HIPAA Compliance If you're in the healthcare industry, you've probably heard some rumors about the Health Insurance Portability and Accountability Act of 1996, coldly referred to as HIPAA. It says your medical practice will have to be HIPAA compliant by April 2003, but you're not exactly sure what this act requires or how to accomplish it. In very simple terms, HIPAA has two main components that hospitals, health plans, healthcare clearinghouses, and healthcare providers must comply with: 1) administrative simplification, which requires the use of the same IT language across the industry; 2) Privacy protection, which requires healthcare providers to take reasonable measures to protect patients' written, oral and electronic information. Congress passed HIPAA in an effort to “protect the privacy and security of individually identifiable health information.” 1 Additionally, lawmakers “have sought to reduce the administrative costs and burdens associated with health care by standardizing data and facilitating the transmission of many administrative and financial transactions.” 1 HIPAA advisors say the new regulations should save the healthcare industry money in the long term, provide greater security of patient information, and allow patients to have better access to their health information. While HIPAA regulations require the medical industry to review how it protects patient information, the standards put in place by HIPAA do not ...