software from a reputable company.