Introduction

• The Standards for Privacy of Individually Identifiable Health Information (“Privacy
  Rule”) establishes, for the first time, a set of national standards for the protection of
  certain health information. The U.S. Department of Health and Human Services
  (“HHS”) issued the Privacy Rule to implement the requirement of the Health
  Insurance Portability and Accountability Act of 1996 (“HIPAA”). 1 The Privacy Rule
  standards address the use and disclosure of individuals’ health information—called
  “protected health information” by organizations subject to the Privacy Rule — called
  “covered entities,” as well as standards for individuals’ privacy rights to understand
  and control how their health information is used. Within HHS, the Office for Civil
  Rights (“OCR”) has responsibility for implementing and enforcing the Privacy Rule
  with respect to voluntary compliance activities and civil money penalties.
  A major goal of the Privacy Rule is to assure that individuals’ health information is
  properly protected while allowing the flow of health information needed to provide
  and promote high quality health care and to protect the public’s health and well being.
  The Rule strikes a balance that permits important uses of information, while
  protecting the privacy of people who seek care and healing. Given that the health
  care marketplace is diverse, the Rule is designed to be flexible and comprehensive to
  cover the variety of uses and disclosures that need to be addressed.
  This is a summary of key elements of the Privacy Rule and not a complete or
  comprehensive guide to compliance. Entities regulated by the Rule are obligated to
  comply with all of its applicable requirements and should not rely on this summary as
  a source of legal information or advice. To make it easier for entities to review the
  complete requirements of the Rule, provisions of the Rule referenced in this summary
  are cited in notes at the end of this document. To view the entire Rule, and for other
  additional helpful information about how it applies, see the OCR website:
  http://www.hhs.gov/ocr/hipaa. In the event of a conflict between this summary
  and the Rule, the Rule governs.
  Links to the OCR Guidance Document are provided throughout this paper. Provisions
  of the Rule referenced in this summary are cited in end-notes at the end of this
  document. To review the entire Rule itself, and for other additional helpful
  information about how it applies, see the OCR website:
  http://www.hhs.gov/ocr/hipaa.
  Statutory &
  Regulatory
  Background
  The Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public
  Law 104-191, was enacted on August 21, 1996. Sections 261 through 264 of HIPAA
  require the Secretary of HHS to publicize standards for the electronic exchange,
  privacy and security of health information. Collectively these are known as the
  Administrative Simplification provisions.
  HIPAA required the Secretary to issue privacy regulations governing individually
  identifiable health information, if Congress did not enact privacy legislation within
  OCR Privacy Rule Summary 2 Last Revised 05/03
  three years of the passage of HIPAA. Because Congress did not enact privacy
  legislation, HHS developed a proposed rule and released it for public comment on
  November 3, 1999. The Department received over 52,000 public comments. The
  final regulation, the Privacy Rule, was published December 28, 2000.2
  In March 2002, the Department proposed and released for public comment
  modifications to the Privacy Rule. The Department received over 11,000 comments.
  The final modifications were published in final form on August 14, 2002.3 A text
  combining the final regulation and the modifications can be found at 45 CFR Part
  160 and Part 164, Subparts A and E on the OCR website:
  http://www.hhs.gov/ocr/hipaa.
  Who is
  Covered by the
  Privacy Rule
  The Privacy Rule, as well as all the Administrative Simplification rules, apply to
  health plans, health care clearinghouses, and to any health care provider who
  transmits health information in electronic form in connection with transactions for
  which the Secretary of HHS has adopted standards under HIPAA (the “covered
  entities”). For help in determining whether you are covered, use the decision tool at:
  http://www.cms.hhs.gov/hipaa/hipaa2/support/tools/decisionsupport/default.asp.
  Health Plans. Individual and group plans that provide or pay the cost of medical
  care are covered entities.4 Health plans include health, dental, vision, and
  prescription drug insurers, health maintenance organizations (“HMOs”), Medicare,
  Medicaid, Medicare+Choice and Medicare supplement insurers, and long-term care
  insurers (excluding nursing home fixed-indemnity policies). Health plans also
  include employer-sponsored group health plans, government and church-sponsored
  health plans, and multi-employer health plans. There are exceptions—a group health
  plan with less than 50 participants that is administered solely by the employer that
  established and maintains the plan is not a covered entity. Two types of government
   funded programs are not health plans: (1) those whose principal purpose is not
  providing or paying the cost of health care, such as the food stamps program; and (2)
  those programs whose principal activity is directly providing health care, such as a
  community health center,5 or the making of grants to fund the direct provision of
  health care. Certain types of insurance entities are also not health plans, including
  entities providing only workers’ compensation, automobile insurance, and property
  and casualty insurance.
  Health Care Providers.   Every health care provider, regardless of size, who
  electronically transmits health information in connection with certain transactions, is
  a covered entity. These transactions include claims, benefit eligibility inquiries,
  referral authorization requests, or other transactions for which HHS has established
  standards under the HIPAA Transactions Rule.6 Using electronic technology, such as
  email, does not mean a health care provider is a covered entity; the transmission must
  be in connection with a standard transaction. The Privacy Rule covers a health care
  provider whether it electronically transmits these transactions directly or uses a
  billing service or other third party to do so on its behalf. Health care providers
  include all “providers of services” (e.g., institutional providers such as hospitals) and
  “providers of medical or health services” (e.g., non-institutional providers such as
  physicians, dentists and other practitioners) as defined by Medicare, and any other                                                                                                                                                                                                   person or organization that furnishes, bills, or is paid for health care.
