[Federal Register: August 12, 1998 (Volume 63, Number 155)]
[Proposed Rules]
[Page 43241-43280]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12au98-28]

[[Page 43241]]

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Part III

Department of Health and Human Services

_______________________________________________________________________

Office of the Secretary

_______________________________________________________________________

45 CFR Part 142

Security and Electronic Signature Standards; Proposed Rule

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

45 CFR Part 142

[HCFA-0049-P]
RIN 0938-AI57


Security and Electronic Signature Standards

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This rule proposes standards for the security of individual
health information and electronic signature use by health plans, health
care clearinghouses, and health care providers. The health plans,
health care clearinghouses, and health care providers would use the
security standards to develop and maintain the security of all
electronic individual health information. The electronic signature
standard is applicable only with respect to use with the specific
transactions defined in the Health Insurance Portability and
Accountability Act of 1996, and when it has been determined that an
electronic signature must be used.
    The use of these standards would improve the Medicare and Medicaid
programs, and other Federal health programs and private health
programs, and the effectiveness and efficiency of the health care
industry in general. This rule would implement some of the requirements
of the Administrative Simplification subtitle of the Health Insurance
Portability and Accountability Act of 1996.

DATES: Comments will be considered if we receive them at the
appropriate address, as provided below, no later than 5 p.m. on October
13, 1998.

ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: HCFA-0049-P, P.O. Box 26585,
Baltimore, MD 21207-0519.
    If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    Comments may also be submitted electronically to the following e-
mail address: security@osaspe.dhhs.gov. For e-mail comment procedures,
see the beginning of SUPPLEMENTARY INFORMATION. For further information
on ordering copies of the Federal Register containing this document and
on electronic access, see the beginning of
SUPPLEMENTARY information.

FOR FURTHER INFORMATION CONTACT: John Parmigiani, (410) 786-2976.

SUPPLEMENTARY INFORMATION:

E-Mail, Comments, Procedures, Availability of Copies, and Electronic
Access

    E-mail comments should include the full name, postal address, and
affiliation (if applicable) of the sender and must be submitted to the
referenced address to be considered. All comments should be
incorporated in the e-mail message because we may not be able to access
attachments.
    Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code HCFA-0049-P and the specific section or sections of the
proposed rule. Both electronic and written comments received by the
time and date indicated above will be available for public inspection
as they are received, generally beginning approximately 3 weeks after
publication of a document, in Room 309-G of the Department's offices at
200 Independence Avenue, SW., Washington, DC, on Monday through Friday
of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7890).
Electronic and legible written comments will also be posted, along with
this proposed rule, at the following web site:
<http://aspe.hhs.gov/admnsimp/>.
    Copies: To order copies of the Federal Register containing this
document, send your request to: New Orders, Superintendent of
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date
of the issue requested and enclose a check or money order payable to
the Superintendent of Documents, or enclose your Visa or Master Card
number and expiration date. Credit card orders can also be placed by
calling the order desk at (202) 512-1800 or by faxing to (202) 512-
2250. The cost for each copy is $8. As an alternative, you can view and
photocopy the Federal Register document at most libraries designated as
Federal Depository Libraries and at many other public and academic
libraries throughout the country that receive the Federal Register.
    This Federal Register document is also available from the Federal
Register online database through GPO Access, a service of the U.S.
Government Printing Office. Free public access is available on a Wide
Area Information Server (WAIS) through the Internet and via
asynchronous dial-in. Internet users can access the database by using
the World Wide Web, http://www.access.gpo.gov/nara/, by using local
WAIS client software, or by telnet to swais.access.gpo.gov, then login
as guest (no password required). Dial-in users should use
communications software and modem to call (202) 512-1661; type swais,
then login as guest (no password required).

I. Background

[Please label written or e-mailed comments about this section with
the subject: Background]

    In order to administer their programs, the Department of Health and
Human Services, other Federal agencies, State Medicaid agencies,
private health plans, health care providers, and health care
clearinghouses must assure their customers (such as patients, insured,
providers, and health care plans) that the confidentiality and privacy
of health care information they electronically collect, maintain, use,
or transmit is secure. Security of health information is especially
important when health information can be directly linked to an
individual.
    Confidentiality is threatened not only by the risk of improper
access to electronically stored information, but also by the risk of
interception during electronic transmission of the information.
    In addition to the need to ensure electronic health care
information is secure and confidential, there is a potential need to
associate signature capability with information being electronically
stored or transmitted. Today, there are numerous forms of electronic
signatures, ranging from biometric devices to digital signature. To
satisfy the legal and time-tested characteristics of a written
signature, however, an electronic signature must do the following:
    <bullet> Identify the signatory individual,
    <bullet> Assure the integrity of a document's content, and
    <bullet> Provide for nonrepudiation; that is, strong and
substantial evidence that will make it difficult for the signer to
claim that the electronic representation is not valid. Currently, the
only technically mature electronic signature meeting the above criteria
is the digital signature. There is no national standard for security or
electronic signatures. Of necessity, each health care provider, health
care plan, and health care entity

[[Page 43243]]

has defined its own security requirements.

A. Legislation

    The Congress included provisions to address the need for security
and electronic signature standards and other administrative
simplification issues in the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), Public Law 104-191, which was
enacted on August 21, 1996. Through subtitle F of title II of that law,
the Congress added to title XI of the Social Security Act a new part C,
entitled ``Administrative Simplification.'' (Public Law 104-191 affects
several titles in the United States Code. Hereafter, we refer to the
Social Security Act as the Act; we refer to the other laws cited in
this document by their names.) The purpose of this part C is to improve
the Medicare and Medicaid programs, in particular, and the efficiency
and effectiveness of the health care system, in general, by encouraging
the development of a health information system through the
establishment of standards and requirements to facilitate the
electronic maintenance and transmission of certain health information.
    Part C of title XI of the Act consists of sections 1171 through
1179. These sections define various terms and impose several
requirements on HHS, health plans, health care clearinghouses, and
certain health care providers concerning electronic transmission of
health information.
    The first section, section 1171 of the Act, establishes definitions
for purposes of part C of title XI for the following terms: code set,
health care clearinghouse, health care provider, health information,
health plan, individually identifiable health information, standard,
and standard setting organization.
    Section 1172 of the Act makes any standard adopted under part C
applicable to: (1) Health plans, (2) health care clearinghouses, and
(3) health care providers that transmit any health information in
electronic form in connection with the transactions referred to in
section 1173(a)(1) of the Act. The security standard to be adopted
under Part C is not restricted to the transactions referred to in
section 1173(a)(1) of the Act, but is applicable to any health
information pertaining to an individual that is electronically
maintained or transmitted. This section also contains the following
requirements concerning standard setting:
    <bullet> The Secretary may adopt a standard developed, adopted, or
modified by a standard setting organization (that is, an organization
accredited by the American National Standards Institute (ANSI)) that
has consulted with the National Uniform Billing Committee (NUBC), the
National Uniform Claim Committee (NUCC), Workgroup for Electronic Data
Interchange (WEDI), and the American Dental Association (ADA).
    <bullet> The Secretary may also adopt a standard other than one
established by a standard setting organization, if the different
standard will reduce costs for health care providers and health plans,
the different standard is promulgated through negotiated rulemaking
procedures, and the Secretary consults with each of the above-named
groups.
    <bullet> If no standard has been adopted by any standard setting
organization, the Secretary must rely on the recommendations of the
National Committee on Vital and Health Statistics (NCVHS) and consult
with each of the above-named groups.
    In complying with the requirements of part C of title XI, the
Secretary must rely on the recommendations of the NCVHS, consult with
appropriate State, Federal, and private agencies or organizations, and
publish the NCVHS recommendations in the Federal Register.
    Paragraph (a) of section 1173 of the Act requires that the
Secretary adopt standards for financial and administrative
transactions, and data elements for those transactions, to enable
health information to be exchanged electronically. Standards are
required for the following transactions: health claims, health
encounter information, health claims attachments, health plan
enrollments and disenrollments, health plan eligibility, health care
payment and remittance advice, health plan premium payments, first
report of injury, health claim status, and referral certification and
authorization. In addition, the Secretary is required to adopt
standards for any other financial and administrative transactions that
are determined to be appropriate by the Secretary.
    Paragraph (b) of section 1173 of the Act requires the Secretary to
adopt standards for unique health identifiers for all individuals,
employers, health plans, and health care providers and requires further
that the adopted standards specify for what purposes unique health
identifiers may be used.
    Paragraphs (c) through (f) of section 1173 of the Act require the
Secretary to establish standards for code sets for each data element
for each health care transaction listed above, security standards for
health care information systems, standards for electronic signatures
(established together with the Secretary of Commerce), and standards
for the transmission of data elements needed for the coordination of
benefits and sequential processing of claims. Compliance with
electronic signature standards will be deemed to satisfy both State and
Federal requirements for written signatures with respect to the
transactions listed in paragraph (a) of section 1173 of the Act.
    In section 1174 of the Act, the Secretary is required to establish
standards for all of the above transactions, except claims attachments,
by February 21, 1998. The standards for claims attachments must be
established by February 21, 1999. Generally, after a standard is
established, it cannot be changed during the first year after adoption
except for changes that are necessary to permit compliance with the
standard. Modifications to any of these standards may be made after the
first year, but not more frequently than once every 12 months. The
Secretary must also ensure that procedures exist for the routine
maintenance, testing, enhancement, and expansion of code sets and that
there are crosswalks from prior versions.
    Section 1175 of the Act prohibits health plans from refusing to
process or delaying the processing of a transaction that is presented
in standard format. The Act's requirements are not limited to health
plans; however, each person to whom a standard or implementation
specification applies is required to comply with the standard within 24
months (or 36 months for small health plans) of its adoption. A health
plan or other entity may, of course, comply voluntarily before the
effective date. A person may comply by using a health care
clearinghouse to transmit or receive the standard transactions.
Compliance with modifications to standards or implementation
specifications must be accomplished by a date designated by the
Secretary. This date may not be earlier than 180 days from the notice
of change.
    Section 1176 of the Act establishes a civil monetary penalty for
violation of the provisions in part C of title XI of the Act, subject
to several limitations. Penalties may not be more than $100 per person
per violation and not more than $25,000 per person for violations of a
single standard for a calendar year. The procedural provisions in
section 1128A of the Act, ``Civil Monetary Penalties,'' are applicable.
    Section 1177 of the Act establishes penalties for a knowing misuse
of unique health identifiers and individually identifiable health
information: (1) A fine of not more than $50,000 and/or imprisonment of
not

