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

The term "covered entity" under HIPAA (Health Insurance Portability and Accountability Act) specifically refers to healthcare providers, health plans, and healthcare clearinghouses that transmit any health information in electronic form in connection with a HIPAA transaction. This designation is critical because it establishes who is subject to HIPAA regulations and, therefore, responsible for protecting the privacy and security of individuals' protected health information (PHI).

Covered entities are bound by specific compliance requirements, ensuring that they handle PHI with a high level of security and confidentiality. They must implement policies and procedures to safeguard this information, train employees on privacy standards, and provide patients with certain rights regarding their health information. Understanding the role of covered entities is essential for anyone involved in healthcare administration or information management, as it directly impacts how health information is processed, shared, and protected within the healthcare system.