Finance, LEGAL

What Is HIPAA and Why Is It Important?

Sensitive personal information such as one’s social security number and health information such as one’s diagnosis needs protection to remain confidential. If you fear that your personal and health information might not be safe, you should know that there is a law in place that helps to protect this kind of information.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a law used for this purpose. Chances are you’ve encountered HIPAA rules at some point in your life. But what is HIPAA and why is it important? We explain the basics here!

What Is HIPPA?

HIPAA is a federal law enacted by President Bill Clinton in 1996. This law aims to protect personal and health information from fraud and theft. Such information is only meant to be seen by the patient, as well as health care professionals who need to access it.

HIPPA protects sensitive personal and health information so that it is only viewed and used by persons (i.e., health care professionals) who will use it in a meaningful manner to provide care to the patient. This law helps to ensure that all this information is shared securely.

The HIPPA law protects this information from persons who want to steal it to profit from it, usually through the sale of the information on the black market or through fraudulent activities (e.g., billing insurance companies for health care services that have not been provided). The persons who steal medical health records have a lot to gain from doing so. HIPPA aims to deter this kind of activity. 

HIPAA Violations

If you worry your personal and health information might get into the wrong hands and used in unlawful activities or sold to other parties, keep in mind that health care providers and health care organizations must protect this type of information. 

This law is not taken lightly. All persons and organizations that handle personal and health information need to comply with this federal law. If the integrity of this information is compromised, a HIPPA violation occurs. 

A HIPPA violation is costly. In cases where an entity (e.g., health care organization) cannot resolve the manner, civil money penalties are imposed. To avoid any civil money penalties and a breach of personal and health information, safeguards are implemented. 

Acquiring Personal and Health Information 

If you are the appointed trustee of a person who is incapacitated, you may need to get the person’s health information from physicians. You may have difficultly doing so unless you obtain a HIPAA Waiver. As a trustee, you will need this waiver to obtain letters from two doctors who can verify that the person is incapacity.  

The Benefits of HIPPA

What is HIPPA intended to do? The purpose of HIPPA is to protect the personal and health information of Americans. This federal law ensures the safeguarding of such information. If you need to bypass it, consider obtaining a HIPPA Waiver. 

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