• Health Care Clearinghouses. Health care clearinghouses are entities that process
  nonstandard information they receive from another entity into a standard (i.e.,
  standard format or data content), or vice versa. 7 In most instances, health care
  clearinghouses will receive individually identifiable health information only when
  they are providing these processing services to a health plan or health care provider as
  a business associate. In such instances, only certain provisions of the Privacy Rule are
  applicable to the health care clearinghouse’s uses and disclosures of protected health
  information.8 Health care clearinghouses include billing services, repricing
  companies, community health management information systems, and value-added
  networks and switches if these entities perform clearinghouse functions.
  Business
  Associates
  Business Associate Defined. In general, a business associate is a person or
  organization, other than a member of a covered entity’s workforce, that performs
  certain functions or activities on behalf of, or provides certain services to, a covered
  entity that involve the use or disclosure of individually identifiable health
  information. Business associate functions or activities on behalf of a covered entity
  include claims processing, data analysis, utilization review, and billing.9 Business
  associate services to a covered entity are limited to legal, actuarial, accounting,
  consulting, data aggregation, management, administrative, accreditation, or financial
  services. However, persons or organizations are not considered business associates if
  their functions or services do not involve the use or disclosure of protected health
  information, and where any access to protected health information by such persons
  would be incidental, if at all. A covered entity can be the business associate of
  another covered entity.
  Business Associate Contract. When a covered entity uses a contractor or other nonworkforce
  member to perform “business associate” services or activities, the Rule
  requires that the covered entity include certain protections for the information in a
  business associate agreement (in certain circumstances governmental entities may use
  alternative means to achieve the same protections). In the business associate contract,
  a covered entity must impose specified written safeguards on the individually
  identifiable health information used or disclosed by its business associates.10
  Moreover, a covered entity may not contractually authorize its business associate to
  make any use or disclosure of protected health information that would violate the
  Rule. Covered entities that have an existing written contract or agreement with
  business associates prior to October 15, 2002, which is not renewed or modified prior
  to April 14, 2003, are permitted to continue to operate under that contract until they
  renew the contract or April 14, 2004, whichever is first.11 Sample business associate
  contract language is available on the OCR website at:
  http://www.hhs.gov/ocr/hipaa/contractprov.html. Also see OCR “Business
  Associate” Guidance.
  What
  Information is
  Protected
  Protected Health Information. The Privacy Rule protects all “individually
  identifiable health information” held or transmitted by a covered entity or its business
  associate, in any form or media, whether electronic, paper, or oral. The Privacy Rule
  calls this information “protected health information (PHI).”12
  “Individually identifiable health information” is information, including demographic
  data, that relates to:
  • the individual’s past, present or future physical or mental health or
  condition,
  • the provision of health care to the individual, or
  • the past, present, or future payment for the provision of health care to the
  individual,
  and that identifies the individual or for which there is a reasonable basis to believe
  can be used to identify the individual.13 Individually identifiable health information
  includes many common identifiers (e.g., name, address, birth date, Social Security
  Number).
  The Privacy Rule excludes from protected health information employment records
  that a covered entity maintains in its capacity as an employer and education and
  certain other records subject to, or defined in, the Family Educational Rights and
  Privacy Act, 20 U.S.C. §1232g.
  De-Identified Health Information. There are no restrictions on the use or
  disclosure of de-identified health information.14 De-identified health information
  neither identifies nor provides a reasonable basis to identify an individual. There are
  two ways to de-identify information; either: 1) a formal determination by a qualified
  statistician; or 2) the removal of specified identifiers of the individual and of the
  individual’s relatives, household members, and employers is required, and is
  adequate only if the covered entity has no actual knowledge that the remaining
  information could be used to identify the individual.15
  General
  Principle for
  Uses and
  Disclosures
  Basic Principle. A major purpose of the Privacy Rule is to define and limit the
  circumstances in which an individual’s protected heath information may be used or
  disclosed by covered entities. A covered entity may not use or disclose protected
  health information, except either: (1) as the Privacy Rule permits or requires; or (2) as
  the individual who is the subject of the information (or the individual’s personal
  representative) authorizes in writing.16
  Required Disclosures. A covered entity must disclose protected health information
  in only two situations: (a) to individuals (or their personal representatives)
  specifically when they request access to, or an accounting of disclosures of, their
  protected health information; and (b) to HHS when it is undertaking a compliance
  investigation or review or enforcement action.17 See OCR “Government Access”
  Guidance.
  Permitted Uses
  and Disclosures
  Permitted Uses and Disclosures. A covered entity is permitted, but not required, to
  use and disclose protected health information, without an individual’s authorization,
  for the following purposes or situations: (1) To the Individual (unless required for
  access or accounting of disclosures); (2) Treatment, Payment, and Health Care
  Operations; (3) Opportunity to Agree or Object; (4) Incident to an otherwise
  permitted use and disclosure; (5) Public Interest and Benefit Activities; and(6)                                                                                                                                                                                                   Limited Data Set for the purposes of research, public health or health care
  operations.18 Covered entities may rely on professional ethics and best judgments in
  deciding which of these permissive uses and disclosures to make.
  (1) To the Individual. A covered entity may disclose protected health information to
  the individual who is the subject of the information.
  (2) Treatment, Payment, Health Care Operations. A covered entity may use and
  disclose protected health information for its own treatment, payment, and health care
  operations activities.19 A covered entity also may disclose protected health
  information for the treatment activities of any health care provider, the payment
  activities of another covered entity and of any health care provider, or the health care
  operations of another covered entity involving either quality or competency assurance
  activities or fraud and abuse detection and compliance activities, if both covered
  entities have or had a relationship with the individual and the protected health
  information pertains to the relationship. See OCR “Treatment, Payment, Health Care
  Operations” Guidance.
