HIPAA History, Rules and Regulations

HIPAA in ediIn 1996, President Clinton responded to the need for more efficient healthcare services at lower costs. The solution was signing into law the Kennedy-Kassebaum Act. This act is also known as Health Insurance Portability and Accountability Act (HIPAA). It makes standards for healthcare EDI under the rules of the Department of Health.

With the establishing of WEDI in 1991, standards were set for the transfer of healthcare data. It has since been made obligatory for these standards to be met across the healthcare industry. The use of these standards has been a gradual process. It was not until the year 2001 when doctors, hospitals, health plans and clearinghouses begin the process of using the new EDI standards. The new legislation impacts on all data transmission within the healthcare sector. But the greatest impact has been seen in the area of security. The effects of applying the standards felt throughout the entire healthcare industry.

The healthcare industry is very much lagging behind when it comes to the utilizing of technology’s benefits. Unlike the financial services, retail and logistics industries, the healthcare industry’s focus on service provision has resulted in a failure. It was an attempt to take advantage of the benefits of industry-wide standardization. Technology has remained an under-used resource in the healthcare industry. It made use of only where absolutely necessary. This lack of unified principles has resulted in difficulties with communication between healthcare companies.

It seems that the new EDI standards have the potential to promote all aspects of the healthcare industry. Until now, each area of work required personnel with the time and experience to work with complex and time-intensive systems. These systems may include an average of 400 medical form ‘standards’. This type of labour not only demands a large of amount of time and training. It also creates a high risk of problems arising from ‘human errors’. Under HIPAA, health care providers with a staff of 25 or more must use HIPAA-defined transactions in ANSI ASC X12N and NCPDP standard formats. Conversely, Medicare mandates that all Medicare claims be submitted using ANSI ASC X12N and NCPDP standard formats.

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