Government Regulations

In December of 2000, Donna E. Shalala, then-Secretary of the Department of Health and Human Services, released final regulations for the protection of the privacy of Americans' personal health records.  The standards are a result of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Congress passed this extension of the Social Security Act in recognition of the need to streamline the processing of health care claims, reduce the volume of paperwork, save the U.S. health care system billions of dollars and provide better service for providers, insurers and patients.  

By definition, the "Administrative Simplification" section of HIPAA requires that all health care providers and health plans that engage in electronic administrative and financial transactions must use a single set of national standards and identifiers. In addition, electronic health information systems must meet security standards ensuring patient privacy.  Paper records must comply with the same regulations if any information will be transferred.  All health care providers and health plans have until October 2002 to meet these federal standards.

These regulations will:

• Protect and enhance the rights of consumers by providing patient access to their own health information while controlling the inappropriate use of that information

• Improve the quality of health care in the United States by restoring trust in the system among consumers and health care professionals

• 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

The creation of national standards for the exchange of patient information within the health industry will encourage the development of a health information system that fully utilizes the significant developments in the electronic transmission of medical records.  Storing and transmitting medical records electronically is cost-effective and enables doctors to make quicker and better informed decisions.  Until now, however, virtually no federal rules existed to protect the privacy of health information.  The Administrative Simplification section of HIPAA creates a framework of protection that can be strengthened in the future by both federal and state governments as health information systems continue to evolve.