[[Page 43244]]

more than 1 year; (2) if misuse is ``under false pretenses,'' a fine of
not more than $100,000 and/or imprisonment of not more than 5 years;
and (3) if misuse is with intent to sell, transfer, or use individually
identifiable health information for commercial advantage, personal
gain, or malicious harm, a fine of not more than $250,000 and/or
imprisonment of not more than 10 years. Note that these penalties do
not affect any other penalties which may be imposed by other Federal
programs, including ERISA.
    Under section 1178 of the Act, the provisions of part C of title XI
of the Act, as well as any standards established under them, supersede
any State law that is contrary to them. However, the Secretary may, for
statutorily-specified reasons, waive this provision.
    Finally, section 1179 of the Act makes the above provisions
inapplicable to financial institutions or anyone acting on behalf of a
financial institution when ``authorizing, processing, clearing,
settling, billing, transferring, reconciling, or collecting payments
for a financial institution.''

    (Concerning this last provision, the conference report, in its
discussion on section 1178, states:
    ``The conferees do not intend to exclude the activities of
financial institutions or their contractors from compliance with the
standards adopted under this part if such activities would be
subject to this part. However, conferees intend that this part does
not apply to use or disclosure of information when an individual
utilizes a payment system to make a payment for, or related to,
health plan premiums or health care. For example, the exchange of
information between participants in a credit card system in
connection with processing a credit card payment for health care
would not be covered by this part. Similarly sending a checking
account statement to an account holder who uses a credit or debit
card to pay for health care services, would not be covered by this
part. However, this part does apply if a company clears health care
claims, the health care claims activities remain subject to the
requirements of this part.'') (H.R. Rep. No. 736, 104th Cong., 2nd
Sess. 268-269 (1996))

B. Process for Developing National Standards

    The Secretary has formulated a five-part strategy for developing
and implementing the standards mandated under part C of title XI of the
Act:
    1. To ensure necessary interagency coordination and required
interaction with other Federal departments and the private sector,
establish interdepartmental implementation teams to identify and assess
potential standards for adoption. The subject matter of the teams
includes claims/encounters, identifiers, enrollment/eligibility,
systems security and electronic signature, and medical coding
classification. Another team addresses cross-cutting issues and
coordinates the subject matter teams. The teams consult with external
groups such as the NCVHS' Workgroup on Data Standards, WEDI, the ANSI's
Healthcare Informatics Standards Board (HISB), the NUCC, the NUBC, and
the ADA. The teams are charged with developing regulations and other
necessary documents and making recommendations for the various
standards to the HHS Data Council through its Committee on Health Data
Standards. (The HHS Data Council is the focal point for consideration
of data policy issues. It reports directly to the Secretary and advises
the Secretary on data standards and privacy issues.)
    2. Develop recommendations for standards to be adopted.
    3. Publish proposed rules in the Federal Register describing the
standards. Each proposed rule provides the public with a 60-day comment
period.
    4. Analyze public comments and publish the final rules in the
Federal Register.
    5. Distribute standards and coordinate preparation and distribution
of implementation guides.
    This strategy affords many opportunities for involvement of
interested and affected parties in standards development and adoption
by enabling them to:
    <bullet> Participate with standards setting organizations.
    <bullet> Provide written input to the NCVHS.
    <bullet> Provide written input to the Secretary of HHS.
    <bullet> Provide testimony at NCVHS'' public meetings.
    <bullet> Comment on the proposed rules for each of the proposed
standards.
    <bullet> Invite HHS staff to meetings with public and private
sector organizations or meet directly with senior HHS staff involved in
the implementation process.
    The implementation teams charged with reviewing standards for
designation as required national standards under the statute have
defined, with significant input from the health care industry, a set of
principles for guiding choices for the standards to be adopted by the
Secretary. These principles are based on direct specifications in
HIPAA, the purpose of the law, and generally desirable principles. To
be designated as an HIPAA standard, each standard should:
    1. Improve the efficiency and effectiveness of the health care
system by leading to cost reductions for or improvements in benefits
from electronic health care transactions.
    2. Meet the needs of the health data standards user community,
particularly health care providers, health plans, and health care
clearinghouses.
    3. Be consistent and uniform with the other HIPAA standards--their
data element definitions and codes and their privacy and security
requirements--and, secondarily, with other private and public sector
health data standards.
    4. Have low additional development and implementation costs
relative to the benefits of using the standard.
    5. Be supported by an ANSI-accredited standards developing
organization or other private or public organization that will ensure
continuity and efficient updating of the standard over time.
    6. Have timely development, testing, implementation, and updating
procedures to achieve administrative simplification benefits faster.
    7. Be technologically independent of the computer platforms and
transmission protocols used in electronic health transactions, except
when they are explicitly part of the standard.
    8. Be precise and unambiguous, but as simple as possible.
    9. Keep data collection and paperwork burdens on users as low as is
feasible.
    10. Incorporate flexibility to adapt more easily to changes in the
health care infrastructure (such as new services, organizations, and
provider types) and information technology.
    A master data dictionary providing for common data definitions
across the standards selected for implementation under HIPAA will be
developed and maintained. We intend for the data element definitions to
be precise, unambiguous, and consistently applied. The transaction-
specific reports and general reports from the master data dictionary
will be readily available to the public. At a minimum, the information
presented will include data element names, definitions, and appropriate
references to the transactions where they are used.
    This proposed rule would establish the security standard and
electronic signature standard for health care information and
individually identifiable health care information maintained or
transmitted electronically. The remaining standards are grouped, to the
extent possible, by subject matter and audience in other regulations.
We anticipate publishing

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several separate regulation documents to promulgate the remaining
standards required under HIPAA.

II. Provisions of this Proposed Rule

[Please label written comments or e-mailed comments about this
section with the subject: Introduction/Applicability]

    We propose to add a new part to title 45 of the Code of Federal
Regulations for health plans, health care providers, and health care
clearinghouses in general. The new part would be part 142 of title 45
and would be titled ``Administrative Requirements.'' Subpart A would
contain the general provisions for this part, including the general
definitions and general requirements for health plans. Subpart C would
contain provisions specific to securing health information used in any
electronic transmission or stored format.
    In this proposed rule, we propose a standard for security of health
information. This rule would establish that health plans, health care
clearinghouses, and health care providers must have the security
standard in place to comply with the statutory requirement that health
care information and individually identifiable health care information
be protected to ensure privacy and confidentiality when health
information is electronically stored, maintained, or transmitted. The
Congress mandated a separate standard for electronic signature,
therefore, this proposed security standard also addresses the selected
standard for electronic signature. The proposed security standard does
not require the use of an electronic signature, but specifies the
standard for an electronic signature that must be followed if such a
signature is used. If an entity elects to use an electronic signature,
it must comply with the electronic signature standard.

