The Health Insurance Portability and Accountability Act of 1996, also known as “HIPAA,” is the most significant development in U.S. health care in recent history.

Enacted by Congress on August 21, 1996, HIPAA’s initial purpose was to ensure and improve the continuity of health insurance coverage for workers changing jobs. To facilitate this objective however, HIPAA included “Administrative Simplification” provisions that mandated the Department of Health and Human Services (HHS) to adopt national standards for the transmission and protection of health information. The resulting national standards are far-reaching in scope, causing HIPAA to affect nearly every aspect of the U.S. health care system.

In response to the HIPAA mandate, HHS adopted and published the following national standards for the transmission and protection of health information. These HIPAA standards are applicable to all health plans, health care clearinghouses, and health care providers, which the HIPAA statute defines as covered entities.

HHS HIPAA Administrative Simplification

National Provider Identifier (NPI)

Effective Date: 5/23/2005

Establishes national standards for a single and unique identifier for all health care providers. When implemented, all provider will use the NPI for all healthcare transactions. The NPI facilitates the effective and efficient coordination of benefits between covered entities.


Effective Date: 4/21/2003

Establishes national standards for the security of electronic health information. Outlines administrative, technical and physical security procedures for covered entities to ensure the confidentiality, integrity and availability of electronic protected health information.


Effective Date: 4/14/2001

Establishes national privacy protection standards for health information, in all forms, created or maintained by covered entities (health plans, health care clearinghouses, and health care providers).

Transactions & Code Sets

Effective Date: 10/16/2000

Establishes national standards for the electronic transfer of information within the health care system. Allows covered entities to exchange electronic medical, billing, benefits, claims and other information in a standard format that is both fast and cost effective. Health organizations must adopt standard code sets to be used in health transactions. Coding systems that describe diseases, injuries, and other health problems, as well as their causes, symptoms, and actions taken must become uniform.