Understanding HIPPA in Medical Billing | I-Conic Solutions
HIPPA in Medical Billing

Understanding HIPAA in Medical Billing

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is well recognized by the healthcare industry. This was established to protect the privacy of sensitive patients’ Protected healthcare information (PHI). It also guarantees the right for patients to access their PHI. The application of this rule has helped prevent several unwanted activities like fraud and data theft. In addition, it prevents healthcare providers and associated healthcare businesses (or cover entities) from disclosing the information to unauthorized individuals or companies.

HIPAA has proven to be highly beneficial from the date of implementation. HIPAA Compliance is regulated by the Department of Health and Human Services (HHS). The Office of Civil Rights (OCR), the enforcer, ensures that HIPAA Compliance is followed by healthcare organizations properly. Hence, HIPAA in medical billing is taken very seriously.

What are PHI and its importance?

Protected health information (PHI) is the information of a particular patient held under a HIPAA entity. It includes their name, personal details, medical history, and present issues.

The importance of PHI is that it bears the records of each individual. Therefore, any authority that has access to it can easily get the particular individual’s information. This is beneficial for healthcare providers to plan out appropriate actions to help the patient. It is also easier for the billing team to collect reimbursements later. But the data is equally sensitive and can be taken advantage of if in the hands of unauthorized entities. Therefore HIPAA in medical billing is an important factor.

Considering the sensitivity of this information, HIPAA compliance was put into action. HIPAA in medical billing protects the confidentiality of the PHI and allows the patient and only HIPAA-associated authorized entities to access the sensitive information.

5 Main Components of HIPAA

HIPAA in medical billing consists of 5 major components as HIPAA Compliance put action to make healthcare services more efficient and also take care of frauds. Acknowledging these points, let us understand the 5 areas that HIPAA covers.  

HIPAA Health Insurance Reform

The HIPAA Heath Insurance Reform addresses the workers who either have changed their jobs or have lost them. It aims to protect such individuals by preventing group health plans from denying coverage.

HIPAA Administrative Simplification

It establishes national standards for electronic healthcare transactions and includes the following key areas:

  • Privacy Rule 
  • Security Rule
  • Transactions and Code Set Rule 
  • Unique Identifiers Rule
  • Enforcement & Breach Notification Rules

This plays an important role in maintaining the privacy and implementing secure electronic health data access. In addition, this improves the efficiency and security of the system.

Tax-related Health Provisions

As the name suggests, it is inclusive of all tax-related provisions for medical aids. It also consists of updates and changes seen in the insurance laws.

Group Health Insurance Enforcement & Application Requirements

It specifically addresses the needs of individuals with a pre-existing condition who wish to continue their coverage.

Revenue Offset 

Provision for Company-owned life insurance falls under this category. It protects individuals who have lost their citizenship due to tax expiration.


The overall aim of this article was to give you a brief overview of HIPAA in medical billing and why it is important. In addition, it addresses the requirement of HIPAA to be implemented in the current condition and the breakdown of rules.

For more information, visit us at I-conic Solutions.

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