One of the problems with developing legislation for the entire healthcare industry is rules must be written for organizations of different sizes, with vastly different business models, budgets, staffing levels, and capabilities. Rules need to be written that are sufficiently flexible to accommodate this variety and be appropriate for all organizations and their unique operating structures.

One of the challenges with developing HIPAA was to create rules that would correct inefficiencies and get the healthcare system working more harmoniously. They also needed to stand the test of time and be flexible enough to accommodate changes that could not be envisaged when the legislation was signed into law. When the Privacy and Security requirements were introduced, they needed to be specific enough to serve as a practical framework for healthcare organizations to follow yet be flexible enough to account for changes in technology and operating practices over time.

This was vital as the process of updating legislation is simply too slow to allow for regular changes to be made. The HHS needs to issue a request for information to find out what needs to change, process the feedback, then a notice of proposed rulemaking, review the comments on the proposed changes, pen the final rule, issue that rule, and provide sufficient time for healthcare organizations to comply with the changes. That process spans several years, yet working practices evolve and new technology is constantly being introduced.

The way that HIPAA needed to be written has naturally led to the legislation receiving a lot of criticism. HIPAA has been criticized for having too many requirements and also not enough in certain areas, and for being too inflexible and difficult to interpret, and challenging to comply with. Despite the challenges of compliance and the gaps in HIPAA, the legislation has provided many benefits for healthcare organizations, healthcare professionals, patients, and health plan members. The legislation is far from perfect and HIPAA is in desperate need of updating – new HIPAA regulations will soon be introduced – but in its current form, the benefits of this important legislative act far outweigh any disadvantages.

In this article – and the next two in the series – I will explain the benefits of HIPAA and how the proposed Privacy Rule changes will help to address some of the current pain points and should significantly improve HIPAA for healthcare organizations, their employees, patients and members. You can read about the benefits of HIPAA for healthcare professionals here.

How HIPAA has Benefited Healthcare Organizations

HIPAA was signed into law more than 25 years ago in 1996 before many current healthcare workers had even been born. For those in the industry old enough to remember, at that time there was a desperate need to improve efficiency in the healthcare industry, as a huge amount of time and effort was wasted on inefficient manual processes, the cost of which was driving up the cost of healthcare at an unsustainable level.

HIPAA improved efficiency by standardizing healthcare transactions across the industry, including requiring all healthcare organizations to use the same standard code sets and follow standard administrative practices. Not only did the standards introduced by the HIPAA Administrative Simplification Rules help to eliminate waste and reduce the administrative burden on healthcare organizations, they have also helped to improve patient safety by reducing the potential for medical errors by making it easier to match records with the right patients. Before the introduction of HIPAA, healthcare fraud was rife and was costing the healthcare industry around $7 billion a year. The standardization of healthcare transactions has helped to reduce significantly reduce fraud.

The introduction of the HIPAA Privacy, Security, and Breach Notification Rules brought many benefits to healthcare organizations, but also some of the biggest pain points for HIPAA-covered entities. These updates required considerable changes to working practices and came with a significant administrative burden. HIPAA set clear – and sometimes not so clear – rules on how health information can be used and disclosed, how health information must be handled, and the policies and procedures that need to be implemented to ensure the confidentiality, integrity, and availability of protected health information. The HIPAA Privacy Rule has empowered patients to take a much more active role in their healthcare, allowing them to check their medical records for errors and get any errors corrected, which has helped to reduce the risk of medical errors and improve patient outcomes, which naturally has many benefits for healthcare organizations. By having standard rules in place, patients have the same rights no matter where they obtain care, and the safeguards to ensure the confidentiality of health information have helped to build trust between patients and their healthcare providers.

The HIPAA Security Rule set standards for all covered entities to follow to ensure the confidentiality, integrity, and availability of electronic health information and helped healthcare providers successfully transition from paper records and charts to electronic health records and encouraged the adoption of new technologies for improving efficiency and the quality of care in a safe and secure way. The HIPAA Security Rule was not meant to be a comprehensive checklist of every security measure that should be considered or implemented, rather it is a set of minimum standards for security that must be achieved. By adopting those standards, healthcare organizations have prevented many data breaches and avoided the considerable costs of those breaches. Many of the data breaches now being reported are due to employee errors and non-compliance with the HIPAA Security Rule.

The HIPAA Breach Notification Rule provides important benefits to patients, but there are also benefits for healthcare organizations. Compliance with this aspect of HIPAA ensures transparency about unauthorized access and disclosures of protected health information and promptly notifying patients about data breaches – which are often out of the control of healthcare organizations –can improve trust in healthcare organizations and reduce the reputational damage caused by data breaches. Importantly, HIPAA lacks a private cause of action, which helps HIPAA-covered entities avoid the considerable legal costs of defending lawsuits from patients who believe their privacy has been violated.