A. Applicability

    With the exception of the security provisions, section 262 of HIPAA
applies to any health plan, any health care clearinghouse, and any
health care provider that transmits any health information in
electronic form in connection with transactions referred to in section
1173(a)(1) of the Act. The security provisions of section 262 of HIPAA
apply to any health plan, any health care clearinghouse, and any health
care provider that electronically maintains or transmits any health
information relating to an individual.
    Our proposed rules (at 45 CFR 142.102) would apply to the health
plans and health care clearinghouses as well, but we would clarify the
statutory language in our regulations for health care providers. With
the exception of the security regulation, we would have the regulations
apply to any health care provider only when electronically transmitting
any of the transactions to which section 1173(a)(1) of the Act refers.
    Electronic transmissions would include transactions using all
media, even when the information is physically moved from one location
to another using magnetic tape, disk, or compact disc (cd) media.
Transmissions over the Internet (wide-open), Extranet (using Internet
technology to link a business with information only accessible to
collaborating parties), leased lines, dial-up lines, and private
networks are all included. Telephone voice response and ``faxback'' (a
request for information made via voice using a fax machine and
requested information returned via that same machine as a fax) systems
would not be included. We solicit comments concerning any adverse
impact the above statement concerning voice response or faxback may
have upon the security of the health information in the commenter's
care.
    With the exception of the security regulation, our regulations
would apply to health care clearinghouses when transmitting
transactions to, and receiving transactions from, a health care
provider or health plan that transmits and receives standard
transactions (as defined under ``transaction'') and at all times when
transmitting to or receiving electronic transactions from another
health care clearinghouse. The security regulation would apply to
health care clearing houses electronically maintaining or transmitting
any health information pertaining to an individual.
    Entities that offer on-line interactive transmission must comply
with the standards. The Hypertext Markup Language (HTML) interaction
between a server and a browser by which the data elements of a
transaction are solicited from a user would not have to use the
standards (with the exception of the security standard), although the
data content must be equal to that required for the standard. Once the
data elements are assembled into a transaction by the server, the
transmitted transaction would have to comply with the standards.
    With the exception of the security portion, the law would apply to
each health care provider when transmitting or receiving any of the
specified electronic transactions. The security regulation would apply
to each health care provider electronically maintaining or transmitting
any health information pertaining to an individual.
    The law applies to health plans for all transactions. Section
142.104 would contain the following provisions (from section 1175 of
the Act):
    If a person desires to conduct a transaction (as defined in
Sec. 142.103) with a health plan as a standard transaction, the
following apply:
    (1) The health plan may not refuse to conduct the transaction as a
standard transaction.
    (2) The health plan may not delay the transaction or otherwise
adversely affect, or attempt to adversely affect, the person or the
transaction on the basis that the transaction is a standard
transaction.
    (3) The information transmitted and received in connection with the
transaction must be in the form of standard data elements of health
information.
    As a further requirement, we would provide that a health plan that
conducts transactions through an agent assure that the agent meets all
the requirements of part 142 that apply to the health plan.
    Section 142.105 would state that a person or other entity may meet
the transaction requirements of Sec. 142.104 by either--
    (1) Transmitting and receiving standard data elements, or
    (2) Submitting nonstandard data elements to a health care
clearinghouse for processing into standard data elements and
transmission by the health care clearinghouse and receiving standard
data elements through the clearinghouse.
    Health care clearinghouses would be able to accept nonstandard
transactions for the sole purpose of translating them into standard
transactions for sending customers and would be able to accept standard
transactions and translate them into nonstandard formats for receiving
customers. We would state in Sec. 142.105 that the transmission of
nonstandard transactions, under contract, between a health plan or a
health care provider and a health care clearinghouse would not violate
the law.
    With the exception of the security standard, transmissions within a
corporate entity would not be required to comply with the standards. A
hospital that is wholly owned by a managed care company would not have
to use the transaction standards to pass encounter information back to
the home office, but it would have to use the standard claims
transaction to submit a claim to another payer. Another example might
be transactions within Federal agencies and their contractors and
between State agencies within the same State. For example, Medicare
enters into contracts with insurance

[[Page 43246]]

companies and common working file sites that process Medicare claims
using government furnished software. There is constant communication,
on a private network, between HCFA Central Office and the Medicare
carriers, intermediaries, and common working file sites. This
communication may continue in nonstandard mode. However, these
contractors would be required to comply with the transaction standards
when exchanging any of the transactions covered by HIPAA with an entity
outside these ``corporate'' boundaries.
    The security standard is applicable to all health care information
electronically maintained or used in an electronic transmission,
regardless of format (standard transaction or a proprietary format); no
distinction is made between internal corporate entity communication or
communication external to the corporate entity.
    Although there are situations in which the use of the standards is
not required (for example, health care providers may continue to submit
paper claims and employers are not required to use any of the standard
transactions), we stress that a standard may be used voluntarily in any
situation in which it is not required.
    This proposed regulation would not mandate the use of electronic
signatures with any specific transaction at this time. Instead, the
regulation proposes that whenever an electronic signature is required
for an electronic transaction by law, regulation, or contract, the
signature must meet the standard established in the regulation at
Sec. 142.310. Use of this standard would satisfy any Federal or State
requirement for a signature, either electronic or on paper.
    We note that the ANSI X12N standards for individual transactions
which have been proposed for adoption as national standards in a
separate proposed rule do not require the use of electronic signatures.
Standards for additional transactions that the Secretary may propose
for adoption in the future, including one for claims attachments, may
contain such requirements. We solicit comments on whether electronic
signatures should be required for any specific transactions or under
specific circumstances and what effect such requirements would have on
electronic health care transactions.
    We also note that the NCVHS is required by HIPAA to report to the
Secretary recommendations and legislative proposals for uniform data
standards for patient medical record information and the electronic
exchange of such information, with the implication that HHS should rely
on such recommendations to adopt such standards or propose the passage
of such legislation by the Congress. We solicit comments on whether the
standard proposed below for electronic signatures would be appropriate
for consideration as part of such standards.

B. Definitions

[Please label written or e-mailed comments about this section with
the subject: Definitions]

    Section 1171 of the Act defines several terms and our proposed
rules would, for the most part, simply restate the law. The terms that
we are defining in this proposed rule follow:
1. Code Set
    We would define ``code set'' as section 1171(1) of the Act does:
``code set'' means any set of codes used for encoding data elements,
such as tables of terms, medical concepts, medical diagnostic codes, or
medical procedure codes.
2. Health Care Clearinghouse
    We would define ``health care clearinghouse'' as section 1171(2) of
the Act does, but we are adding a further, clarifying sentence. The
statute defines a ``health care clearinghouse'' as a public or private
entity that processes or facilitates the processing of nonstandard data
elements of health information into standard data elements. We would
further explain that such an entity is one that currently receives
health care transactions from health care providers or other entities,
translates the data from a given format into one acceptable to the
intended recipient and forwards the processed transaction to
appropriate payers and clearinghouses, as necessary, for further
action.
    There are currently a number of private clearinghouses that perform
this function for health care providers. For purposes of this rule, we
would consider billing services, repricing companies, community health
management information systems or community health information systems,
value-added networks, and switches that perform this function to be
health care clearinghouses.
3. Health Care Provider
    As defined by section 1171(3) of the Act, a ``health care
provider'' is a provider of services as defined in section 1861(u) of
the Act, a provider of medical or other health services as defined in
section 1861(s) of the Act, and any other person who furnishes health
care services or supplies. Our regulations would define ``health care
provider'' as the statute does and clarify that the definition of a
health care provider is limited to those entities that furnish, or bill
and are paid for, health care services in the normal course of
business.
    For a more detailed discussion of the definition of health care
provider, we refer the reader to our proposed rule, HCFA-0045-P,
Standard Health Care Provider, 63 FR 25320, published May 7, 1998.
4. Health Information
    ``Health information,'' as defined in section 1171 of the Act,
means any information, whether oral or recorded in any form or medium,
that--
    <bullet> Is created or received by a health care provider, health
plan, public health authority, employer, life insurer, school or
university, or health care clearinghouse; and
    <bullet> Relates to the past, present, or future physical or mental
health or condition of an individual; the provision of health care to
an individual; or the past, present, or future payment for the
provision of health care to an individual.
    We propose the same definition for our regulations.
5. Health Plan
    We propose that a ``health plan'' be defined essentially as section
1171 of the Act defines it. Section 1171 of the Act cross refers to
definitions in section 2791 of the Public Health Service Act (as added
by Public Law 104-191, 42 U.S.C. 300gg-91); we would incorporate those
definitions as currently stated into our proposed definitions for the
convenience of the public. We note that the term ``health plan'' is
also defined in other statutes, such as the Employee Retirement Income
Security Act of 1974 (ERISA). Our definitions are based on the roles of
plans in conducting administrative transactions, and any differences
should not be construed to affect other statutes.
    For purposes of implementing the provisions of administrative
simplification, a ``health plan'' would be an individual or group
health plan that provides, or pays the cost of, medical care. This
definition includes, but is not limited to, the 13 types of plans
listed in the statute. On the other hand, plans such as property and
casualty insurance plans and workers compensation plans, which may pay
health care costs in the course of administering nonhealth care
benefits, are not considered to be health plans in the proposed
definition of health plan. Of course, these plans may voluntarily adopt
these standards for their own business needs. At some