  Treatment is the provision, coordination, or management of health care and
  related services for an individual by one or more health care providers,
  including consultation between providers regarding a patient and referral of a
  patient by one provider to another.20
  Payment encompasses activities of a health plan to obtain premiums,
  determine or fulfill responsibilities for coverage and provision of benefits,
  and furnish or obtain reimbursement for health care delivered to an
  individual21 and activities of a health care provider to obtain payment or be
  reimbursed for the provision of health care to an individual.
  Health care operations are any of the following activities: (a) quality
  assessment and improvement activities, including case management and care
  coordination; (b) competency assurance activities, including provider or
  health plan performance evaluation, credentialing, and accreditation; (c)
  conducting or arranging for medical reviews, audits, or legal services,
  including fraud and abuse detection and compliance programs; (d) specified
  insurance functions, such as underwriting, risk rating, and reinsuring risk; (e)
  business planning, development, management, and administration; and (f)
  business management and general administrative activities of the entity,
  including but not limited to: de-identifying protected health information,
  creating a limited data set, and certain fundraising for the benefit of the
  covered entity.22
  Most uses and disclosures of psychotherapy notes for treatment, payment, and health
  care operations purposes require an authorization as described below.23
  Obtaining “consent” (written permission from individuals to use and disclose their
  protected health information for treatment, payment, and health care operations) is
  optional under the Privacy Rule for all covered entities.24 The content of a consent
  form, and the process for obtaining consent, are at the discretion of the covered entity
  electing to seek consent.(3) Uses and Disclosures with Opportunity to Agree or Object. Informal
  permission may be obtained by asking the individual outright, or by circumstances
  that clearly give the individual the opportunity to agree, acquiesce, or object. Where
  the individual is incapacitated, in an emergency situation, or not available, covered
  entities generally may make such uses and disclosures, if in the exercise of their
  professional judgment, the use or disclosure is determined to be in the best interests
  of the individual.
  Facility Directories. It is a common practice in many health care facilities,
  such as hospitals, to maintain a directory of patient contact information. A
  covered health care provider may rely on an individual’s informal permission
  to list in its facility directory the individual’s name, general condition,
  religious affiliation, and location in the provider’s facility.25 The provider
  may then disclose the individual’s condition and location in the facility to
  anyone asking for the individual by name, and also may disclose religious
  affiliation to clergy. Members of the clergy are not required to ask for the
  individual by name when inquiring about patient religious affiliation.
  For Notification and Other Purposes. A covered entity also may rely on an
  individual’s informal permission to disclose to the individual’s family,
  relatives, or friends, or to other persons whom the individual identifies,
  protected health information directly relevant to that person’s involvement in
  the individual’s care or payment for care. 26 This provision, for example,
  allows a pharmacist to dispense filled prescriptions to a person acting on
  behalf of the patient. Similarly, a covered entity may rely on an individual’s
  informal permission to use or disclose protected health information for the
  purpose of notifying (including identifying or locating) family members,
  personal representatives, or others responsible for the individual’s care of the
  individual’s location, general condition, or death. In addition, protected
  health information may be disclosed for notification purposes to public or
  private entities authorized by law or charter to assist in disaster relief efforts.
  (4) Incidental Use and Disclosure. The Privacy Rule does not require that every
  risk of an incidental use or disclosure of protected health information be eliminated.
  A use or disclosure of this information that occurs as a result of, or as “incident to,”
  an otherwise permitted use or disclosure is permitted as long as the covered entity has
  adopted reasonable safeguards as required by the Privacy Rule, and the information
  being shared was limited to the “minimum necessary,” as required by the Privacy
  Rule.27 See OCR “Incidental Uses and Disclosures” Guidance.
  (5) Public Interest and Benefit Activities. The Privacy Rule permits use and
  disclosure of protected health information, without an individual’s authorization or
  permission, for 12 national priority purposes.28 These disclosures are permitted,
  although not required, by the Rule in recognition of the important uses made of health
  information outside of the health care context. Specific conditions or limitations
  apply to each public interest purpose, striking the balance between the individual
  privacy interest and the public interest need for this information.
  Required by Law. Covered entities may use and disclose protected health
  information without individual authorization as required by law (including by
  statute, regulation, or court orders).29
  Public Health Activities. Covered entities may disclose protected health
  information to: (1) public health authorities authorized by law to collect or
  receive such information for preventing or controlling disease, injury, or
  disability and to public health or other government authorities authorized to
  receive reports of child abuse and neglect; (2) entities subject to FDA
  regulation regarding FDA regulated products or activities for purposes such
  as adverse event reporting, tracking of products, product recalls, and postmarketing
  surveillance; (3) individuals who may have contracted or been
  exposed to a communicable disease when notification is authorized by law;
  and (4) employers, regarding employees, when requested by employers, for
  information concerning a work-related illness or injury or workplace related
  medical surveillance, because such information is needed by the employer to
  comply with the Occupational Safety and Health Administration (OHSA),
  the Mine Safety and Health Administration (MHSA), or similar state law.30
  See OCR “Public Health” Guidance; CDC Public Health and HIPAA
  Guidance.
