Question

Describe the purpose of the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA).

Answer 1

Answer:

Introduction:

The Health Insurance Portability and Accountability Act HIPAA is a federal law passed in 1996 with an aim to create uniform national standards across the United States for sharing of health information in order to protect the privacy and security of the patient's health information without violation of the patient's rights / patient’s privacy regarding the disclosure of his/her personal health/ medical information without his/her knowledge or consent..

In order that the patient's information is handled securely and patient's privacy is maintained, the process of administration regarding health information,health data storage and transfer,insurance claims and billings,health care plan provisions, needs to be simplified. This is known as the administrative simplification process of Health Insurance Portability and Accountability Act.

The HIPAA administrative simplification provisions include the use of electronic transactions,standard codes,code sets,operating rules and unique identifiers for the purpose of exchange of information in the healthcare settings across the United States.

The main provisions for Health Insurance Portability and Accountability Act's administrative simplification processes include

1.Electronic transactions of health Information and finances including electronic health information transfer, electronic payments, electronic insurance claim settlements ,online fund transfer and billings.

2.Exchange of data using standard code sets which are standardized for procedures ICD PCS,outpatient diagnosis ICD CM, HCPCS,codes for dental procedures and national drug codes NCD throughout the United States

3.Use of standard national unique identifier codes for the providers of the health insurance which is a 10 digit code ,as well as code for the employers throughout the United States.The use of Health plan identifier HPID, employer identification number EIN,  National provider identifier NPI Is mandated to be used on all the transactions

4.Implementation of the operating rules which are the standard rules and procedures that have to be followed in the electronic exchange of the health information and electronic transactions.

The purpose of these provisions is to simplify the administrative processes governing health information storage and transfer, insurance claims and billing purposes thereby allowing for faster and secure transfer of health information between individuals.

These purposes of the administrative simplification provisions of HIPAA can be described as listed below:

1.To enable the consistency of information for sharing the patient information using the operating rules ,standard electronic transactions, use of codes/code sets and unique identifiers.

2.To decrease the paperwork involved and switch to electronic forms of data maintenance, storage, handling and transfer thereby decreasing the costs and the related administrative burden involved and achieving uniform standards.

3.To regulate and standardize health information exchange by quick movement of information thereby obtaining timely information regarding the patient's insurance coverages and the patient's health care plan benefits giving providers more time to provide quality patient care.

4.To promote greater transparency in the billings and Insurance claim processes by ensuring consistency and decreasing the uncertainty by providing standardized information and faster settling of the claims.

5.To ensure better predictability regarding the health plans and insurance claims by enabling quick and real time responses from the health insurance providers.

6. To decrease the administrative and labor costs and improve the speed of the revenue cycle by eliminating inconsistency,lack of standardized Information and time consuming paperwork

7.To establish uniform standards for protection of the privacy of health information of individuals.

8.To regulate the security standards pertaining to privacy of health information.

Conclusion:

Thus,the administrative simplification processes of HIPAA serve the purpose  to standardize and simplify the handling of health information ensuring its privacy and security, electronize health information and financial transactions decreasing the  paperwork costs and labor and streamline health care related business processes across the United States healthcare system