HIPPA Laws - Research Paper Example

HIPPA, is the health reform act that mandates and administers the standards for Electronic Data interchange transactions. The Health Insurance Portability and Accountability Act (HIPAA) resulted from a bill sponsored by Senators Nancy Kassebaum and Edward Kennedy, who acknowledge the integrity of customer data . Schneider (2006) This act dramatically impacts the healthcare industry as it forces them to increase the task force of Internal auditing that is also associated with the Sarbanes-Oxley Guide.

HIPAA was signed into law in 1996. Electronic transactions have also been under the scope of this act due to the fact that information systems have been dramatically evolving, which poses a risk for the avenues of how information is transmitted. Since HIPAA puts strict regulations in patient information, blue cross blue shield was force to renovate its strategy. Morgan (2011) Due to HIPAA and ACA, blue cross blue shield was forced to think of new strategies. For example, it used the benchmark principle to tell the hospitals to reduce its cost by 10%, which was indirect method.

A more direct approach would be to tell the hospital to directly cut the staff. . In order to combat fraud, Congress enacted HIPPA and the ACA have implemented some procedures to combat fraud (“What is HIPAA”). The HIPAA and ACA are both critical legislations that ensure patient privacy. This is a key element to prevent fraud in most cases. Individuals seeking information must submit their PHI or SHI in order to prevent other individuals from claiming insurance compensation on behalf of others.

Not only does HIPAA ensure the right of privacy to patients, it also sets a comprehensive set of protocols which dictate the way transactions take place. The HIPAA is extremely keen setting strict standards on how monetary transactions take place in a healthcare environment. Most medical providers that file claims electronically did not use the HIPAA standard. However, with the creation of EDI Health Care Claim Transaction set, electronic billing systems were modified to ensure that providers of health care services to payers sent their bills directly to a claims center without involving a third party.

In addition, it is also enacted to ensure that the transmission of information between the payers and intermediaries are properly documented for auditing purposes. Morgan (2011) A prime example of this can be depicted in this scenario. For instance, a state mental health agency is responsible for all healthcare claims. The providers and health care intermediaries must use the 837 Health Care Claims protocols. Professional business applications are developed to facilitate this claim. Another important aspect of HIPAA that one must not ignore is the fact that all retail pharmacy that dispense medications must comply to EDI Retail Pharmacy Claim Transaction acts.

Schneider (2006) This is utilized to transmit claims in regards of pharmacy services, who are