Comparing HIPAA & GLBA - Essay Example

HIPAA and GLP Both the HIPPA and ACA are one of the most driving forces in the healthcare industry because they force insurance companies to completely define their strategic mission. HIPPA, is the health reform act that mandates and administers the standards for Electronic Data interchange transactions. The Health Insurance Portability and Accountability Act (HIPAA) resulted from a bill sponsored by Senators Nancy Kassebaum and Edward Kennedy, who acknowledge the integrity of customer data. This act dramatically impacts the healthcare industry as it forces them to increase the task force of Internal auditing that is also associated with the Sarbanes-Oxley Guide.

HIPAA was signed into law in 1996. Electronic transactions have also been under the scope of this act due to the fact that information systems have been dramatically evolving, which poses a risk for the avenues of how information is transmitted. Since HIPAA puts strict regulations in patient information, blue cross blue shield was force to renovate its strategy. Due to HIPAA and ACA, blue cross blue shield was forced to think of new strategies. For example, it used the benchmark principle to tell the hospitals to reduce its cost by 10%, which was indirect method.

A more direct approach would be to tell the hospital to directly cut the staff. In this particular scenario, blue cross blue shield gave full control to the hospital to reduce its cost which could mean eliminating paper waste, cutting salaries, reducing leisure activities. Both HIPAA and ACA influence insurance and hospitals to securely dispose medical information of patients. A challenge for any healthcare provider and its subsidiaries is the fact that fraud has become a serious issue in this era.

In order to combat fraud, Congress enacted HIPPA and the ACA have implemented some procedures to combat fraud. The HIPAA and ACA are both critical legislations that ensure patient privacy. This is a key element to prevent fraud in most cases. Individuals seeking information must submit their PHI or SHI in order to prevent other individuals from claiming insurance compensation on behalf of others. Similarly to the HIPAA, the Gramm-Leach-Bliley Financial Modernization Act is designed to facilitate and provide integrity to consumers against financial institutions that offer products.

Undoubtedly, protecting the privacy of consumer information is critical towards harnessing the growth of business and protecting the integrity of information that is transferred. Thus, the GLB act not only covers federal banking agency and the SEC, but protects consumers who are trying to protect their mortgage as well. One cannot refute that protecting consumer information in highly critical because it protects the consumers’ information from going to a third company and mitigates the risk of companies from exploiting the given information.

Under this act, companies are constrained on how anyone that receives nonpublic personal information from a financial institution can utilize the information. It is hard to understand and inform individuals about this act since it is strictly focused towards institutions that are financially engaged. Therefore, the law is strictly limited to individuals and not businesses or corporations. One of the critical institutions that is the focal point in this scope are the insurance companies. Conducive research indicates that four billion healthcare claims are submitted annually.

Even though a small portion of is submitted through fraud, the estimated loss in these fraudulent activities can result up to a hefty $56.7 in losses. This can be detrimental as Medicare will be a huge issue around 2033. Overall, the GLP and the HIPAA are critical towards shaping a better environment not only in the healthcare world but also in the commerce environment. It enables healthcare practices to gain a better understanding of compliance laws and implement a strict auditing plan to mitigate the risks.

The HIPAA will continue to evolve as the 2014 arises and the president elections heat up. It will be interesting to see how healthcare companies respond to these evolving legislations and modify their revenue models based on these statutory laws.Works Cited1993 Medicare part B provider handbook for Illinois: coverage, billing, reimbursement.. Marion, Ill.: Blue Cross and Blue Shield of Illinois, 1993. Print."What is HIPAA." What is HIPAA. N.p., n.d. Web. 18 Aug. 2011. . Gramm-Leach-Bliley Act | BCP Business Center. (n.d.). BCP Business Center.

Retrieved October 20, 2011, from http://business.ftc.gov/privacy-and-security/gramm-leach-bliley-act