The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a significant healthcare reform law that was passed by Congress in 1996. The law has its roots in the Clinton Health Reform proposal, and its primary purpose was to provide better access to health insurance as well as to toughen the law concerning healthcare billing fraud. There are other corollary sections of the law related to administrative simplification and privacy of protected health information that have far-reaching effects for Providers, Payers, Managed Care Organizations, their business associates, and any entity storing, processing, and transmitting healthcare information.
in addition, the Act includes provisions for improving and monitoring the security and confidentiality of any records containing health plan member and patient information. In 1998, the Department of Health and Human Services (HHS) proposed, as part of these HIPAA provisions, a Nation Standard Provider Identifier (NPI), a National Standard Employer Identifier and security standards for electronic health data.
The Administrative Simplification rules of HIPAA are intended to improve efficiency in healthcare delivery through standardized, electronic transmission of many administrative and financial transactions as well as protection of confidential health information.