[[Page 43247]]

future time, the Congress may choose to expressly include some or all
of these plans in the list of health plans that must comply with the
standards.
    Health plans often carry out their business functions through
agents, such as plan administrators (including third party
administrators), entities that are under ``administrative services
only'' (ASO) contracts, claims processors, and fiscal agents. These
agents may or may not be health plans in their own right; for example,
a health plan acting as another health plan's agent as another line of
business. As stated earlier, a health plan that conducts HIPAA
transactions through an agent is required to assure that the agent
meets all HIPAA requirements that apply to the plan itself.
    ``Health plan'' includes the following, singly or in combination:
    a. ``Group health plan'' (as currently defined by section 2791(a)
of the Public Health Service Act). A group health plan is a plan that
has 50 or more participants (as the term ``participant'' is currently
defined by section 3(7) of ERISA) or is administered by an entity other
than the employer that established and maintains the plan. This
definition includes both insured and self-insured plans. We define
``participant'' separately below.
    Section 2791(a)(1) of the Public Health Service Act defines ``group
health plan'' as an employee welfare benefit plan (as defined in
current section 3(1) of ERISA) to the extent that the plan provides
medical care, including items and services paid for as medical care, to
employees or their dependents directly or through insurance, or
otherwise.
    b. ``Health insurance issuer'' (as currently defined by section
2791(b) of the Public Health Service Act).
    Section 2791(b) of the Public Health Service Act currently defines
a ``health insurance issuer'' as an insurance company, insurance
service, or insurance organization that is licensed to engage in the
business of insurance in a State and is subject to State law that
regulates insurance.
    c. ``Health maintenance organization'' (as currently defined by
section 2791(b) of the Public Health Service Act).
    Section 2791(b) of the Public Health Service Act currently defines
a ``health maintenance organization'' as a Federally qualified health
maintenance organization, an organization recognized as such under
State law, or a similar organization regulated for solvency under State
law in the same manner and to the same extent as such a health
maintenance organization. These organizations may include preferred
provider organizations, provider sponsored organizations, independent
practice associations, competitive medical plans, exclusive provider
organizations, and foundations for medical care.
    d. Part A or Part B of the Medicare program (title XVIII of the
Act).
    e. The Medicaid program (title XIX of the Act).
    f. A ``Medicare supplemental policy'' as defined under section
1882(g)(1) of the Act.
    Section 1882(g)(1) of the Act defines a ``Medicare supplemental
policy'' as a health insurance policy that a private entity offers a
Medicare beneficiary to provide payment for expenses incurred for
services and items that are not reimbursed by Medicare because of
deductible, coinsurance, or other limitations under Medicare. The
statutory definition of a Medicare supplemental policy excludes a
number of plans that are generally considered to be Medicare
supplemental plans, such as health plans for employees and former
employees and for members and former members of trade associations and
unions. A number of these health plans may be included under the
definitions of ``group health plan'' or ``health insurance issuer'', as
defined in paragraphs a. and b. above.
    g. A ``long-term care policy,'' including a nursing home fixed-
indemnity policy. A ``long-term care policy'' is considered to be a
health plan regardless of how comprehensive it is. We recognize the
long-term care insurance segment of the industry is largely unautomated
and we welcome comments regarding the impact of HIPAA on the long-term
care segment.
    h. An employee welfare benefit plan or any other arrangement that
is established or maintained for the purpose of offering or providing
health benefits to the employees of two or more employers. This
includes plans that are referred to as multiple employer welfare
arrangements (``MEWAs'').
    i. The health care program for active military personnel under
title 10 of the United States Code.
    j. The veterans health care program under chapter 17 of title 38 of
the United States Code.
    This health plan primarily furnishes medical care through hospitals
and clinics administered by the Department of Veterans Affairs for
veterans with a service-connected disability that is compensable.
Veterans with nonservice-connected disabilities (and no other health
benefit plan) may receive health care under this health plan to the
extent resources and facilities are available.
    k. The Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), as defined in 10 U.S.C. 1072(4).
    CHAMPUS primarily covers services furnished by civilian medical
providers to dependents of active duty members of the uniformed
services and retirees and their dependents under age 65.
    l. The Indian Health Service program under the Indian Health Care
Improvement Act (25 U.S.C. 1601 et seq.).
    This program furnishes services, generally through its own health
care providers, primarily to persons who are eligible to receive
services because they are of American Indian or Alaskan Native descent.
    m. The Federal Employees Health Benefits Program under 5 U.S.C.
chapter 89.
    This program consists of health insurance plans offered to active
and retired Federal employees and their dependents. Depending on the
health plan, the services may be furnished on a fee-for-service basis
or through a health maintenance organization.

    (Note: Although section 1171(5)(M) of the Act refers to the
``Federal Employees Health Benefit Plan,'' this and any other rules
adopting administrative simplification standards will use the
correct name, the Federal Employees Health Benefits Program. One
health plan does not cover all Federal employees; there are over 350
health plans that provide health benefits coverage to Federal
employees, retirees, and their eligible family members. Therefore,
we will use the correct name, the Federal Employees Health Benefits
Program, to make clear that the administrative simplification
standards apply to all health plans that participate in the
Program.)

    n. Any other individual or group health plan, or combination
thereof, that provides or pays for the cost of medical care.
    We would include a fourteenth category of health plan in addition
to those specifically named in HIPAA, as there are health plans that do
not readily fit into the other categories but whose major purpose is
providing health benefits. The Secretary would determine which of these
plans are health plans for purposes of title II of HIPAA. This category
would include the Medicare Plus Choice plans that will become available
as a result of section 1855 of the Act as amended by section 4001 of
the Balanced Budget Act of 1997 (Public Law 105-33) to the extent that
these health plans do not fall under any other category.

[[Page 43248]]

6. Small Health Plan
    We would define a ``small health plan'' as a group health plan with
fewer than 50 participants.
    The HIPAA does not define a ``small health plan'' but instead
leaves the definition to be determined by the Secretary. The Conference
Report suggests that the appropriate definition of a ``small health
plan'' is found in current section 2791(a) of the Public Health Service
Act, which is a group health plan with fewer than 50 participants. We
would also define small individual health plans as those with fewer
than 50 participants.
7. Individually Identifiable Health Information
    Section 1171(6) states the term ``individually identifiable health
information'' means any information, including demographic information
collected from an individual, that--
    a. Is created or received by a health care provider, health plan,
employer, or health care clearinghouse; and
    b. Relates to the past, present or future physical or mental health
or condition of an individual, the provision of health care to an
individual, or the past, present, or future payment for the provision
of health care to an individual, and
    (i) Identifies the individual, or
    (ii) With respect to which there is a reasonable basis to believe
that the information can be used to identify the individual.
8. Standard
    Section 1171 of the Act defines ``standard,'' when used with
reference to a data element of health information or a transaction
referred to in section 1173(a)(1) of the Act, as any such data element
or transaction that meets each of the standards and implementation
specifications adopted or established by the Secretary with respect to
the data element or transaction under sections 1172 through 1174 of the
Act.
    Under our definition, the security standard would be a set of
requirements adopted or established to preserve and maintain the
confidentiality and privacy of electronically stored, maintained, or
transmitted health information promulgated either by an organization
accredited by the ANSI or HHS.
9. Transaction
    ``Transaction'' would mean the exchange of information between two
parties to carry out financial and administrative activities related to
health care. A transaction would be (a) any of the transactions listed
in section 1173(a)(2) of the Act, and (b) any determined appropriate by
the Secretary in accordance with section 1173(a)(1)(B) of the Act. We
present them below in the order in which we propose to list them in the
regulations text.
    A ``transaction'' would mean any of the following:
    a. Health claims or equivalent encounter information. This
transaction may be used to submit health care claim billing
information, encounter information, or both, from health care providers
to payers, either directly or via intermediary billers and claims
clearinghouses.
    b. Health care payment and remittance advice. This transaction may
be used by a health plan to make a payment to a financial institution
for a health care provider (sending payment only), to send an
explanation of benefits remittance advice directly to a health care
provider (sending data only), or to make payment and send an
explanation of benefits remittance advice to a health care provider via
a financial institution (sending both payment and data).
    c. Coordination of benefits. This transaction set can be used to
transmit health care claims and billing payment information between
payers with different payment responsibilities where coordination of
benefits is required or between payers and regulatory agencies to
monitor the furnishing, billing, and/or payment of health care services
within a specific health care/insurance industry segment.
    In addition to the nine electronic transactions specified in
section 1173(a)(2) of the Act, section 1173(f) directs the Secretary to
adopt standards for transferring standard data elements among health
plans for coordination of benefits. This particular provision does not
state that these should be standards for electronic transfer of
standard data elements among health plans. However, we believe that the
Congress, when writing this provision, intended for these standards to
be an electronic form of transactions for coordination of benefits and
sequential processing of claims. The Congress expressed its intent on
these matters generally in section 1173(a)(1)(B) of the Act, where the
Secretary is directed to adopt ``other financial and administrative
transactions * * * consistent with the goals of improving the operation
of the health care system and reducing administrative costs.''
    d. Health claim status. This transaction may be used by health care
providers and recipients of health care products or services (or their
authorized agents) to request the status of a health care claim or
encounter from a health plan.
    e. Enrollment and disenrollment in a health plan. This transaction
may be used to establish communication between the sponsor of a health
benefit and the payer. It provides enrollment data, such as subscriber
and dependents, employer information, and primary care health care
provider information. A sponsor is the backer of the coverage, benefit,
or product. A sponsor can be an employer, union, government agency,
association, or insurance company. The health plan refers to an entity
that pays claims, administers the insurance product or benefit, or
both.
    f. Eligibility for a health plan. This transaction may be used to
inquire about the eligibility, coverage, or benefits associated with a
benefit plan, employer, plan sponsor, subscriber, or a dependent under
the subscriber's policy. It also can be used to communicate information
about or changes to eligibility, coverage, or benefits from information
sources (such as insurers, sponsors, and payers) to information
receivers (such as physicians, hospitals, third party administrators,
and government agencies).
    g. Health plan premium payments. This transaction may be used by,
for example, employers, employees, unions, and associations to make and
keep track of payments of health plan premiums to their health
insurers. This transaction may also be used by a health care provider,
acting as liaison for the beneficiary, to make payment to a health
insurer for coinsurance, copayments, and deductibles.
    h. Referral certification and authorization. This transaction may
be used to transmit health care service referral information between
health care providers, health care providers furnishing services, and
payers. It can also be used to obtain authorization for certain health
care services from a health plan.
    i. First report of injury. This transaction may be used to report
information pertaining to an injury, illness, or incident to entities
interested in the information for statistical, legal, claims, and risk
management processing requirements.
    j. Health claims attachments. This transaction may be used to
transmit health care service information, such as subscriber, patient,
demographic, diagnosis, or treatment data for the purpose of a request
for review, certification, notification, or reporting the outcome of a
health care services review.
    k. Other transactions as the Secretary may prescribe by regulation.

