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What's HIPAA?-A Basic HIPAA Primer 08/25/2006 09:01 PM In the past, health providers and plans have used many different electronic formats to transact medical claims and related business. Implementing a national standard is intended to result in the use of one format, thereby "simplifying" and improving transactions efficiency nationwide. Virtually all health plans must adopt these standards. Providers using non-electronic transactions are not required to adopt the standards for use with commercial healthcare payers. However, electronic transactions are required by Medicare, and all Medicare providers must adopt the standards for these transactions. If they don't, they will have to contract with a clearinghouse to provide translation services. Health organizations also must adopt standard code sets to be used in all health transactions.,For example, coding systems that describe diseases, injuries, and other health problems, as well as their causes, symptoms and actions taken must become uniform:All parties to any transaction will have to use and accept the same coding,for the purpose of.reducing errors and duplication of effort. Fortunately, the code sets proposed as HIPAA standards are already used by many health plans, clearinghouses and providers, which should ease transition to them. • More about the Transactions Standards. 2. Unique Identifiers for-Providers, Employers, and Health Plans In the past, healthcare organizations have used multiple identification formats when conducting business with each other—a confusing,error-prone and costly approach. It is expected that standard identifiers will reduce these problems. The Employer Identiifer Standard, published in 2002, adopts an employer's tax ID number or employer identification-nu (EIN) as the standard for electronic transactions. The NPI, published in 2004, requires hospitals,doctors, nursing homes, and other healthcare providers to obtain a unique identifier when filing electronic claims with public and private insurance programs. Providers can apply for an identifier once and keep it if they relocate or change specialties. A'final standard for a Health Plan identifier has not yet been published. • More about the Employer ID. • More about the National Provider ID. 3. Security Rule The final Security Rule was published on February 20,2003 and provides for a uniform level of protection of all health information that is housed or transmitted electronically and that pertains to an individual.The Security Ruie requires covered entities to ensure the confidentiality, integrity, and availability of all electronic protected health information(ePHI)the covered entity creates, receives, maintains, or transmits. It also requires entities to protect against any reasonably anticipated threats or hazards to the security or integrity of ePHI, protect against any reasonably anticipated uses or disclosures of such information that are not permitted or required by the Privacy Rule, and ensure compliance by their workforce.Required safeguards include application of appropriate policies and procedures, safeguarding physical access to ePHi, and ensuring that technical security measures are in place to protect networks, computers and other electronic devices. The Security Standard is intended to be scalable; in other words, it does not require specific technologies to be used. Covered entities may elect solutions that are appropriate to their operations, as long as the selected solutions are supported by a thorough security assessment and risk analysis. • More about the Security Rule. 4. Privacy Rule The'Privacy Rule is intended to protect the privacy of all individually identifiable health information in http://www.hipaadvisory.com/REGS/HIPAAprimer.htm Page 3 of 4