What does the term "covered entity" refer to in HIPAA?

The term "covered entity" in HIPAA refers specifically to organizations that play a crucial role in handling protected health information (PHI). This includes health care providers who transmit any health information in connection with a HIPAA transaction, health plans that provide health insurance, and health care clearinghouses that process health information.

By defining covered entities in this way, HIPAA aims to establish clear regulations for the protection and confidentiality of individuals' health information. These entities are required to adhere to HIPAA regulations, which are designed to ensure the privacy and security of PHI as it is handled and transmitted electronically.

In contrast, insurance companies that only handle customer claims, healthcare organizations that operate without electronic data systems, and individuals receiving healthcare services do not meet the regulatory criteria for being classified as covered entities under HIPAA. The definition focuses on those that engage in the electronic transmission of health information, which enhances the regulation of data protection in modern healthcare practices.