[[Page 43249]]

    Under section 1173(a)(1)(B) of the Act, the Secretary may adopt
standards, and data elements for those standards, and for other
financial and administrative transactions deemed appropriate by the
Secretary. These transactions would be consistent with the goals of
improving the operation of the health care system and reducing
administrative costs.

C. Effective Dates--General

[Please label written comments or e-mailed comments about this
section with the subject: effective dates]

    In general, any given standard would be effective 24 months after
the effective date (36 months for small health plans) of the final rule
for that standard. Because there are other standards to be established
than those in this proposed rule, we specify the date for a given
standard under the subpart for that standard.
    Health plans would be required by part 142 to comply with our
requirements as follows:
    1. Each health plan that is not a small plan would have to comply
with the requirements of part 142 no later than 24 months after the
effective date of the final rule.
    2. Each small health plan would have to comply with the
requirements of part 142 no later than 36 months after the effective
date of the final rule.
    Health care providers and health care clearinghouses would be
required to begin using the standard by 24 months after the effective
date of the final rule.

(The effective date of the final rule will be 60 days after the final
rule is published in the Federal Register.)
    Provisions of trading partner agreements that stipulate data
content, format definitions, or conditions that conflict with the
adopted standard would be invalid beginning 36 months from the
effective date of the final rule for small health plans, and 24 months
from the effective date of the final rule for all other health plans.
    If the HHS adopts a modification to an implementation specification
or a standard, the implementation date of the modification would be no
earlier than the 180th day following the adoption of the modification.
HHS would determine the actual date, taking into account the time
needed to comply due to the nature and extent of the modification. HHS
would be able to extend the time for compliance for small health plans.
This provision would be at Sec. 142.106.
    Any of the health plans, health care clearinghouses, and health
care providers may implement a given standard earlier than the date
specified in the subpart created for that standard. We realize that
this may create some problems temporarily, as early implementers would
have to be able to continue using old standards until the new one must,
by law, be in place.

D. Security Standard

[Please label written comments or e-mailed comments about this
section with the subject: Security Standard--General]

    Section 142.308 would set forth the security standard. There is no
recognized single standard that integrates all the components of
security (administrative procedures, physical safeguards, technical
security services, and technical mechanisms) that must be in place to
preserve health information confidentiality and privacy as defined in
the law. Therefore, we are designating a new, comprehensive standard,
which defines the security requirements to be fulfilled.
    In fact, there are numerous security guidelines and standards in
existence today, focusing on the different techniques available for
implementing the various aspects of security. We thoroughly researched
the existing guidelines and standards, and consulted extensively with
the organizations that developed them. A list of the organizations with
which we consulted can be found in section G. below. As a result of
these consultations and our research, we identified several high-level
concepts on which the standard is based:
    <bullet> The standard must be comprehensive.
    <bullet> Consultation with standards development organizations,
such as ANSI-accredited organizations, as well as business interest
organizations, revealed the need for a standard that addressed all
aspects of security in a concerted fashion. The HISB noted in its
report to the Secretary that:
    ``Comprehensive adoption of security standards in health care, not
piecemeal implementation, is advocated to provide security to data that
is exchanged between health care entities.
    By definition, if a system or communications between two systems,
were implemented with technology(s) meeting standards in a general
system security framework (Identification and Authentication;
Authorization and Access Control; Accountability; Integrity and
Availability; Security of Communication; and Security Administration.)
that system would be essentially secure.
    * * * no single standards development organization (SDO) is
addressing all aspects of health care information security and
confidentiality, and specifically, no single SDO is developing
standards that cover every category of the security framework.'' [Page
189]
    <bullet> The standard must be technology-neutral.
    Our proposed standard does not reference or advocate specific
technology because security technology is changing quickly. We want to
give providers/plans/clearinghouses flexibility to choose their own
technical solutions. A standard that is dependent on a specific
technology or technologies would not be flexible enough to use future
advances.
    <bullet> The standard must be scalable.
    The standard must be able to be implemented by all the affected
entities, from the smallest provider to the largest clearinghouse. A
single approach would be neither economically feasible nor effective in
safeguarding health data. For example, in a small physician practice, a
contingency plan for system emergencies might be only a few pages long,
and cover issues such as where backup diskettes must be stored, and the
location of a backup personal computer (PC). At a large health plan,
the contingency plan might consist of multiple volumes and cover issues
such as remote hot site operations and secure off-site storage of
electronic media. The physician office solution would not protect the
large plan's data, and the plan's solution would not be economically
feasible (or necessary) for the physician office. Moreover, the statute
specifically directed the Secretary to take into account the needs and
capabilities of small and rural health care providers, as those terms
are defined by the Secretary. The scalability of our approach addresses
this direction. We are not proposing specific definitions of ``small''
and ``rural'' health care providers because the statute provides no
exemptions or special benefits for these two groups. However, we
solicit comments on the necessity to define these terms.
General Approach
    We would define the security standard as a set of requirements with
implementation features that providers, plans, and clearinghouses must
include in their operations to assure that electronic health
information pertaining to an individual remains secure. The
implementation features address specific aspects of the requirements.
The standard does not reference or advocate specific technology. This
would allow the security standard to be stable, yet flexible enough to
take advantage of state-of-the-art technology.

[[Page 43250]]

The standard does not address the extent to which a particular entity
should implement the specific features. Instead, we would require that
each affected entity assess its own security needs and risks and
devise, implement, and maintain appropriate security to address its
business requirements. How individual security requirements would be
satisfied and which technology to use would be business decisions that
each organization would have to make.
    The recommendations contained in the National Research Council's
1997 report For The Record: Protecting Electronic Health Information
support our approach to the development of a security standard. This
report presents findings and recommendations related to health data
security, and is widely viewed as an authoritative and comprehensive
source on the subject. The report concludes that appropriate security
practices are highly dependent on individual circumstances, but goes on
to suggest that:

    ``It is therefore not possible to prescribe in detail specific
practices for all organizations; rather, each organization must
analyze its systems, vulnerabilities, risks, and resources to
determine optimal security measures. Nevertheless, the committee
believes that a set of practices can be articulated in a
sufficiently general way that they can be adopted by all health care
organizations in one form or another.'' (Page 168)

    The specific requirements and supporting implementation features
detailed in the next section represent this general set of practices.
Many health care entities have already implemented some or all of these
practices. We believe they represent those practices that are necessary
in order to conduct business electronically in the health care industry
today and, therefore, are normal business costs.
    Inherent in this approach is a balance between the need to secure
health data against risk and the economic cost of doing so. Health care
entities must consider both aspects in devising their security
solutions.
Specific Requirements
    The proposed standard requires that each health care entity engaged
in electronic maintenance or transmission of health information assess
potential risks and vulnerabilities to the individual health data in
its possession in electronic form, and develop, implement, and maintain
appropriate security measures. Most importantly, these measures must be
documented and kept current.
    The proposed security standard consists of the requirements that a
health care entity must address in order to safeguard the integrity,
confidentiality, and availability of its electronic data. It also
describes the implementation features that must be present in order to
satisfy each requirement. The proposed requirements and implementation
features were developed by the implementation team based on knowledge
of security procedures and existing standards and guidelines described
above. This was an iterative process that involved extensive outreach
with a number of health care industry and Department of Commerce
security experts. We also drew upon Recommendations 1 and 3 in the
National Research Council's 1997 report, For The Record, that were
recommended for immediate implementation.
    ``Recommendation 1: All organizations that handle patient-
identifiable health care information--regardless of size--should adopt
the set of technical and organizational policies, practices, and
procedures described below to protect such information.''
    The proposed security standard addresses the following policies,
practices, and procedures that were listed under Recommendation 1:

<bullet> Organizational Practices
    1. Security and confidentiality policies
    2. Information security officers
    3. Education and training programs, and
    4. Sanctions
<bullet> Technical Practices and Procedures
    1. Individual authentication of users
    2. Access controls
    3. Audit trails
    4. Physical security and disaster recovery
    5. Protection of remote access points
    6. Protection of external electronic communications
    7. Software discipline, and
    8. System assessment

