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The HIPAA Privacy Rule and Your Medical Billing Career

By Allen B. Ury

Medical billing specialists are subject to the same HIPAA Privacy Rule that applies to doctors, nurses and other health care professionals. As a member of the health care industry, you need to know your obligations under the Privacy Rule, why it's important, and the penalties for violating the regulation.

What is HIPAA?

HIPAA is the Health Insurance Portability and Accountability Act of 1996. It sets standards for electronic record keeping and transactions. It allows workers to keep their health coverage when they leave their jobs. And its Privacy Rule ensures the confidentiality of personal medical histories.

The legislators who created HIPAA wanted to lessen the fears many people had about electronic medical records, which were just then becoming popular. Congress saw the transition to digital as critical to improving the efficiency of America's health care system. They believed that tightening regulations would boost public confidence in digital record keeping and thus speed this transition.

The Privacy Rule

Simply put, the Privacy Rule requires people dealing with personal medical records to keep that information confidential except when using them in a purely professional capacity, such as when making medical diagnoses, selecting prescription drugs and, of course, billing. The law originally applied to just medical service providers (doctors, nurses, technicians, etc.), health insurers and people who work for health care clearinghouses. It has since been expanded to cover "business associates" of these "covered entities." So if you're a medical billing specialist who works for a medical practice or an outside medical billing firm, you're still subject to HIPAA's Privacy Rule.

Why Medical Privacy is Important

Medical records are some of the most personal information people have. They often reveal us at our most vulnerable. In the wrong hands, PHI can be used for extortion, public embarrassment or as the basis for job or other economic discrimination. Tens of millions of dollars are spent annually to make sure PHI is kept safe from prying eyes.

Penalties for Violating HIPAA Privacy

If you are charged and convicted of violating the HIPAA Privacy Rule, you can be subject to a range of civil and criminal penalties. The severity of the punishment depends in the nature of the violation and any damage done as a result. Fines range from a minimum of $100 to a maximum of $1.5 million. The maximum criminal penalty is five years in prison.

For More Information

For more information about HIPAA, what it covers and your obligations under it as a health care professional, visit the U.S. Department of Health & Human Services' HIPAA website at


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