  Victims of Abuse, Neglect or Domestic Violence. In certain circumstances,
  covered entities may disclose protected health information to appropriate
  government authorities regarding victims of abuse, neglect, or domestic
  violence.31
  Health Oversight Activities. Covered entities may disclose protected health
  information to health oversight agencies (as defined in the Rule) for purposes
  of legally authorized health oversight activities, such as audits and
  investigations necessary for oversight of the health care system and
  government benefit programs.32
  Judicial and Administrative Proceedings. Covered entities may disclose
  protected health information in a judicial or administrative proceeding if the
  request for the information is through an order from a court or administrative
  tribunal. Such information may also be disclosed in response to a subpoena
  or other lawful process if certain assurances regarding notice to the individual
  or a protective order are provided.33
  Law Enforcement Purposes. Covered entities may disclose protected health
  information to law enforcement officials for law enforcement purposes under
  the following six circumstances, and subject to specified conditions: (1) as
  required by law (including court orders, court-ordered warrants, subpoenas)
  and administrative requests; (2) to identify or locate a suspect, fugitive,
  material witness, or missing person; (3) in response to a law enforcement
  official’s request for information about a victim or suspected victim of a
  crime; (4) to alert law enforcement of a person’s death, if the covered entity
  suspects that criminal activity caused the death; (5) when a covered entity
  believes that protected health information is evidence of a crime that
  occurred on its premises; and (6) by a covered health care provider in a
  medical emergency not occurring on its premises, when necessary to inform
  law enforcement about the commission and nature of a crime, the location of
  the crime or crime victims, and the perpetrator of the crime.34Decedents.
• Covered entities may disclose protected health information to
  funeral directors as needed, and to coroners or medical examiners to identify
  a deceased person, determine the cause of death, and perform other functions
  authorized by law.35
  Cadaveric Organ, Eye, or Tissue Donation. Covered entities may use or
  disclose protected health information to facilitate the donation and
  transplantation of cadaveric organs, eyes, and tissue.36
  Research. “Research” is any systematic investigation designed to develop or
  contribute to generalizable knowledge.37 The Privacy Rule permits a covered
  entity to use and disclose protected health information for research purposes,
  without an individual’s authorization, provided the covered entity obtains
  either: (1) documentation that an alteration or waiver of individuals’
  authorization for the use or disclosure of protected health information about
  them for research purposes has been approved by an Institutional Review
  Board or Privacy Board; (2) representations from the researcher that the use
  or disclosure of the protected health information is solely to prepare a
  research protocol or for similar purpose preparatory to research, that the
  researcher will not remove any protected health information from the covered
  entity, and that protected health information for which access is sought is
  necessary for the research; or (3) representations from the researcher that the
  use or disclosure sought is solely for research on the protected health
  information of decedents, that the protected health information sought is
  necessary for the research, and, at the request of the covered entity,
  documentation of the death of the individuals about whom information is
  sought.38 A covered entity also may use or disclose, without an individuals’
  authorization, a limited data set of protected health information for research
  purposes (see discussion below).39 See OCR “Research” Guidance; NIH
  Protecting PHI in Research.
  Serious Threat to Health or Safety. Covered entities may disclose protected
  health information that they believe is necessary to prevent or lessen a serious
  and imminent threat to a person or the public, when such disclosure is made
  to someone they believe can prevent or lessen the threat (including the target
  of the threat). Covered entities may also disclose to law enforcement if the
  information is needed to identify or apprehend an escapee or violent
  criminal.40
  Essential Government Functions. An authorization is not required to use or
  disclose protected health information for certain essential government
  functions. Such functions include: assuring proper execution of a military
  mission, conducting intelligence and national security activities that are
  authorized by law, providing protective services to the President, making
  medical suitability determinations for U.S. State Department employees,
  protecting the health and safety of inmates or employees in a correctional
  institution, and determining eligibility for or conducting enrollment in certain
  government benefit programs.41Workers’ Compensation. Covered entities may disclose
  protected health information as authorized by, and to comply with, workers’ compensation
  laws and other similar programs providing benefits for work-related injuries
  or illnesses.42 See OCR “Workers’ Compensation” Guidance.
  (6) Limited Data Set. A limited data set is protected health information from which
  certain specified direct identifiers of individuals and their relatives, household
  members, and employers have been removed.43 A limited data set may be used and
  disclosed for research, health care operations, and public health purposes, provided
  the recipient enters into a data use agreement promising specified safeguards for the
  protected health information within the limited data set.
  Authorized
  Uses and
  Disclosures
  Authorization. A covered entity must obtain the individual’s written authorization
  for any use or disclosure of protected health information that is not for treatment,
  payment or health care operations or otherwise permitted or required by the Privacy
  Rule.44 A covered entity may not condition treatment, payment, enrollment, or
  benefits eligibility on an individual granting an authorization, except in limited
  circumstances.45
  An authorization must be written in specific terms. It may allow use and disclosure
  of protected health information by the covered entity seeking the authorization, or by
  a third party. Examples of disclosures that would require an individual’s
  authorization include disclosures to a life insurer for coverage purposes, disclosures
  to an employer of the results of a pre-employment physical or lab test, or disclosures
  to a pharmaceutical firm for their own marketing purposes.
  All authorizations must be in plain language, and contain specific information
  regarding the information to be disclosed or used, the person(s) disclosing and
  receiving the information, expiration, right to revoke in writing, and other data. The
  Privacy Rule contains transition provisions applicable to authorizations and other
  express legal permissions obtained prior to April 14, 2003. 46
  Psychotherapy Notes47. A covered entity must obtain an individual’s authorization
  to use or disclose psychotherapy notes with the following exceptions48:
  • The covered entity who originated the notes may use them for treatment.
  • A covered entity may use or disclose, without an individual’s authorization,
  the psychotherapy notes, for its own training, and to defend itself in legal
  proceedings brought by the individual, for HHS to investigate or determine
  the covered entity’s compliance with the Privacy Rules, to avert a serious and
  imminent threat to public health or safety, to a health oversight agency for
  lawful oversight of the originator of the psychotherapy notes, for the lawful
  activities of a coroner or medical examiner or as required by law.