    ``Recommendation 3: The federal government should work with
industry to promote and encourage an informed public debate to
determine an appropriate balance between the primary concerns of
patients and the information needs of various users of health care
information.''
    This proposed security standard was developed in the spirit of
Recommendation 3. The security standard development process has been an
open one with invitations to a number of organizations to participate
in the security discussions. Although implementation team membership
was limited to government employees, nongovernmental organizations;
business organizations; individuals knowledgeable in security; and
educational institutions have been encouraged to express their views.
    As a result of the collaborative security regulation development
process, the implementation team has chosen to divide the proposed
security requirements, for purposes of presentation only, into the
following four categories:
    <bullet> Administrative procedures to guard data integrity,
confidentiality, and availability--these are documented, formal
practices to manage the selection and execution of security measures to
protect data and the conduct of personnel in relation to the protection
of data.
    <bullet> Physical safeguards to guard data integrity,
confidentiality, and availability--these relate to the protection of
physical computer systems and related buildings and equipment from fire
and other natural and environmental hazards, as well as from intrusion.
Physical safeguards also cover the use of locks, keys, and
administrative measures used to control access to computer systems and
facilities.
    <bullet> Technical security services to guard data integrity,
confidentiality, and availability--these include the processes that are
put in place to protect and to control and monitor information access,
and
    <bullet> Technical security mechanisms--these include the processes
that are put in place to prevent unauthorized access to data that is
transmitted over a communications network.
    It should be noted that the only necessity is that the requirements
would be met, not that they be presented in these four categories.
Under this proposed rule, a business entity could choose to order the
requirements in any manner that suits its business.
    We then determined the requirements and implementation features
that health plans, providers, and clearinghouses would implement. The
implementation features describe the requirements in greater detail.
Some requirements do not require this additional level of detail.
Within the four categories, the requirements and implementation
features are presented in alphabetical order to ensure that no one item
is considered to be more important than another. The relative
importance of the requirements and implementation features would depend
on the characteristics of each organization.
    The four categories of the matrix are described in greater detail
in Sec. 142.308 and are depicted in tabular form along with the
electronic signature standard in

[[Page 43251]]

a combined matrix located at Addendum 1. We have not included the
matrix in the proposed regulation text. We invite your comments
concerning the appropriateness and usefulness of including the matrix
in the final regulation text. We also solicit comments as to the level
of detail expressed in requirement implementation features; i.e., do
any represent a level of detail that goes beyond what is necessary or
appropriate. We have also provided a glossary of terms to facilitate a
common understanding of the matrix entries. The glossary can be found
at Addendum 2. Finally, we have included currently existing standards
and guidelines mapped to the proposed security standard. This mapping
is not all inclusive and is located at Addendum 3.
1. Administrative Procedures
[Please label written comments or e-mailed comments about this
section with the subject: administrative procedures]

    In this proposed rule, the administrative requirements and
supporting implementation features are presented at Sec. 142.308(a). We
would require each to be documented. We would require the documentation
to be made available to those individuals responsible for implementing
the procedures and would require it to be reviewed and updated
periodically. The following matrix depicts the requirements and
supporting implementation features for the Administrative Procedures
category. Following the matrix is a discussion of each of the
requirements under that category.

 Administrative Procedures To Guard Data Integrity, Confidentiality, and
                              Availability
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Certification
Chain of trust partner agreement
Contingency plan (all listed             Applications and data
 implementation features must be          criticality analysis.
 implemented).                           Data backup plan.
                                         Disaster recovery plan.
                                         Emergency mode operation plan.
                                         Testing and revision.
Formal mechanism for processing records
Information access control (all listed   Access authorization.
 implementation features must be         Access establishment.
 implemented).                           Access modification.
Internal audit
Personnel security (all listed           Assure supervision of
 implementation features must be          maintenance personnel by
 implemented).                            authorized, knowledgeable
                                          person.
                                         Maintenance of record of access
                                          authorizations.
                                         Operating, and in some cases,
                                          maintenance personnel have
                                          proper access authorization.
                                         Personnel clearance procedure.
                                         Personnel security policy/
                                          procedure.
                                         System users, including
                                          maintenance personnel, trained
                                          in security.
Security configuration mgmt. (all        Documentation.
 listed implementation features must be  Hardware/software installation
 implemented).                            & maintenance review and
                                          testing for security features.
                                         Inventory.
                                         Security Testing.
                                         Virus checking.
Security incident procedures (all        Report procedures.
 listed implementation features must be  Response procedures.
 implemented).
Security management process (all listed  Risk analysis.
 implementation features must be         Risk management.
 implemented).                           Sanction policy.
                                         Security policy.
Termination procedures (all listed       Combination locks changed.
 implementation features must be         Removal from access lists.
 implemented).                           Removal of user account(s).
                                         Turn in keys, token or cards
                                          that allow access.
Training (all listed implementation      Awareness training for all
 features must be implemented).           personnel (including mgmt)
                                         Periodic security reminders.
                                         User education concerning virus
                                          protection.
                                         User education in importance of
                                          monitoring log in success/
                                          failure, and how to report
                                          discrepancies.
                                         User education in password
                                          management
------------------------------------------------------------------------

    a. Certification. Each organization would be required to evaluate
its computer system(s) or network design(s) to certify that the
appropriate security has been implemented. This evaluation could be
performed internally or by an external accrediting agency.
    We are, at this time, soliciting input on appropriate mechanisms to
permit independent assessment of compliance. We would be particularly
interested in input from those engaging in health care electronic data
interchange (EDI), as well as independent certification and auditing
organizations addressing issues of documentary evidence of steps taken
for compliance; need for, or desirability of, independent verification,
validation, and testing of system changes; and certifications required
for off-the-shelf products used to meet the requirements of this
regulation.

[[Page 43252]]

    We also solicit comments on the extent to which obtaining external
certification would create an undue burden on small or rural providers.
    b. Chain of Trust Partner Agreement. If data are processed through
a third party, the parties would be required to enter into a chain of
trust partner agreement. This is a contract in which the parties agree
to electronically exchange data and to protect the transmitted data.
The sender and receiver are required and depend upon each other to
maintain the integrity and confidentiality of the transmitted
information. Multiple two-party contracts may be involved in moving
information from the originating party to the ultimate receiving party.
For example, a provider may contract with a clearinghouse to transmit
claims to the clearinghouse; the clearinghouse, in turn, may contract
with another clearinghouse or with a payer for the further transmittal
of those claims. These agreements are important so that the same level
of security will be maintained at all links in the chain when
information moves from one organization to another.
    c. Contingency Plan. We would require a contingency plan to be in
effect for responding to system emergencies. The organization would be
required to perform periodic backups of data, have available critical
facilities for continuing operations in the event of an emergency, and
have disaster recovery procedures in place. To satisfy the requirement,
the plan would include the following:
    <bullet> Applications and data criticality analysis,
    <bullet> A data backup plan,
    <bullet> A disaster recovery plan,
    <bullet> An emergency mode operation plan, and
    <bullet> Testing and revision procedures.
    d. Formal Mechanism for Processing Records There would be a formal
mechanism for processing records, that is, documented policies and
procedures for the routine and nonroutine receipt, manipulation,
storage, dissemination, transmission, and/or disposal of health
information. This is important to limit the inadvertent loss or
disclosure of secure information because of process issues.
    e. Information Access Control. An entity would be required to
establish and maintain formal, documented policies and procedures for
granting different levels of access to health care information. To
satisfy this requirement, the following features would be provided:
    <bullet> Access authorization policies and procedures.
    <bullet> Access establishment policies and procedures.
    <bullet> Access modification policies and procedures.
    Access control is also discussed later in this document in the
personnel security requirement and under the physical safeguards,
technical security services, and technical security mechanisms
categories.
    f. Internal Audit. There would be a requirement for an ongoing
internal audit process, which is the in-house review of the records of
system activity (for example, logins, file accesses, security
incidents) maintained by an entity. This is important to enable the
organization to identify potential security violations.
    g. Personnel Security. There would be a requirement that all
personnel with access to health information must be authorized to do so
after receiving appropriate clearances. This is important to prevent
unnecessary or inadvertent access to secure information. The personnel
security requirement would require entities to meet the following
conditions:
    <bullet> Assure supervision of personnel performing technical
systems maintenance activities by authorized, knowledgeable persons.
    <bullet> Maintain access authorization records.
    <bullet> Insure that operating, and in some cases, maintenance
personnel have proper access.
    <bullet> Employ personnel clearance procedures
    <bullet> Employ personnel security policy/procedures.
    <bullet> Ensure that system users, including technical maintenance
personnel are trained in system security.
    h. Security Configuration Management. The organization would be
required to implement measures, practices, and procedures for the
security of information systems. These would be coordinated and
integrated with other system configuration management practices in
order to create and manage system integrity. This integration process
is important to ensure that routine changes to system hardware and/or
software do not contribute to or create security weaknesses. This
requirement would include the following:
    <bullet> Documentation.
    <bullet> Hardware/software installation and maintenance review and
testing for security features.
    <bullet> Inventory procedures.
    <bullet> Security testing.
    <bullet> Virus checking.
    i. Security Incident Procedures. There would be a requirement to
implement accurate and current security incident procedures. These are
formal, documented instructions for reporting security breaches, so
that security violations are reported and handled promptly. These
instructions would include the following:
    <bullet> Report procedures.
    <bullet> Response procedures.
    j. Security Management Process. A process for security management
would be required. This involves creating, administering, and
overseeing policies to ensure the prevention, detection, containment,
and correction of security breaches. We would require the organization
to have a formal security management process in place to address the
full range of security issues. Security management includes the
following mandatory implementation features:
    <bullet> Risk analysis.
    <bullet> Risk management.
    <bullet> A sanction policy.
    <bullet> A security policy.
    k. Termination Procedures. There would be a requirement to
implement termination procedures, which are formal, documented
instructions, including appropriate security measures, for the ending
of an employee's employment or an internal/external user's access.
These procedures are important to prevent the possibility of
unauthorized access to secure data by those who are no longer
authorized to access the data. Termination procedures would include the
following mandatory implementation features:
    <bullet> Changing combination locks.
    <bullet> Removal from access lists.
    <bullet> Removal of user account(s).
    <bullet> Turn in of keys, tokens, or cards that allow access.
    1. Training. This proposed rule would require security training for
all staff regarding the vulnerabilities of the health information in an
entity's possession and procedures which must be followed to ensure the
protection of that information. This is important because employees
need to understand their security responsibilities and make security a
part of their day-to-day activities. The implementation features that
would be required to be incorporated follow:
    <bullet> Awareness training for all personnel, including
management, (this is also included as a requirement under physical
safeguards).
    <bullet> Periodic security reminders.
    <bullet> User education concerning virus protection.
    <bullet> User education in importance of monitoring login success/
failure, and how to report discrepancies.
    <bullet> User education in password management.