How the Proposed Updates to the HIPAA Privacy Rule will Benefit Healthcare Organizations

While the HIPAA Rules lack specificity in certain areas and incorporate flexibilities to avoid the need for regular updates, updates to HIPAA are required to accommodate changes in working practices and advances in technology, and to correct the elements that are either not achieving the purpose they were intended to or are no longer important. There has also been considerable criticism over the years that HIPAA continues to place an unnecessary administrative burden on healthcare organizations. After issuing an RFI, OCR published a Notice of Proposed Rulemaking in 2021 to update the HIPAA Privacy Rule, mostly to strengthen individuals’ rights to access their own health information and to reduce the administrative burden on healthcare organizations.

These Privacy Rule changes should help to improve information sharing, which will make patient care coordination and case management easier, including the coordination and management of care through social and community services. The updates will also facilitate family and caregiver involvement in the care of individuals that are experiencing emergencies or health crises. The restrictions of HIPAA have been clear became clear throughout the opioid and COVID-19 public health emergencies. The update helps to address this by incorporating flexibilities to permit disclosures in emergencies and threatening circumstances. These updates will help healthcare providers deliver better care and improve patient outcomes.

The amount of paperwork involved in providing healthcare also needed to be addressed. Finally, some of the time-consuming tasks that healthcare organizations still need to perform manually are being eliminated, such as the requirement for a covered entity to obtain an individual’s written acknowledgment of receipt of a direct treatment provider’s Notice of Privacy Practices and retain copies of that documentation for 6 years.

Any update to HIPAA comes with a considerable workload initially but the benefits should be felt quickly. OCR believes the efficiencies introduced by the Privacy Rule changes will help to save $3.2 billion over five years, thus limiting the increase in the cost of healthcare. The Final Rule has yet to be published in the Federal Register, but that should finally happen in 2023.

Healthcare Organizations are Still Struggling with HIPAA Compliance After 26 Years

HIPAA has been in effect for 26 years, the Privacy and Security Rules for two decades, and the Omnibus Rule and Breach Notification Rules for 14 years, yet HIPAA compliance is still proving to be a challenge for many healthcare organizations.

One of the common complaints about HIPAA that makes compliance complicated is the frequent use of terms use as reasonable… exercise reasonable diligence, implement reasonable and appropriate policies and procedures, reduce risks and vulnerabilities to a reasonable and appropriate level. There are also ‘required’ and ‘addressable’ provisions, where addressable provisions are still required elements of compliance, in some form. These flexibilities are what make HIPAA workable for such a wide range of healthcare organizations and stay relevant, but they can present significant challenges for healthcare organizations, especially smaller practices that lack the staff and resources to devote to compliance.

One of the ways that many smaller healthcare organizations have simplified compliance and ensured all the i’s are dotted and t’s are crossed is by using HIPAA compliance software. These software solutions guide healthcare organizations through compliance with all aspects of the HIPAA Rules, eliminating the guesswork and making sure that no provisions are overlooked. The software can be used to achieve compliance and maintain the compliance program, prompting risk analyses, updates, and training, and ensuring compliance efforts are fully documented to ensure painless audits and investigations.

Security Rule compliance can be particularly challenging, as the Security Rule does not provide specifics about technologies that should be used to protect healthcare data. Many healthcare organizations have simplified compliance and gone above and beyond the requirements of HIPAA by adopting a cybersecurity framework. Frameworks such as the NIST Framework for Improving Critical Infrastructure Cybersecurity and the HITRUST Cybersecurity Framework provide structure, transparency, and guidance for achieving compliance with HIPAA and other privacy and security regulations and provide clarity and consistency while reducing the burden of compliance.

In 2021, the HITECH Act received an update to encourage the adoption of recognized security practices such as those developed under section 405(d) of the Cybersecurity Act of 2015 and covered by these cybersecurity frameworks to improve cybersecurity across the healthcare industry. The update provides incentives in the form of reduced penalties and sanctions and shorter audits and investigations by OCR, which considers the adoption of recognized security practices as a mitigating factor when making determinations about HIPAA Security Rule violations and data breaches.

HIPAA is Only the First Step

The main benefits of HIPAA for healthcare organizations are improvements in efficiency through standardized working practices which eliminate waste, improve patient safety, and boost profits. HIPAA compliance fosters trust between providers and patients and health plans and their members and helps to improve patient outcomes, increase patient and client loyalty, and improve retention.

However, HIPAA is just a set of minimum standards for privacy and security, so HIPAA compliance can be viewed as only the first step. Adopting a cybersecurity framework and implementing recognized security practices will further strengthen an organization’s security posture, and thanks to the HITECH Act update, there is now an added incentive for doing this.

Steve Alder, Editor-in-Chief, HIPAA Journal

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