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Show The Health Insurance Portability and Accountability Act of 1996 A Review and Update John J. Bade Jr., M.D., Managing Editor Introduction The Health Insurance Portability and Accountability Act of 1996 (HIP A A) has been called the most profound and comprehensive law affecting health care since Title XVIII of the Social Security Act of 1965 introduced Medicare. The overall aim of the law may be seen as threefold-to enhance continuity of insurance coverage, to decrease abuses of the insurance system while providing for security of health data, and to confer tax-exempt status on certain health-related spending. Below is an overview of the provisions of HIPAA, followed by a summary of the impact it has had in the five years since it became law. Overview of HIPAA Provisions Titles I and IV - Portability The terms "preexisting condition" and "discontinuation of coverage" have become rallying points for the public's increasing dissatisfaction with the health insurance system. A large portion of HIPAA aims to increase portability of health insurance, resulting in greater continuity of coverage during changes in one's employment or life circumstances. This is accomplished by imposing time limits on preexisting condition exclusions, expanding enrollment periods, and mandating that health status or genetic information cannot be used to determine eligibility or premiums for individuals in a group plan. There are also prohibitions against denying or discontinuing health insurance for small employers or individuals outside of a group plan. Title II - Fraud and Abuse In part a reaction to the identification of several insurers' fraudulent payment practices, Title II aims to provide greater disincentives for those abusing Medicare and other insurance programs receiving Federal funds. This will be accomplished through increased inspections, audits, criminal penalties, education, and incentives. For example, if someone submits a report identifying fraud or inefficiency, they are entitled to a portion of fines received or savings realized. In addition, those convicted of fraud will be barred from continued participation in federally funded insurance programs. Subtitle F, known as "Administrative Simplification," outlines requirements for electronic systems to transfer and access health care and insurance data, and also imposes penalties for insecure or wrongfully disclosed individual data. The dual mandate of restricting access and facilitating transfer of information has been a difficult one to implement. Title III - Tax provisions To extend the tax-privileged status of dollars spent on health care, Subtitle A allows for the creation of Medical Savings Accounts. These accounts will allow limited tax-deductible contributions by individuals to be used for their health expenses. To ease the financial burden of the elderly and terminally ill, Subtitle C allows long-term care contracts to be treated as health insurance policies for tax purposes. Impact of HIPAA The impact of HIPAA over the past few years is difficult to understate. The most activity has concerned compliance with the new administrative, data transfer, and privacy rules. On a scale not unlike that of the Americans with Disabilities Act, HIPAA is mandating an enormous cash outlay, with the requisite proliferation in consultants, specialists, and experts, which flock to any market priced between $6 and $43 billion. However, it will also provide both uniformity and technological impetus in an industry which still relies on paper notes and the deciphering of doctors' orders. There is substantial controversy regarding the scope of the legislation. For example: which of the panoply of health-care related businesses is a "covered entity?" The Department of Health and Human Services is engaging in an iterative process of updates to the rules as issues arise. This means that HIPAA is a bit of a moving target; it is therefore essential that flexibility be paramount in an organization's compliance plan. Sources: Lageraan R.C., Mellick J.R. (2001). J Health Care Finance, Summer; 27 (4): 1-6. Rosati K.B. (2002). J Health Law, Winter; 35(1): 45-82. http://www. hipaa. org/. Utah's Health: An Annual Review Volume VIII 115 |