  Marketing. Marketing is any communication about a product or service that
  encourages recipients to purchase or use the product or service.49 The Privacy Rule
  carves out the following health-related activities from this definition of marketing:
  • Communications to describe health-related products or services, or payment for making
  the communication; them, provided by or included in a benefit plan of the covered entity
  • Communications about participating providers in a provider or health plan
  network, replacement of or enhancements to a health plan, and health-related
  products or services available only to a health plan’s enrollees that add value
  to, but are not part of, the benefits plan;
  • Communications for treatment of the individual; and
  • Communications for case management or care coordination for the
  individual, or to direct or recommend alternative treatments, therapies,
  health care providers, or care settings to the individual.
  Marketing also is an arrangement between a covered entity and any other entity
  whereby the covered entity discloses protected health information, in exchange for
  direct or indirect remuneration, for the other entity to communicate about its own
  products or services encouraging the use or purchase of those products or services.
  A covered entity must obtain an authorization to use or disclose protected health
  information for marketing, except for face-to-face marketing communications
  between a covered entity and an individual, and for a covered entity’s provision of
  promotional gifts of nominal value. No authorization is needed, however, to make a
  communication that falls within one of the exceptions to the marketing definition.
  An authorization for marketing that involves the covered entity’s receipt of direct or
  indirect remuneration from a third party must reveal that fact. See OCR “Marketing”
  Guidance.
  Limiting Uses
  and Disclosures
  to the
  Minimum
  Necessary
  Minimum Necessary. A central aspect of the Privacy Rule is the principle of
  “minimum necessary” use and disclosure. A covered entity must make reasonable
  efforts to use, disclose, and request only the minimum amount of protected health
  information needed to accomplish the intended purpose of the use, disclosure, or
  request.50 A covered entity must develop and implement policies and procedures to
  reasonably limit uses and disclosures to the minimum necessary. When the minimum
  necessary standard applies to a use or disclosure, a covered entity may not use,
  disclose, or request the entire medical record for a particular purpose, unless it can
  specifically justify the whole record as the amount reasonably needed for the purpose.
  See OCR “Minimum Necessary” Guidance.
  The minimum necessary requirement is not imposed in any of the following
  circumstances: (a) disclosure to or a request by a health care provider for treatment;
  (b) disclosure to an individual who is the subject of the information, or the
  individual’s personal representative; (c) use or disclosure made pursuant to an
  authorization; (d) disclosure to HHS for complaint investigation, compliance review
  or enforcement; (e) use or disclosure that is required by law; or (f) use or disclosure
  required for compliance with the HIPAA Transactions Rule or other HIPAA
  Administrative Simplification Rules.
  Access and Uses. For internal uses, a covered entity must develop and implement
  policies and procedures that restrict access and uses of protected health information
  based on the specific roles of the members of their workforce. These policies and
  procedures must identify the persons, or classes of persons, in the workforce who
  need access to protected health information to carry out their duties, the categories of                                                                                                                                                                               protected health information to which access is needed, and any conditions under
  which they need the information to do their jobs.
  Disclosures and Requests for Disclosures. Covered entities must establish and
  implement policies and procedures (which may be standard protocols) for routine,
  recurring disclosures, or requests for disclosures, that limits the protected health
  information disclosed to that which is the minimum amount reasonably necessary to
  achieve the purpose of the disclosure. Individual review of each disclosure is not
  required. For non-routine, non-recurring disclosures, or requests for disclosures that
  it makes, covered entities must develop criteria designed to limit disclosures to the
  information reasonably necessary to accomplish the purpose of the disclosure and
  review each of these requests individually in accordance with the established criteria.
  Reasonable Reliance. If another covered entity makes a request for protected health
  information, a covered entity may rely, if reasonable under the circumstances, on the
  request as complying with this minimum necessary standard. Similarly, a covered
  entity may rely upon requests as being the minimum necessary protected health
  information from: (a) a public official, (b) a professional (such as an attorney or
  accountant) who is the covered entity’s business associate, seeking the information to
  provide services to or for the covered entity; or (c) a researcher who provides the
  documentation or representation required by the Privacy Rule for research.
  Notice and
  Other
  Individual
  Rights
  Privacy Practices Notice. Each covered entity, with certain exceptions, must
  provide a notice of its privacy practices.51 The Privacy Rule requires that the notice
  contain certain elements. The notice must describe the ways in which the covered
  entity may use and disclose protected health information. The notice must state the
  covered entity’s duties to protect privacy, provide a notice of privacy practices, and
  abide by the terms of the current notice. The notice must describe individuals’ rights,
  including the right to complain to HHS and to the covered entity if they believe their
  privacy rights have been violated. The notice must include a point of contact for
  further information and for making complaints to the covered entity. Covered entities
  must act in accordance with their notices. The Rule also contains specific
  distribution requirements for direct treatment providers, all other health care
  providers, and health plans. See OCR “Notice” Guidance.
  • Notice Distribution. A covered health care provider with a direct treatment
  relationship with individuals must deliver a privacy practices notice to
  patients starting April 14, 2003 as follows:
  o Not later than the first service encounter by personal delivery (for
  patient visits), by automatic and contemporaneous electronic
  response (for electronic service delivery), and by prompt mailing (for
  telephonic service delivery);
  o By posting the notice at each service delivery site in a clear and
  prominent place where people seeking service may reasonably be
  expected to be able to read the notice; and
  o In emergency treatment situations, the provider must furnish its
  notice as soon as practicable after the emergency abates.Covered entities,
• whether direct treatment providers or indirect treatment
  providers (such as laboratories) or health plans must supply notice to anyone
  on request.52 A covered entity must also make its notice electronically
  available on any web site it maintains for customer service or benefits
  information.
