What is HIPAA?

Medical Billing Services

HIPAA was created in 1996 by Congress. It protects workers’ health insurance and their families in the event of their job loss. HIPAA protects the privacy and security of children aged 12-18 years old. It also establishes regulations that allow for electronic transfers of healthcare data. We’ll be focusing on this last point in our summary. But let’s take a quick look at the entire Act.

HIPAA can be divided into five sections or Titles. We will only be focusing on the Titles 1 and 2. Which are the most extensive and far-reaching, for the sake of this course.


Title I outlines the rules that govern how group health organizations. Such as managed care organizations, interact with patients. Title I restricts the restrictions that a group of health organizations can place on patients based only on pre-existing conditions.

Title I also restricts the time required to obtain coverage for a pre-existing condition. A person must be able to receive coverage for his or her pre-existing condition within 12 (or 18) months.

Individuals and their families are also covered under Title I. if an individual loses or changes their job. Their previous job are permitted to keep this insurance until their new coverage begins. HIPAA doesn’t provide permanent insurance. There are some caveats. However, it does allow people, who are out of work to continue their health insurance.

This Title of HIPAA has a greater impact on insurance companies. HIPAA’s Title II will have a greater impact on medical billing.


Electronic medical Billing increased after HIPAA was adopted. Medical billing is quicker, cheaper, and more error-prone. However, some patients and regulators worried about the privacy. Title II addresses these concerns and provides guidelines and standards.


Title II contains security guidelines to ensure that electronic and physical records are safe.

Title II also established rules that limit who and when your medical information can be distributed. These rules allow patients to have more control over their medical records. They can be accessed by anyone. These rules prohibit anyone, including providers, payers or government agencies. A biller for worker’s compensation would not include a patient’s history with heart disease.


HIPAA was passed, adding an ” Administrative Silmplification” (AS), to a section of the Social Security Act. Title II, which was established with the AS, set out guidelines and regulations for electronic transmission of healthcare data and medical billing.

Many of these codes regulations are already familiar to you. HIPAA established the use of CPT and codes for creating claims.

Uniform communication method for all parties

The AS’s goal was to create a consistent, uniform communication method for all parties involved in healthcare. This included providers, payers, clearinghouses and government agencies. These standards must be adhered to by all bodies that are covered under HIPAA.

All electronic transactions must conform to Title II. An EDI is a standard form of electronic transaction. It is widely used in all kinds of commerce.

HIPAA Medical Billing Follow

Each medical Billing must follow a specific format under Title II. HIPAA requires that electronic transactions adhere to the ASC X12 format. This is the ASC X12 005010. There are many subforms in this form that correspond to specific medical Billing.

We’ll continue to discuss how HIPAA Title 2 affects medical billing in our next course. Let’s wrap up this section by briefly describing what Title II does.

Title II requires the use of National Provider ID numbers. NPIs are important to remember from the discussion about creating medical claims. These NPIs can be ten characters in length, may be alphanumeric and may not be re-used except in certain situations. NPIs, like CPT or ICD codes, provide a universal shorthand to identify a critical part of healthcare.

Title II, in addition to the above-mentioned regulations and rules is also an outline of healthcare offenses and provides civil and criminal penalties for these fraud offenses.

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