The law was approved on August 21, 1996, when President Bill Clinton was presiding over the office, with the primary objectives of assisting more Americans in obtaining healthcare coverage and ensuring that workers wouldn’t lose their medical insurance while they changed employment.
The adoption of HIPAA is also known as the beginning of the modernization of data flow within the healthcare sector.
The federal act established the Security Rule and the Privacy Rule by directing the Secretary of Health and Human Services (HSS) to create regulatory requirements for protecting sensitive health information.
HIPAA also aimed to lessen the administrative load on healthcare companies by streamlining healthcare administration. The HIPAA Administrative Simplification Rules, which mandated that healthcare companies adhere to a new series of principles for healthcare transactions and the use of standard code sets, were crucial in achieving this objective.
However, despite not being a part of the initial legislation in 1996, HIPAA ended up being how the security and privacy of healthcare data were improved, particularly in light of the switch from paper medical records to electronic databases.