  The covered entities in an organized health care arrangement may use a joint
  privacy practices notice, as long as each agrees to abide by the notice content
  with respect to the protected health information created or received in
  connection with participation in the arrangement.53 Distribution of a joint
  notice by any covered entity participating in the organized health care
  arrangement at the first point that an OHCA member has an obligation to
  provide notice satisfies the distribution obligation of the other participants in
  the organized health care arrangement.
  A health plan must distribute its privacy practices notice to each of its
  enrollees by its Privacy Rule compliance date. Thereafter, the health plan
  must give its notice to each new enrollee at enrollment, and send a reminder
  to every enrollee at least once every three years that the notice is available
  upon request. A health plan satisfies its distribution obligation by furnishing
  the notice to the “named insured,” that is, the subscriber for coverage that
  also applies to spouses and dependents.
  • Acknowledgement of Notice Receipt. A covered health care provider with
  a direct treatment relationship with individuals must make a good faith effort
  to obtain written acknowledgement from patients of receipt of the privacy
  practices notice.54 The Privacy Rule does not prescribe any particular content
  for the acknowledgement. The provider must document the reason for any
  failure to obtain the patient’s written acknowledgement. The provider is
  relieved of the need to request acknowledgement in an emergency treatment
  situation.
  Access. Except in certain circumstances, individuals have the right to review and
  obtain a copy of their protected health information in a covered entity’s designated
  record set.55 The “designated record set” is that group of records maintained by or
  for a covered entity that is used, in whole or part, to make decisions about
  individuals, or that is a provider’s medical and billing records about individuals or a
  health plan’s enrollment, payment, claims adjudication, and case or medical
  management record systems.56 The Rule excepts from the right of access the
  following protected health information: psychotherapy notes, information compiled
  for legal proceedings, laboratory results to which the Clinical Laboratory
  Improvement Act (CLIA) prohibits access, or information held by certain research
  laboratories. For information included within the right of access, covered entities
  may deny an individual access in certain specified situations, such as when a health
  care professional believes access could cause harm to the individual or another. In
  such situations, the individual must be given the right to have such denials reviewed
  by a licensed health care professional for a second opinion.57 Covered entities may
  impose reasonable, cost-based fees for the cost of copying and postage.
  Amendment. The Rule gives individuals the right to have covered entities amend
  their protected health information in a designated record set when that information is
• inaccurate or incomplete. 58 If a covered entity accepts an amendment request, it must
  make reasonable efforts to provide the amendment to persons that the individual has
  identified as needing it, and to persons that the covered entity knows might rely on
  the information to the individual’s detriment.59 If the request is denied, covered
  entities must provide the individual with a written denial and allow the individual to
  submit a statement of disagreement for inclusion in the record. The Rule specifies
  processes for requesting and responding to a request for amendment. A covered
  entity must amend protected health information in its designated record set upon
  receipt of notice to amend from another covered entity.
  Disclosure Accounting. Individuals have a right to an accounting of the disclosures
  of their protected health information by a covered entity or the covered entity’s
  business associates.60 The maximum disclosure accounting period is the six years
  immediately preceding the accounting request, except a covered entity is not
  obligated to account for any disclosure made before its Privacy Rule compliance date.
  The Privacy Rule does not require accounting for disclosures: (a) for treatment,
  payment, or health care operations; (b) to the individual or the individual’s personal
  representative; (c) for notification of or to persons involved in an individual’s health
  care or payment for health care, for disaster relief, or for facility directories; (d)
  pursuant to an authorization; (e) of a limited data set; (f) for national security or
  intelligence purposes; (g) to correctional institutions or law enforcement officials for
  certain purposes regarding inmates or individuals in lawful custody; or (h) incident to
  otherwise permitted or required uses or disclosures. Accounting for disclosures to
  health oversight agencies and law enforcement officials must be temporarily
  suspended on their written representation that an accounting would likely impede
  their activities.
  Restriction Request. Individuals have the right to request that a covered entity
  restrict use or disclosure of protected health information for treatment, payment or
  health care operations, disclosure to persons involved in the individual’s health care
  or payment for health care, or disclosure to notify family members or others about the
  individual’s general condition, location, or death.61 A covered entity is under no
  obligation to agree to requests for restrictions. A covered entity that does agree must
  comply with the agreed restrictions, except for purposes of treating the individual in a
  medical emergency.62
  Confidential Communications Requirements. Health plans and covered health
  care providers must permit individuals to request an alternative means or location for
  receiving communications of protected health information by means other than those
  that the covered entity typically employs.63 For example, an individual may request
  that the provider communicate with the individual through a designated address or
  phone number. Similarly, an individual may request that the provider send
  communications in a closed envelope rather than a post card.
  Health plans must accommodate reasonable requests if the individual indicates that
  the disclosure of all or part of the protected health information could endanger the
  individual. The health plan may not question the individual’s statement of
  endangerment. Any covered entity may condition compliance with a confidential
  communication request on the individual specifying an alternative address or method
  of contact and explaining how any payment will be handled.Administrative
  Requirements
  HHS recognizes that covered entities range from the smallest provider to the largest,
  multi-state health plan. Therefore the flexibility and scalability of the Rule are
  intended to allow covered entities to analyze their own needs and implement
  solutions appropriate for their own environment. What is appropriate for a particular
  covered entity will depend on the nature of the covered entity’s business, as well as
  the covered entity’s size and resources.