[[Page 43253]]

2. Physical Safeguards To Guard Data Integrity, Confidentiality, and
Availability
[Please label written comments or e-mailed comments about this
section with the subject: Physical Safeguards]

    The requirements and implementation features for physical
safeguards are presented at Sec. 142.308(b) of this proposed rule. We
would require each of these safeguards to be documented. We would
require this documentation to be made available to those individuals
responsible for implementing the safeguards and to be reviewed and
updated periodically. The following matrix depicts the requirements and
implementation features for the Physical Safeguards category. Following
the matrix is a discussion of each of the requirements under that
category.

    Physical Safeguards To Guard Data Integrity, Confidentiality, and
                              Availability
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Assigned security responsibility
Media controls (all listed               Access control.
 implementation features must be         Accountability (tracking
 implemented).                            mechanism).
                                         Data backup.
                                         Data storage.
                                         Disposal.
Physical access controls (limited        Disaster recovery.
 access) (all listed implementation      Emergency mode operation.
 features must be implemented).          Equipment control (into and out
                                          of site).
                                         Facility security plan.
                                         Procedures for verifying access
                                          authorizations prior to
                                          physical access.
                                         Maintenance records.
                                         Need-to-know procedures for
                                          personnel access.
                                         Sign-in for visitors and
                                          escort, if appropriate.
                                         Testing and revision.
Policy/guideline on work station use
Secure work station location
Security awareness training.
------------------------------------------------------------------------

    a. Assigned Security Responsibility. We would require the security
responsibility to be assigned to a specific individual or organization,
and the assignment be documented. These responsibilities would include
the management and supervision of (1) the use of security measures to
protect data, and (2) the conduct of personnel in relation to the
protection of data. This assignment is important to provide an
organizational focus and importance to security and to pinpoint
responsibility.
    b. Media Controls. Media controls would be required in the form of
formal, documented policies and procedures that govern the receipt and
removal of hardware/software (for example, diskettes, tapes) into and
out of a facility. They are important to ensure total control of media
containing health information. These controls would include the
following mandatory implementation features:
    <bullet> Controlled access to media.
    <bullet> Accountability (tracking mechanism).
    <bullet> Data backup.
    <bullet> Data storage.
    <bullet> Disposal.
    c. Physical Access Controls. Physical access controls (limited
access) would be required. These would be formal, documented policies
and procedures for limiting physical access to an entity while ensuring
that properly authorized access is allowed. These controls would be
extremely important to the security of health information by preventing
unauthorized physical access to information and ensuring that
authorized personnel have proper access. These controls would include
the following mandatory implementation features:
    <bullet> Disaster recovery.
    <bullet> Emergency mode operation.
    <bullet> Equipment control (into and out of site).
    <bullet> A facility security plan.
    <bullet> Procedures for verifying access authorizations prior to
physical access.
    <bullet> Maintenance records.
    <bullet> Need-to-know procedures for personnel access.
    <bullet> Sign-in for visitors and escort, if appropriate.
    <bullet> Testing and revision.
    d. Policy/Guideline on Workstation Use. Each organization would be
required to have a policy/guideline on workstation use. These
documented instructions/procedures would delineate the proper functions
to be performed and the manner in which those functions are to be
performed (for example, logging off before leaving a terminal
unattended). This would be important so that employees will understand
the manner in which workstations must be used to maximize the security
of health information.
    e. Secure Workstation Location. Each organization would be required
to put in place physical safeguards to eliminate or minimize the
possibility of unauthorized access to information. This would be
important especially in public buildings, provider locations, and in
areas where there is heavy pedestrian traffic.
    f. Security Awareness Training. Security awareness training would
be required for all employees, agents, and contractors. This would be
important because employees would need to understand their security
responsibilities based on their job responsibilities in the
organization and make security a part of their daily activities.
3. Technical Security Services To Guard Data Integrity,
Confidentiality, and Availability
[Please label written comments or e-mailed comments about this
section with the subject: Technical Security Services]

    The proposed requirements and implementation features for technical
security services are presented at Sec. 142.308(c). We would require
each of these services to be implemented and documented. The
documentation would be made available to those individuals responsible
for implementing the services and would be reviewed and updated
periodically. The following matrix depicts the requirements and
implementation features for the Technical Security Services category.
Following the matrix is a discussion of

[[Page 43254]]

each of the requirements under that category.

  Technical Security Services To Guard Data Integrity, Confidentiality,
                            and Availability
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Access control (The following            Context-based access.
 implementation feature must be          Encryption.
 implemented: Procedure for emergency    Procedure for emergency access.
 access. In addition, at least one of    Role-based access.
 the following three implementation      User-based access.
 features must be implemented: Context-
 based access, Role-based access, User-
 based access. The use of Encryption is
 optional).
Audit controls
Authorization control (At least one of   Role-based access.
 the listed implementation features      User-based access.
 must be implemented).
Data Authentication
Entity authentication (The following     Automatic logoff.
 implementation features must be         Biometric.
 implemented: Automatic logoff, Unique   Password.
 user identification. In addition, at    PIN.
 least one of the other listed           Telephone callback.
 implementation features must be         Token.
 implemented).                           Unique user identification.
------------------------------------------------------------------------

    a. Access Control. There would be a requirement for access control
which would restrict access to resources and allow access only by
privileged entities. It would be important to limit access to health
information to those employees who have a business need to access it.
Types of access control include, among others, mandatory access
control, discretionary access control, time-of-day, classification, and
subject-object separation. The following implementation feature would
be used:
    <bullet> Procedure for emergency access.
    In addition, at least one of the following three implementation
features would be used:
    <bullet> Context-based access.
    <bullet> Role-based access.
    <bullet> User-based access.
    The use of the encryption implementation feature would be optional.
    b. Audit Controls. Each organization would be required to put in
place audit control mechanisms to record and examine system activity.
They would be important so that the organization can identify suspect
data access activities, assess its security program, and respond to
potential weaknesses.
    c. Authorization Control. There would be a requirement to put in
place a mechanism for obtaining consent for the use and disclosure of
health information. These controls would be necessary to ensure that
health information is used only by properly authorized individuals.
Either of the following implementation features may be used:
    <bullet> Role-based access.
    <bullet> User-based access (see access control, above.).
    d. Data Authentication. Each organization would be required to be
able to provide corroboration that data in its possession has not been
altered or destroyed in an unauthorized manner. Examples of how data
corroboration may be assured include the use of a check sum, double
keying, a message authentication code, or digital signature.
    e. Entity Authentication. Each organization would be required to
implement entity authentication, which is the corroboration that an
entity is who it claims to be. Authentication would be important to
prevent the improper identification of an entity who is accessing
secure data. The following implementation features would be used:
    <bullet> Automatic log off.
    <bullet> Unique user identification.
    In addition, at least one of the following implementation features
would be used:
    <bullet> A biometric identification system.
    <bullet> A password system.
    <bullet> A personal identification number (PIN).
    <bullet> Telephone callback.
    <bullet> A token system which uses a physical device for user
identification.
4. Technical Security Mechanisms To Guard Against Unauthorized Access
to Data That Is Transmitted Over a Communications Network
[Please label written comments or e-mailed comments about this
section with the subject: Technical Security Mechanisms]

    In this proposed rule, the requirements and implementation features
for technical security mechanisms are presented at Sec. 142.308(d).
Each of these mechanisms would need to be documented. The documentation
would be made available to those individuals responsible for
implementing the mechanisms and would be reviewed and updated
periodically. The following matrix depicts the requirement and
implementation features for the Technical Security Mechanisms category.
Following the matrix is a discussion of the requirement under that
category.

