HIPAA Privacy Rule


What is the purpose of the HIPAA Privacy Rule?

The HIPAA Privacy Rule, a regulation promulgated by the U.S. Department of Health and Human Services, establishes a minimum level of privacy protection for health care information. The Privacy Rule establishes a patient's rights regarding the use and disclosure of his/her health care information. It focuses on the application of effective policies, procedures and business service agreements to control the access and use of patient information. The Privacy Rule applies to health care providers, health plans, and health care clearinghouses.

Will the HIPAA Privacy Rule apply to my practice?

We believe that in the long term, all psychologists providing health care services will be subject to the Rule. We also believe that it is both wise and prudent to be HIPAA compliant for the following reasons: 

  • Insurance and managed care companies are rapidly moving from paper to electronic online transactions for payment and all health care operations. 
  • Circumstances could arise where the need for compliance is triggered by actions over which you will have no control (e.g., you may be required to respond electronically to a request for information about a patient). If this occurs, your entire practice must become HIPAA compliant immediately. 
  • If you bill any third-party source (e.g., HMO, PPO, Medicare) you will undoubtedly fall under the HIPAA regulations. 
  • It is quite predictable that all billing services will eventually move to electronic transactions to reduce the cost of manually processing claims. If you use a billing service that involves electronic transactions, you must also be compliant. 
  • The only possible exception to this advice would be the very few psychologists who are on a total cash basis, have no interface at any time, now or in the future, with any insurance carrier, hospital, managed care company, state or federal program, or other third-party payer that currently or in the future may require some form of electronic transaction.

Am I exempt if I do not use electronic transmissions?

You may be exempt currently if you do not submit claims electronically or participate in any third-party payment plans. However, it is unlikely you will be able to avoid all electronic transactions in the future and remain exempt, especially if you or a business associate working on your behalf transacts any health care business electronically (e.g. billing or payment for services, authorization for treatment, utilization review, and verification of coverage, etc.). That is why we recommend that psychologists who provide health care services become HIPAA compliant.

How does the HIPAA Privacy Rule impact current laws in my state?

This is one of the most important issues that must be addressed. The HIPAA Privacy Rule establishes minimum provisions for the use and disclosure of health care information. If your state laws are more protective than the minimum required by HIPAA, the state law will take precedence over the HIPAA standard. If the state law is less protective, the HIPAA provision will prevail. To comply with HIPAA, it is necessary to compare all laws related to health care delivery in your state with the HIPAA regulations. A decision must then be made regarding which regulation or statute provides the greatest level of protection of health care information. The completed analysis is then made part of the required "Notice Form."

Does each state require its own state-specific Notice Form?

Yes. The HIPAA Privacy Rule requires that covered health care providers provide their patients with a "Notice Form." The Notice Form describes patients' rights related to the use and disclosure of their health care information. The information in the form must comply with either the HIPAA requirements or the state statutes, depending on which regulation or statute provides patients with the greatest level of protection of their health care information. Given that the HIPAA regulations are highly technical and voluminous, and there are hundreds of health care provisions in each state, this will be a daunting task for psychologists. It would be very difficult for anyone without legal training or extensive knowledge of the law to develop the required Notice Form.

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