  Privacy Policies and Procedures. A covered entity must develop and implement
  written privacy policies and procedures that are consistent with the Privacy Rule.64
  Privacy Personnel. A covered entity must designate a privacy official responsible
  for developing and implementing its privacy policies and procedures, and a contact
  person or contact office responsible for receiving complaints and providing
  individuals with information on the covered entity’s privacy practices.65
  Workforce Training and Management. Workforce members include employees,
  volunteers, trainees, and may also include other persons whose conduct is under the
  direct control of the entity (whether or not they are paid by the entity).66 A covered
  entity must train all workforce members on its privacy policies and procedures, as
  necessary and appropriate for them to carry out their functions.67 A covered entity
  must have and apply appropriate sanctions against workforce members who violate
  its privacy policies and procedures or the Privacy Rule.68
  Mitigation. A covered entity must mitigate, to the extent practicable, any harmful
  effect it learns was caused by use or disclosure of protected health information by its
  workforce or its business associates in violation of its privacy policies and procedures
  or the Privacy Rule.69
  Data Safeguards. A covered entity must maintain reasonable and appropriate
  administrative, technical, and physical safeguards to prevent intentional or
  unintentional use or disclosure of protected health information in violation of the
  Privacy Rule and to limit its incidental use and disclosure pursuant to otherwise
  permitted or required use or disclosure.70 For example, such safeguards might
  include shredding documents containing protected health information before
  discarding them, securing medical records with lock and key or pass code, and
  limiting access to keys or pass codes. See OCR “Incidental Uses and Disclosures”
  Guidance.
  Complaints. A covered entity must have procedures for individuals to complain
  about its compliance with its privacy policies and procedures and the Privacy Rule.71
  The covered entity must explain those procedures in its privacy practices notice.72
  Among other things, the covered entity must identify to whom individuals can submit
  complaints to at the covered entity and advise that complaints also can be submitted
  to the Secretary of HHS.
  Retaliation and Waiver. A covered entity may not retaliate against a person for
  exercising rights provided by the Privacy Rule, for assisting in an investigation by
  HHS or another appropriate authority, or for opposing an act or practice that the
  person believes in good faith violates the Privacy Rule.73 A covered entity may not
• require an individual to waive any right under the Privacy Rule as a condition for
  obtaining treatment, payment, and enrollment or benefits eligibility.74
  Documentation and Record Retention. A covered entity must maintain, until six
  years after the later of the date of their creation or last effective date, its privacy
  policies and procedures, its privacy practices notices, disposition of complaints, and
  other actions, activities, and designations that the Privacy Rule requires to be
  documented.75
  Fully-Insured Group Health Plan Exception. The only administrative obligations
  with which a fully-insured group health plan that has no more than enrollment data
  and summary health information is required to comply are the (1) ban on retaliatory
  acts and waiver of individual rights, and (2) documentation requirements with respect
  to plan documents if such documents are amended to provide for the disclosure of
  protected health information to the plan sponsor by a health insurance issuer or HMO
  that services the group health plan.76
  Organizational
  Options
  The Rule contains provisions that address a variety of organizational issues that may
  affect the operation of the privacy protections.
  Hybrid Entity. The Privacy Rule permits a covered entity that is a single legal entity
  and that conducts both covered and non-covered functions to elect to be a “hybrid
  entity.”77 (The activities that make a person or organization a covered entity are its
  “covered functions.”78) To be a hybrid entity, the covered entity must designate in
  writing its operations that perform covered functions as one or more “health care
  components.” After making this designation, most of the requirements of the Privacy
  Rule will apply only to the health care components. A covered entity that does not
  make this designation is subject in its entirety to the Privacy Rule.
  Affiliated Covered Entity. Legally separate covered entities that are affiliated by
  common ownership or control may designate themselves (including their health care
  components) as a single covered entity for Privacy Rule compliance.79 The
  designation must be in writing. An affiliated covered entity that performs multiple
  covered functions must operate its different covered functions in compliance with the
  Privacy Rule provisions applicable to those covered functions.
  Organized Health Care Arrangement. The Privacy Rule identifies relationships in
  which participating covered entities share protected health information to manage and
  benefit their common enterprise as “organized health care arrangements.”80 Covered
  entities in an organized health care arrangement can share protected health
  information with each other for the arrangement’s joint health care operations.81
  Covered Entities With Multiple Covered Functions. A covered entity that
  performs multiple covered functions must operate its different covered functions in
  compliance with the Privacy Rule provisions applicable to those covered functions.82
  The covered entity may not use or disclose the protected health information of an
  individual who receives services from one covered function (e.g., health care
  provider) for another covered function (e.g., health plan) if the individual is not
  involved with the other function.
• Group Health Plan disclosures to Plan Sponsors. A group health plan and the
  health insurer or HMO offered by the plan may disclose the following protected
  health information to the “plan sponsor”—the employer, union, or other employee
  organization that sponsors and maintains the group health plan83:
  • Enrollment or disenrollment information with respect to the group health
  plan or a health insurer or HMO offered by the plan.
  • If requested by the plan sponsor, summary health information for the plan
  sponsor to use to obtain premium bids for providing health insurance
  coverage through the group health plan, or to modify, amend, or terminate
  the group health plan. “Summary health information” is information that
  summarizes claims history, claims expenses, or types of claims experience of
  the individuals for whom the plan sponsor has provided health benefits
  through the group health plan, and that is stripped of all individual identifiers
  other than five digit zip code (though it need not qualify as de-identified
  protected health information).
