The Health Insurance Portability and Accountability Act of 1996 (Public Law 104-19), otherwise known as HIPAA, was enacted as a broad Congressional attempt at incremental healthcare reform.
The "Administrative Simplification" section of that law requires the United States Department of Health and Human Services (DHHS) to develop standards and requirements for maintaining and transmitting health information. The Administrative Simplification section of HIPAA is designed to improve the efficiency and effectiveness of the healthcare system by standardizing the electronic data for specified administrative and financial transations, while protecting the security and confidentiality of that information. HIPAA has three standard requirements:
Privacy: To protect patient data from inappropriate disclosure or use
Security: Safeguards around patient information systems preventing unauthorized access
Administrative Simplification: Administrative standards will replace numerous non-standard formats that currently are being used for transactions with a single uniform set of electronic formats.
