The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is of major important to patients because it is the first-ever set of federal privacy standards for protecting patient's medical records and other health information which they may provide to doctors, hospitals, pharmacies, other health care providers, and to health plans (Protection, 2003). It was developed by the Department of Health and Human Services, and provides patients with access to their medical records and gives them more control over how their medical information is used and to whom it is disclosed. The standards represent a uniform federally mandated privacy protection for consumers across the entire country. State laws providing additional protection to consumers are not affected by this new rule, because it provides a basic protection: state protections apply in addition to HIPAA.
HIPAA includes provisions to encourage electronic transactions and requires new safeguards to protect the security and the confidentiality of patient health information (Protection, 2003). The regulation covers health plans, health care clearing houses, and other health care providers who conduct certain financial and administrative transactions which involve patient medical information such as enrollment, billing and eligibility verification, electronically.
HIPAA limits the ways in which health plans, pharmacies, hospitals and other covered entities can use patients' personal medical information (Protecting, 2003). Patients have a right to see and obtain copies of their medical records and request corrections of errors and mistakes they identify within 30 days of requesting these records from doctors, hospitals, health plans, clinics, nursing homes and other covered entities. Doctors, covered health plans and other health care providers must advise patients of how they may use personal medical information. HIPAA sets limits on how health plans and cove...