What is HIPAA Law: Why You Need To Follow It

The healthcare industry is a complex world. With doctors, clinics, service providers, patients, and more, running everything smoothly can get messy without regulations. HIPAA law aims to uncomplicate a number of issues around this industry. 

In this article, you will learn what HIPAA law is, what constitutes this law, who should follow it, and what happens when you violate it.

What is HIPAA law?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a U.S. federal law that outlines the national standards related to the healthcare industry. 

Passed by the Department of Health & Human Services (HHS), its objective is threefold: standardize electronic data flow, modify healthcare insurance limitations, and protect sensitive patient information. 

HIPAA law consists of five titles:

HIPAA Title I, II, III, IV, and V. These cover health insurance for workers, ePHI guidelines, pre-medical tax spending accounts, group health plans, and life insurance policies owned by the company.  

Why should organizations follow HIPAA law?

Data breach violations in healthcare can be expensive and it did hit a record high in 2022. Despite being one of the most regulated industries in the U.S, the healthcare sector has been the biggest target for breaches for 12 consecutive years. 

Organizations are increasingly adopting cloud computing and deploying more medical endpoint devices. This has resulted in an increased attack surface. 

Patient data is worth a lot of money. This, combined with the lack of awareness among workers, outdated medical devices that create an easy entry point for attacks, and the urgency for business continuity in this sector put healthcare on top of the hit list. 

Revenue loss is not the only cause for concern – cyber attacks cause severe disruption and delay in patient care. Patients suffering from system downtime are the most affected and this downtime resonates with brand recall for healthcare service providers for a long time.

While there is no magical antidote to wipe off malicious activities completely, HIPAA laws set out clear guidelines to empower healthcare service providers to implement rigorous processes to detect, respond, mitigate, and investigate security incidents. 

A primary goal of HIPAA rules is to prevent unauthorized disclosure of protected health information (PHI). organizations and its employees can align to HIPAA’s best practices to securely transmit ePHI (PHI in electronic form) using secure communication methods – HIPAA-friendly software or HIPAA text messaging solutions. 

HIPAA regulations also require covered entities to implement access control protocols to prevent data theft or misuse, and disaster recovery plans to ensure business continuity. 

Another goal of HIPAA is to streamline several administrative functions within healthcare facilities. These functions help organizations shift their patient records from paper-based units to digital systems. Digitization standardizes the recording system. This ensures uniformity.

Who needs to adhere with HIPAA law

HIPAA rules apply to covered entities (CE) and business associates (BA). 

Covered entities include:

• Health plans (insurance providers or government programs like Medicare)
• Health care providers (those who conduct business electronically such as doctors, clinics, nursing homes, pharmacies) 
• Health care clearinghouses (organizations that help to process non-standardized electronic health information into a standardized one) 

Business associates are individuals or businesses who have access to PHI and work on behalf of covered entities or provide a service to them. Examples include accountants, health plan administrators, legal consultants, medical billing or data storage companies. 

What are the rules laid down by HIPAA?

Of the five HIPAA Titles, Title II is the most significant one that deals with administrative simplification. It outlines the regulations relating to privacy and security laws of a patient. Additionally, it charts the offenses and penalties for violating these laws. 

Privacy rule: These are a set of rules around how covered entities should use and disclose PHI. It requires parties involved to implement appropriate safeguards to protect PHI. It sets limits and conditions on the use of PHI without the consent of its owner. 

The privacy rule gives patients certain rights which enable them to obtain a copy of their health information, transmit it to another party, and request corrections if any data is incorrect. 

Security rule: Contains regulations to ensure the security of PHI that is created, transmitted, stored, used, or maintained by covered entities. It requires the concerned parties to implement appropriate administrative, technical, and physical safeguards to ensure its integrity, confidentiality, and availability. 

• Administrative safeguards relate to how the entity should comply with the act. 
• Physical safeguards seek to protect PHI from unauthorized access. 
• Technical safeguards help to securely transmit PHI via open networks in a way that only the intended recipient intercepts it. 

Breach notification: This rule requires covered entities and business associates to notify breach scenarios within 60 days. Following a breach event, covered entities must notify the affected individual, media if it affects more than 500 people, and the Secretary via the HHS website. 

Also check out: The HIPAA enforcement rule

What happens when you fail to follow HIPAA law?

When an employee/organization violates HIPAA regulations, they face internal corrective actions, termination, sanctions, or criminal charges. 

The outcome depends on the severity of the violation based on factors like the nature of violation, intent, number of individuals affected, its impact, corrective actions, and if it violated a criminal provision. 

There are four tiers of violations and penalties. The Office for Civil Rights (OCR) oversees and imposes these violations based on the tier. 

• Tier 1: The CE or BA was not aware of the rule. Penalty charges range between $100 to $50,000 per violation. 
• Tier 2: The CE or BA should have been aware of their action but did not violate due to deliberate negligence. Penalty charges range between $1,000 to $50,000 per violation. 
• Tier 3: The CE or BA violated due to wilful negligence but took corrective actions within 30 days. Penalty charges range between $10,000 to $50,000 per violation. 
• Tier 4: The CE or BA violated the law due to wilful negligence and didn’t take any corrective action. Penalty charges are $50,000 per violation. 

Conclusion

Are you struggling to ensure compliance while maintaining business growth? Managing both can be tedious, especially with a long to-do on both lists. 

The Sprinto solution automates all HIPAA-related tasks that you can think of. It assesses your environment for risks, continuously evaluates compliance posture, flags off problematic behavior, and trains your employees. 

Talk to us about how we can help you breeze through your HIPAA compliance.

FAQs

Does HIPAA apply to everyone?

HIPAA law applies to covered entities and their business associates. Covered entities include health plans, health care clearinghouses, and health care providers. Business associates include individuals or services that work for or offer a service to such entities. 

What are the purposes of HIPAA?

The purpose of HIPAA is to standardize the transmission of ePHI, address limitations on health insurance policies for workers who are between jobs, and protect the sensitive health data of patients. 

What are the 4 HIPAA violations?

There are 4 tiers of HIPAA violations. Level 1 is where the violator was unaware that they violated the law, Level 2 means they have a reasonable cause to violate and not willful neglect, Level 3 means they were aware but took corrective measures and in Level 4 they were aware but didn’t take corrective action.