Under the strict vigilance and strict guidelines governed by The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provision has been made for security rule which has three parts:

Administrative Safeguards are provided for access policies and strict procedures designed to clearly show compliance by the covered entity under HIPAA.

Physical Safeguards – All kind of Physical access to the patient’s PHI must have restricted and controlled access to provide guard against unauthorized access to medial data.

Technical Safeguards – All covered entities which are engaged in the handling of the patient’s PHI must put proper procedures in place to control access to data and computer systems and protection of all communications containing patient’s PHI. All such communications must be properly encrypted to protect against interception and unauthorized access.

The main goal of all the Administrative Simplification contained in HIPAA is to allow simplification and streamlining of the administration relating to health care. HIPAA has essentially created standards to facilitate the various types of medical electronic transactions of all kinds. No insurer can ask additional documents from any claims submitter in any other electronic formats except for those provided under the regulatory framework of The Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Initially it requires a little bit of extra work for the patient, the doctors and all the covered entities affected, but once the data has been captured and enters the stream it’s a breeze filing your medical insurance claims electronically and get the payments in no time as per standards set forth by HIPAA. HIPAA requires the filing of claims in ANSI 837 format as such now filing of electronic claim forms is a piece of cake.

Under the system used prior to HIPAA, a health insurer required filing of all claims in HL7 format while others had their own independent formats. The multiplicity of formats in the US was such a chaos that at the time HIPAA was implemented there were not less than 400 different formats in use by different companies. HIPAA reduced all those 400 plus format to a single format.