administrative simplification (HIPAA)

Formally, the name of Title II, Subtitle F of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which states:

It is the purpose of this subtitle to improve the Medicare program under title XVIII of the Social Security Act, the Medicaid program under title XIX of such Act, and the efficiency and effectiveness of the health care system, by encouraging the development of a health information system through the establishment of standards and requirements for the electronic transmission of certain health information.

Sections of this subtitle give the Secretary of the Department of Health and Human Services (DHHS) the authority to mandate standardized electronic data interchange (EDI) in order to reduce the administrative costs associated with healthcare operations.

Specifically, DHHS is authorized to require:

  • privacy and security standards for entities that generate or use health information.

Although the legislative text seems to put efficiency first, DHHS has itemized the relative priorities of administrative simplification differently in the preamble to its final privacy rules (28 December 2000):

  • to protect and enhance the rights of consumers by providing them access to their health information and controlling the inappropriate use of that information;
  • to improve the quality of health care in the U.S. by restoring trust in the health care system among consumers, health care professionals, and the multitude of organizations and individuals committed to the delivery of care; and
  • to improve the efficiency and effectiveness of health care delivery by creating a national framework for health privacy protection that builds on efforts by states, health systems, and individual organizations and individuals.

"In enacting HIPAA," the preamble continues, "Congress recognized the fact that administrative simplification cannot succeed if we do not also protect the privacy and confidentiality of personal health information. The provision of high-quality health care requires the exchange of personal, often-sensitive information between an individual and a skilled practitioner. Vital to that interaction is the patient's ability to trust that the information shared will be protected and kept confidential."

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   © 2002-2006 Contributing authors and University of Miami School of Medicine