Why is HIPAA Important?

HIPAA Regulations

HIPAA is important because it creates a federal floor of privacy and security protection for individually identifiable health information created, collected, maintained, or transmitted by a HIPAA-covered entity or business associate.

HIPAA also helps simplify healthcare transactions and reduce healthcare fraud by providing standard code sets and operating rules for events such as eligibility checks, treatment authorizations and payment claims. The code sets and operating rules make the delivery of healthcare more cost effective to manage the costs of health insurance coverage.

HIPAA and Healthcare Providers

HIPAA also played an important part in encouraging healthcare organizations to transition from paper records to digital copies of health data. The regulation helped simplify administrative healthcare functions and has helped to make sure that PHI is shared securely. The establishment of standards for documenting health information and electronic transactions ensures patients’ private data are always handled in the same way, regardless of which healthcare provider they go to. HIPAA-covered entities need to use similar sets of codes and adopt nationally accepted identifiers, and this has helped healthcare organizations share ePHI with other healthcare providers, health plans, and other covered entities.

HIPAA and Patients

HIPAA is vital for patients because it requires healthcare providers, health plans, business associates and healthcare clearinghouses to implement security measures to ensure sensitive health information remains private and confidential.

Even though healthcare organizations would most likely take steps to keep sensitive health data private and make it harder for health data to be stolen, without HIPAA, healthcare organizations would not be obliged to do so and they would not be accountable for privacy violations and security failures.

HIPAA introduced rules that require healthcare organizations to restrict the persons who have access to health information. This limits the people that can view and share health data. For example, a nurse or other healthcare worker would is not allowed to access the records of a patient if there is not a legitimate work reason for accessing those records.


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HIPAA also allows patients to control the types of people their health data is shared with. HIPAA is also vital for patients who would like to be more active in their healthcare and obtain and check their medical records. Healthcare providers may make mistakes when recording health data. If patients were unable to obtain copies of their medical records, it would not be possible for them to check for mistakes and ensure those mistakes are corrected.

Obtaining a copy of health data can also help patients if they change healthcare providers. It helps them to transfer those medical records to new providers, which helps to ensure they get the best treatment and means that medical tests do not have to be repeated. Prior to the introduction of the HIPAA Privacy Rule, healthcare organizations were not obliged to provide patients with copies of their medical records.

The importance of HIPAA: FAQ

Can patients sue for HIPAA violations?

No, patients cannot sue if their PHI has been leaked as part of a HIPAA breach. This is because HIPAA does not have a private cause of action, so even if a patient has suffered damages as a consequence of a clear HIPAA violation, they cannot receive compensation under HIPAA. They may, however, be able to receive compensation if the breach was also a violation of state law.

What are the penalties for HIPAA violations?

There is a range of penalties for HIPAA violations, depending on the scale and severity of the violation. The Department of Health and Human Services’ Office for Civil Rights (OCR) is responsible for issuing fines and/or requesting corrective plans if a HIPAA violation occurs. In less severe breaches, the OCR may request that a correction action plan is devised and implemented within a certain time frame. They may also issue fines for violations. There are four categories of violation, ranging from Category 1 (where the CE was unaware that the violation occurred but could not have reasonably prevented it) to Category 4 (willful neglect). The latter attracts the highest penalties (a minimum of $50,000 per violation). Criminal charges may also be fined.

How does HIPAA benefit patients?

HIPAA was developed with patient rights in mind. It was originally established to reform the health insurance industry, but is now most associated with protecting patient privacy. By requiring that minimum safeguards are in place to prevent sensitive information from being accessed by unauthorized individuals, HIPAA protects patients from identity theft or insurance fraud. It also grants them the right to access their PHI and request that it is amended if it is inaccurate. This grants patients greater autonomy over their healthcare.

Do employees need to be trained in HIPAA?

Yes, given the importance of HIPAA and the penalties HIPAA violations can attract, it is essential that all employees in CEs or BAs that come into contact with PHI are HIPAA trained. This training should cover the basics of HIPAA, including the appropriate use and disclosure of PHI, alongside any job-specific requirements that may exist.

About Liam Johnson
Liam Johnson has produced articles about HIPAA for several years. He has extensive experience in healthcare privacy and security. With a deep understanding of the complex legal and regulatory landscape surrounding patient data protection, Liam has dedicated his career to helping organizations navigate the intricacies of HIPAA compliance. Liam focusses on the challenges faced by healthcare providers, insurance companies, and business associates in complying with HIPAA regulations. Liam has been published in leading healthcare publications, including The HIPAA Journal. Liam was appointed Editor-in-Chief of The HIPAA Guide in 2023. Contact Liam via LinkedIn: https://www.linkedin.com/in/liamhipaa/