The Correct Answer and Explanation is:
The correct answer is B. Administrative Simplification and Insurance Reform.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a comprehensive piece of U.S. federal legislation with two primary objectives, which are reflected in the two major categories that its five titles fall into.
The first major category is Insurance Reform. This was the original and primary motivation for the law. The goal was to make it easier for people to keep health insurance, protect them from losing coverage due to pre-existing conditions, and ensure the portability of their insurance when they changed or lost their jobs. Title I of HIPAA, “Health Care Access, Portability, and Renewability,” directly addresses these issues. Titles III, IV, and V also support this goal by dealing with tax-related health provisions, the application and enforcement of group health plan requirements, and revenue offsets to fund the reforms, respectively. Together, these four titles constitute a significant reform of the health insurance industry.
The second major category is Administrative Simplification. This is the focus of Title II, which is the most well-known part of HIPAA. The law sought to improve the efficiency and effectiveness of the healthcare system by standardizing electronic healthcare transactions, such as claims, eligibility checks, and payments. To support this move to electronic data, Title II also established the crucial Privacy Rule and Security Rule. The Privacy Rule creates national standards to protect individuals’ medical records and other personal health information (PHI). The Security Rule sets standards for the security of electronic protected health information (ePHI). While patient confidentiality and electronic records are critical components, they fall under the broader legislative goal of simplifying administrative processes, making “Administrative Simplification” the correct overarching category.