  • Protected health information of the group health plan’s enrollees for the plan
  sponsor to perform plan administration functions. The plan must receive
  certification from the plan sponsor that the group health plan document has
  been amended to impose restrictions on the plan sponsor’s use and disclosure
  of the protected health information. These restrictions must include the
  representation that the plan sponsor will not use or disclose the protected
  health information for any employment-related action or decision or in
  connection with any other benefit plan.
  Other
  Provisions:
  Personal
  Representatives
  and Minors
  Personal Representatives. The Privacy Rule requires a covered entity to treat a
  “personal representative” the same as the individual, with respect to uses and
  disclosures of the individual’s protected health information, as well as the
  individual’s rights under the Rule.84 A personal representative is a person legally
  authorized to make health care decisions on an individual’s behalf or to act for a
  deceased individual or the estate. The Privacy Rule permits an exception when a
  covered entity has a reasonable belief that the personal representative may be abusing
  or neglecting the individual, or that treating the person as the personal representative
  could otherwise endanger the individual.
  Special case: Minors. In most cases, parents are the personal representatives for
  their minor children. Therefore, in most cases, parents can exercise individual rights,
  such as access to the medical record, on behalf of their minor children. In certain
  exceptional cases, the parent is not considered the personal representative. In these
  situations, the Privacy Rule defers to State and other law to determine the rights of
  parents to access and control the protected health information of their minor children.
  If State and other law is silent concerning parental access to the minor’s protected
  health information, a covered entity has discretion to provide or deny a parent access
  to the minor’s health information, provided the decision is made by a licensed health
  care professional in the exercise of professional judgment. See OCR “Personal
  Representatives” Guidance.State Law
  Preemption. In general, State laws that are contrary to the Privacy Rule are
  preempted by the federal requirements, which means that the federal requirements
  will apply.85 “Contrary” means that it would be impossible for a covered entity to
  comply with both the State and federal requirements, or that the provision of State
  law is an obstacle to accomplishing the full purposes and objectives of the
  Administrative Simplification provisions of HIPAA.86 The Privacy Rule provides
  exceptions to the general rule of federal preemption for contrary State laws that (1)
  relate to the privacy of individually identifiable health information and provide
  greater privacy protections or privacy rights with respect to such information, (2)
  provide for the reporting of disease or injury, child abuse, birth, or death, or for
  public health surveillance, investigation, or intervention, or (3) require certain health
  plan reporting, such as for management or financial audits.
  Exception Determination. In addition, preemption of a contrary State law will not
  occur if HHS determines, in response to a request from a State or other entity or
  person, that the State law:
  • Is necessary to prevent fraud and abuse related to the provision of or payment
  for health care,
  • Is necessary to ensure appropriate State regulation of insurance and health
  plans to the extent expressly authorized by statute or regulation,
  • Is necessary for State reporting on health care delivery or costs,
  • Is necessary for purposes of serving a compelling public health, safety, or
  welfare need, and, if a Privacy Rule provision is at issue, if the Secretary
  determines that the intrusion into privacy is warranted when balanced against
  the need to be served; or
  • Has as its principal purpose the regulation of the manufacture, registration,
  distribution, dispensing, or other control of any controlled substances (as
  defined in 21 U.S.C. 802), or that is deemed a controlled substance by State
  law.
  Enforcement
  and Penalties
  for
  Noncompliance
  Compliance. Consistent with the principles for achieving compliance provided in
  the Rule, HHS will seek the cooperation of covered entities and may provide
  technical assistance to help them comply voluntarily with the Rule.87 The Rule
  provides processes for persons to file complaints with HHS, describes the
  responsibilities of covered entities to provide records and compliance reports and to
  cooperate with, and permit access to information for, investigations and compliance
  reviews.
  Civil Money Penalties. HHS may impose civil money penalties on a covered entity
  of $100 per failure to comply with a Privacy Rule requirement.88 That penalty may
  not exceed $25,000 per year for multiple violations of the identical Privacy Rule
  requirement in a calendar year. HHS may not impose a civil money penalty under
  specific circumstances, such as when a violation is due to reasonable cause and did
  not involve willful neglect and the covered entity corrected the violation within 30
  days of when it knew or should have known of the violation.
• Criminal Penalties. A person who knowingly obtains or discloses individually
  identifiable health information in violation of HIPAA faces a fine of $50,000 and up
  to one-year imprisonment.89 The criminal penalties increase to $100,000 and up to
  five years imprisonment if the wrongful conduct involves false pretenses, and to
  $250,000 and up to ten years imprisonment if the wrongful conduct involves the
  intent to sell, transfer, or use individually identifiable health information for
  commercial advantage, personal gain, or malicious harm. Criminal sanctions will be
  enforced by the Department of Justice.
  Compliance
  Dates
  Compliance Schedule. All covered entities, except “small health plans,” must be
  compliant with the Privacy Rule by April 14, 2003.90 Small health plans, however,
  have until April 14, 2004 to comply.
  Small Health Plans. A health plan with annual receipts of not more than $5 million
  is a small health plan.91 Health plans that file certain federal tax returns and report
  receipts on those returns should use the guidance provided by the Small Business
  Administration at 13 Code of Federal Regulations (CFR) 121.104 to calculate annual
  receipts. Health plans that do not report receipts to the Internal Revenue Service
  (IRS), for example, group health plans regulated by the Employee Retirement Income
  Security Act 1974 (ERISA) that are exempt from filing income tax returns, should
  use proxy measures to determine their annual receipts.92
  See What constitutes a small health plan?
  Copies of the
  Rule & Related
  Materials
  The entire Privacy Rule, as well as guidance and additional materials, may be found  
• on our website, http://www.hhs.gov/ocr/hipaa.