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The Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 to protect patient health  (PHI) confidentiality.  HIPAA compliance in medical billing means following the essential rules and regulations that are to secure patients’ information. The act defines the methods how healthcare organizations and insurers handle patient information. So, they use data with complete confidentiality to offer patient care, or perform daily operations. HIPAA ensures that healthcare organizations and billing companies only use patient information for treatment, payment, or healthcare operations. In some cases, it can also be shared without patient permission for required legal or public health purposes.

HIPAA act importance

Adhering to the HIPAA act is critically important for healthcare organizations, outsourcing medical billing companies and insurance companies. It is because ensuring confidentiality of HIPAA saves healthcare practices from hefty fines and penalties. Saving patients from frauds and identity theft is the primary purpose of HIPAA regulations. Therefore, healthcare practices prefer outsourcing billing to HIPAA compliant RCM companies.

HIPAA regulations for medical billing

HIPAA compliance in medical billing focuses on keeping PHI safe and protected, especially while managing billing related tasks. HIPAA rules guide healthcare providers, insurance and billing companies  in using, disclosing and storing PHI. These regulations enforce some essential administrative, physical and technical regulations to safeguard PHI’s integrity. Therefore, The U.S. Department of Health and Human Services (HHS) assigns legal and ethical duty to health practices, billing service providers and insurance companies to follow HIPAA rules as their legal and ethical responsibility.

Moreover, HHS has also structured these regulations around three key major rules, those we will discuss in the following sections:

HIPAA privacy rule

The privacy rule protects patient information from unauthorized access. It sets restrictions on medical records while allowing only authorized people to view them. The privacy rule also asks healthcare practices to get written permission from patients before sharing their data with third parties such as insurance companies. The following points explain how the privacy rule works to secure patient information:

• Only those can access patient records who need to offer treatment, process payments or manage healthcare operations (TPO).

• Individuals can access medical records but with patients' permission.

The privacy rule applies to all kinds of record formats such as paper records, digital files and secret conversations. Moreover, the rule allows patients to view their medical record, get a copy, make corrections and check who accessed their medical information.

Security rule

The security rule in the HIPAA act tells specific methods to secure patient’s data electronically. Its data protection methods are divided into three main categories, which are:

Technical

Setting up strong technical protections such as unique logins and strong passwords. So, patients can easily track who accessed their data and when. Moreover, the security rule in HIPAA act requires data encryption, so it becomes accessible to the person who has the right key. At the same time, data encryption saves the patient's data while storing data and sending it online. The act also asks healthcare providers to use secure networks, firewalls and anti-malware tools to increase safety against hackers’ attacks.

Physical

Physical safeguards in HIPAA are especially designed to protect the physical places where health professionals store patient information. The process involves the following steps:

• Securing the facility

• Protecting devices

• Tracking physical entries in sensitive areas.

Administrative

HIPAA administrative security rules demand healthcare professionals to train their staff members about using the technology. They must know the proper methods to protect ePHI and must have the ability to identify phishing scams. Moreover, the act also tells organizations who deal with ePHI get regular security assessments to track security weaknesses. Furthermore, the organizations must have secure copies of all ePHI to efficiently deal with a crash or a cyberattack. 

The breach notification rule

The breach notification rule also explains how to deal with the situation when PHI is compromised. According to the rule, the healthcare practice must inform the affected patient within 60 days. In this, organizations must also explain the methods of what happened and the next steps to recover the damage. The rule also asks healthcare organizations to report HHS for large breaches and once a year for smaller ones. If a breach affects more than 500 people then the rule asks healthcare organizations to inform local media as well.

The above-mentioned HIPAA rules set clear standards and guidelines to protect PHI. It is essential for healthcare organizations to follow to avoid serious penalties. 

What is PHI in medical billing?

In medical billing, Protected Health Information (PHI) is very confidential patient information. PHI in medical billing includes various kinds of data such as patient health, treatment, and payment details. Moreover, it also covers details like patient names, addresses, social security numbers and medical records. Billing companies, insurance companies and medical practices carefully handle PHI to adhere to HIPAA rules. Its secrecy is important to protect patient privacy and prevent scams.

Are government agencies authorized to access PHI?

Yes. under certain conditions the US law allows some government agencies like HHS and CMS to access PHI. These conditions are as follows:

• To track or prevent diseases and ensure public safety.

• For investigations, reporting crimes and to follow court orders.

• To deal with emergency situations and prevent a serious threat to health or safety.

How to stay HIPAA compliant

Staying HIPAA compliant for healthcare practices is crucial, it requires proper consideration and becomes manageable with the right processes. The following points help organizations to make their organization HIPAA compliant.

• Stay updated with the latest HIPAA laws.

• Use firewalls, encryption, backups and secure backups.

• Use AI tools to reduce errors.

• Grow with a plan.

• Healthcare providers must sign a Business Associate Agreement (BAA) with partners who handle PHI as following HIPAA rules.

Compliance through outsourcing

Outsourcing medical billing to a trusted company is an effective way for healthcare practices to maintain HIPAA compliance. The BAA contract binds them to strictly follow all HIPAA regulations. Moreover, outsourcing medical billing significantly reduces operational costs and improves workflow efficiency. A reliable outsourcing partner helps medical practices to uphold compliance in the following ways: 

• They use secure systems to ensure data security and offer data encryption to restrict unauthorized access.

• Outsourcing billing companies train your staff members to securely handle patient’s data and properly follow HIPPA guidelines.

• Medical billing service providers regularly monitor devices in use to timely identify and address security threats.

• As experts of medical billing, service providers stay updated with the latest HIPAA regulations. 

Partnering with a trusted medical billing company brings manifold simplifications to HIPAA compliance for medical practices. It allows them to focus more on patient care, reducing administrative burden while meeting all regulatory requirements.

Penalties on HIPAA violations

According to HHS and OCR rules, medical practices that violate HIPAA rules may face legal troubles and heavy fines. These struggles also cause significant damage to their organizational reputation. Civil penalties vary, depending on the nature of violations can range from $100 to $50,000. However, criminal offences can be fined up to $250,000 and up to 10 years in prison.

In 2018, a healthcare organization, the University of Texas MD Anderson Cancer Center was fined $4.3 million for exposing patients’ PHI. They failed to implement proper security measures.

Last words

Overall compliance with HIPAA rules and regulations is important to protect patient privacy and secure PHI. It saves medical practices from legal and financial penalties. To maintain compliance healthcare organizations must follow privacy, security and breach notification rules. Moreover, they also need to implement administrative, technical and physical safeguards to meet HIPAA requirements. Setting up in-house billing infrastructure for medical practices is expensive and complex. However,  outsourcing medical billing to a reliable company significantly reduces expenses and administrative burden. Trusted outsourcing companies maintain compliance through expertise, use the latest technology and train staff members of healthcare organizations. It is essential to secure patient privacy and enhance trust.