What is HIPAA?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), (Public Law 104 – 191) consists of two major sections: Health Insurance Reform and Administrative Simplification. The Administrative Simplification section calls for the Department of Health and Human Services to develop standards for the format and content of health care transactions and includes provisions regarding:

• Standardized electronic transaction formats and code sets
• Universal provider, employer, health plan and patient identifiers
• Security and privacy for the protection of individually identifiable patient information
• Penalties for non-compliance with transaction standards and wrongful disclosure of patient information

Any organization that handles or stores electronic health care data must comply with HIPAA regulations by October 16, 2002, with the exception of small health plans, who have until October 16, 2003. HIPAA calls for the following penalties for failure to comply:

• Violations of HIPAA standards garnishes a $100 penalty for each infraction with a maximum penalty of $25,000
• Wrongful disclosure of patient information commands a $50,000 fine and/or not more than one year in prison
• Wrongful disclosure under false pretenses results in a $100,000 fine and/or not more than five years in prison
• The penalty for disclosure of patient data with intent to sell is a $250,000 fine and/or not more than 10 years in prison

Capstone is committed to providing the tools and guidance necessary to comply with HIPAA, and supports all transaction formats and security standards mandated by HIPAA.