Congress intended this law to simplify administrative and financial transactions in health care through the adoption of national standards for the electronic transmission of health information. The stated goals are to improve efficiency and reduce costs in health care. These are great ideas, but the details for implementation and compliance are anything but simple!

The intended bottom line is that HIPAA will eventually require every health plan, as well as every health care institution and practitioner who maintains or transmits health information electronically, to be in compliance with the administrative simplification mandates. Once these regulations are in place, each health care provider and plan will need to examine and evaluate its patient data privacy, electronic data security and transmission policies, procedures, practices and protocols. This administrative simplification is the last major component of HIPAA to be implemented.

If everything comes together as intended by HIPAA, which was originally enacted in 1996, these provisions should cut costs and improve efficiency for the employer. Other benefits will hopefully accrue as well. Standard formats will be available for the electronic submission of health plan enrollment information. Patients should take comfort in the fact that their most personal health information will be protected.

Because assisting our clients with compliance has required enormous resources on our part, and because the liability of noncompliance will be so enormous, we have been addressing HIPAA administrative considerations for some time. In coming months, we will continue to provide you with occasional written updates, as well as additional articles in future issues of this newsletter.