Outsourcing Medical Coding and HIPAA: What to Know

By Devin Partida, Editor-in-Chief, ReHack.com
Twitter: @rehackmagazine

The medical industry consists of many steps to provide patients with the best care possible. Within this process, payments and coding present a unique challenge. Health care professionals often outsource medical coding to third-party professionals. Doing so, however, requires strict compliance with HIPAA regulations.

Outsourcing involves transferring sensitive information outside of the primary institution. This process can be risky, especially when the sensitive data involves health and financial information.

HIPAA regulations hold specific parties accountable for any breaches or violations of patient rights during and after treatment. Compliance with these regulations is key for outsourcing coding information.

A secure system results in fewer security concerns and better overall care for patients in every sector of the industry.

HIPAA on Data Protection

With new technology, like telehealth, becoming a norm in the United States, data has become abundant in the medical field. As hospital staff process it all, they may need third-party assistance. Outsourcing comes with a variety of benefits, from quality and compliance to transparency and cost-savings. However, you can only obtain these benefits after complying with HIPAA.

Specifically, Title II of HIPAA focuses on security and privacy protections for patients and their health data. It establishes standards and protocols that health care facilities must follow, which is especially important when working with third-party companies.

A third-party connection for outsourcing must first and foremost include a clear contract. This contract will explain how the coding organization can use the data and how they should protect it. It provides clarity and will help hold the proper parties accountable in instances of a breach or fraud.

Per HIPAA regulations, individual parties can be held responsible if there’s a violation or breach. For instance, without the right security protocols in place, a cybercriminal can infiltrate the network on which the health care facility works with the coding organization. Staff must immediately report the breach and, if either facility cannot fix the damage, the contract may be terminated. Fines and charges may follow depending on the extent and severity of the criminal activity.

COVID-19 Relevance

Outsourcing medical coding information may be particularly important in 2021 due to the COVID-19 pandemic. As vaccine distribution began at the end of 2020, health care fraud spiked. Application attacks increased by 51% as vaccines became available.

As millions of people in the U.S. still need the vaccine, it will be increasingly important for health care facilities to monitor how they outsource these substantial volumes of data.

Actionable Steps

To properly comply with HIPAA and prevent criminal activity while outsourcing medical coding, you can take some proactive steps. You’ll want to:

  • Conduct frequent risk assessments. These diagnostic tests show where the medical facility is vulnerable.
  • Improve security setup. After you see what areas need improvement, you can add encryption during the outsourcing process. You can also automate security systems to provide constant monitoring for criminal activity.
  • Create breach notification policies. These policies are a legal obligation, where you take the proper steps to understand the extent of a breach and notify all parties affected.

If a breach or instance of fraud does occur, you can take the following steps:

  • Determine the type and scale of the attack. Find out how much coding data has been affected.
  • Improve the area in which the breach occurred. For instance, if a phishing scam compromised data, then you know to implement better filters on communication platforms.
  • Train staff continually. With more knowledge and awareness, all parties can better comply with HIPAA regulations.

With these steps in place, outsourcing becomes less of a risk, and health care facilities can provide ideal care and protection for all patients.

Outsourcing in a Safe Way

HIPAA guidelines help keep patient information safe and hold responsible parties accountable in instances of violations. With outsourcing, working with a third-party provider can be risky. However, with the right steps, protocols, and compliance, all facilities can adhere to HIPAA regulations no matter the circumstances.