[[Page 43255]]

  Technical Security Mechanisms To Guard Against Unauthorized Access to
         Data That Is Transmitted Over a Communications Network
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Communications/network controls (If      Access controls.
 communications or networking is         Alarm.
 employed, the following implementation  Audit trail.
 features must be implemented:           Encryption.
 Integrity controls, Message             Entity authentication.
 authentication. In addition, one of     Event reporting.
 the following implementation features   Integrity controls.
 must be implemented: Access controls,   Message authentication.
 Encryption. In addition, if using a
 network, the following four
 implementation features must be
 implemented: Alarm, Audit trail,
 Entity authentication, Event
 reporting).
------------------------------------------------------------------------

    Each organization that uses communications or networks would be
required to protect communications containing health information that
are transmitted electronically over open networks so that they cannot
be easily intercepted and interpreted by parties other than the
intended recipient, and to protect their information systems from
intruders trying to access systems through external communication
points. When using open networks, some form of encryption should be
employed. The utilization of less open systems/networks such as those
provided by a value-added network (VAN) or private-wire arrangement
provides sufficient access controls to allow encryption to be an
optional feature. These controls would be important because of the
potential for compromise of information over open systems such as the
Internet or dial-in lines.
    The following implementation features would be in place:
    <bullet> Integrity controls.
    <bullet> Message authentication.
    One of the following implementation features would be in place:
    <bullet> Access controls.
    <bullet> Encryption.
    In addition, if using a network for communications, the following
implementation features would be in place:
    <bullet> Alarm.
    <bullet> Audit trail.
    <bullet> Entity authentication.
    <bullet> Event reporting.
    Small or Rural Provider Example. The size and organizational
structure of the entities that would be required to implement this
standard vary tremendously. Therefore, it would be impossible to
provide examples that would cover every possible implementation of
security in the health care industry. Nevertheless, we have included an
example describing the manner in which a small or rural provider might
choose to implement the requirements of the standard. (For purposes of
this example, we would describe a small or rural provider as a one to
four physician office, with two to five additional employees. The
office uses a PC-based practice management system, which is used to
communicate intermittently with a clearinghouse for submission of
electronic claims. The number of providers is of less importance for
this example than the relatively simple technology in use and the fact
that there is insufficient volume or revenue to justify employment of a
computer system administrator.) We want to emphasize that there are
numerous ways in which an entity could implement these requirements and
features. This example does not necessarily represent the best way or
the only way in which an entity could choose to implement security.
    We anticipate that the small or rural provider office, as described
above, would normally evaluate and self-certify that the appropriate
security is in place for its computer system and office procedures.
This evaluation could be done by a knowledgeable person on the staff,
or more likely, by a consultant or by the vendor of the practice
management system as a service to its customers. First, the office
might assess actual and potential risks to its information assets.
Then, to establish appropriate security, the office would develop
policies and procedures to mitigate and manage those risks. These would
include an overall framework outlining information security activities
and responsibilities, and repercussions for failure to meet those
responsibilities.
    Next, this office might develop contingency plans to reduce or
negate the damage resulting from processing anomalies; for example,
establish a routine process for maintaining back up floppy disks at a
second location, obtain a PC maintenance contract, and arrange for use
of a backup PC should the need arise. This office would need to
periodically review its plan to determine whether it still met the
office's needs.
    The office would need to create and document a personnel security
policy and procedures to be followed. A key individual on the office
staff should be charged with the responsibility for assuring the
Personnel Security requirement is met. This responsibility would
include seeing that the access authorization levels granted are
documented and kept current (for example, records are kept of everyone
who is permitted to use the PC and what files they may access), and
training all personnel in security. Again, we emphasize that these
requirements are scalable. The requirement for Personnel Clearance
Procedures could be met in a small office with standard personal and
professional reference checks, while a large organization may employ
more formal, rigorous background investigations.
    This same individual could also be charged with the responsibility
for Security Configuration Management and Termination Procedures. For
our small provider, the Security Configuration Management requirement
would be relatively easy to satisfy; the necessary features could be
part of a purchased hardware/software package (for example, a new PC
might be equipped with virus checking software), or included as part of
the support supplied with the purchase of equipment and software.
Termination procedures would incorporate specific security actions to
be taken as a result of an employee's termination, such as obtaining
all keys and changing combinations or passwords. A ``position
description'' document describing this person's duties could specify
the level of detail necessary.
    The small or rural provider office would also need to ensure that
they have activated the internal auditing capability of the software
used to manage health data files so that it tracks who has accessed the
data. (We expect that the capability of keeping audit trails will
become standard in all health care software in the near future, spurred
on by the health information privacy debates in the Congress and
elsewhere.)
    A small or rural provider may document compliance with many of the

[[Page 43256]]

foregoing administrative security requirements by including them in an
``office procedures'' type of document that should be required reading
by new employees and always available for reference. Requirements that
would lend themselves to inclusion in an ``office procedures'' document
include: contingency plans, formal records processing procedures,
information access controls (rules for granting access, actual
establishment of access, and procedures for modifying such access),
security incident procedures (for example, who is to be notified if it
appears that medical information has been accessed by an unauthorized
party), and training. Periodic security reminders could include visual
aids, such as posters and screen savers, and oral reminders in
recurring meetings.
    Physical Access controls would be relatively straightforward for
this small or rural office, using locked rooms and/or closets to secure
equipment and media from unauthorized access. The ``office procedures/
policies'' manual should include directions for authorizing access and
keeping records of authorized accesses. Media Controls and Workstation
Use policy instructions would be developed by the office and would
include additional instructions on such items as where to store backed-
up data, how to dispose of data no longer needed, or logging off when
leaving terminals unattended.
    Safeguards for the security of workstation location(s) would depend
upon the physical surroundings in the small or rural office. Our small
or rural provider may meet the requirements by locating equipment in
areas that are generally populated by office staff and have some degree
of physical separation from the public. Security Awareness Training
would be part of the new employee orientation process and would be a
periodic recurring discussion item in staff meetings.
    The Technical Security Services requirements for Access Control,
Entity Authentication, and Authorization Control may be achieved simply
by implementing a user-based data access model (assigning a user-name
and password combination to each authorized employee). Other access
models could be employed if desired, but would prove unwieldy for the
small office. For example, the role-based access process groups users
with similar data access needs, and context-based access is based upon
the context of a transaction--not on the attributes of the initiator.
By assigning full access rights to a minimum of two key individuals in
the office, implementation of the Emergency Access feature could be
satisfied. Audit control mechanisms, by necessity, would be provided by
software featuring that capability. By establishing and using a message
authentication code, Data Authentication would be achieved. Use of the
password system mentioned above could also satisfy the Unique User
Identification requirement.
    As our example provider contracts with a third party to handle
claims processing, the claims processing contract would be the vehicle
to provide for a chain of trust (requiring the contractor to implement
the same security requirements and take responsibility for protecting
the data it receives).
    If this provider chooses to use the Internet to transmit or receive
health information, some form of encryption must be used. For example,
the provider could procure and use commercial software to provide
protection against unauthorized access to the data transmitted or
received. (This decision must take into account what encryption system
the message recipient uses.) On the other hand, health information when
transmitted via other means such as VANs, private wires, or even dial-
up connections may not require such absolute protection as is provided
by encryption. This small or rural provider would likely not be part of
a network configuration, therefore, only integrity controls and message
authentication would be required and could be provided by currently
available software products, most likely provided as part of their
contract with their health care clearinghouse.
    Small providers may need guidance regarding the content of the
documents required by this rule (for example, specifics of a chain of
trust partner agreement). We would expect models of the documentation
discussed in this example to be developed by industry associations and
vendors. If this model documentation is not developed, DHHS would work
with the industry to develop them.

E. Electronic Signature Standard

[Please label written comments or e-mailed comments about this
section with the subject: Electronic Signature Standard]

    HIPAA directs the Secretary of the Department of Health and Human
Services to coordinate with the Secretary of the Department of Commerce
in adopting standards for the electronic transmission and
authentication of signatures with respect to the transactions referred
to in the law. This rule was developed in coordination with the
Department of Commerce's National Institute of Standards and
Technology. We propose to adopt a cryptographically based digital
signature as the standard.
    Whenever a HIPAA specified transaction requires the use of an
electronic signature, the standard must be used. It should be noted
that an electronic signature is not required for any of the currently
proposed standard transactions.
    In the electronic environment, the same legal weight associated
with an original signature on a paper document may be needed for
electronic data. Use of an electronic signature refers to the act of
attaching a signature by electronic means. The electronic signature
process involves authentication of the signer's identity, a signature
process according to system design and software instructions, binding
of the signature to the document and non-alterability after the
signature has been affixed to the document. The generation of
electronic signatures requires the successful identification and
authentication of the signer at the time of the signature.
    The proposed standard for electronic signature is presented at
Sec. 142.310 and would be digital.
    The following matrix depicts the requirement and implementation
features for electronic signatures. Following the matrix is a
discussion of the electronic signature requirement.

[[Page 43257]]

                          Electronic Signature
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Digital signature (If digital signature  Ability to add attributes.
 is employed, the following three        Continuity of signature
 implementation features must be          capability.
 implemented: Message integrity,         Countersignatures.
 Nonrepudiation, User authentication.    Independent verifiability.
 Other implementation features are       Interoperability.
 optional).                              Message integrity.
                                         Multiple Signatures.
                                         Nonrepudiation.
                                         Transportability.
                                         User authentication.
------------------------------------------------------------------------

    Various technologies may fulfill one or more of the requirements
specified in the matrix. Authentication systems (passwords, biometrics,
physical feature authentication, behavioral actions and token-based
authentication) can be combined with cryptographic techniques to form
an electronic signature. However, a complete electronic signature
system may require more than one of the technologies mentioned above.
If electronic signatures would be used, certain implementation features
must be included, specifically:
    <bullet> Message integrity.
    <bullet> Nonrepudiation.
    <bullet> User authentication.
    Currently there are no technically mature techniques that provide
the security service of nonrepudiation in an open network environment,
in the absence of trusted third parties, other than digital signature-
based techniques. Therefore, if electronic signatures are employed, we
would require that digital signature technology be used. A digital
signature is formed by applying a mathematical function to the
electronic document. This process yields a unique bit string, referred
to as a message digest. The digest (only) is encrypted using the
originator's private key and the resulting bit stream is appended to
the electronic document. The recipient of the transmitted document
decrypts the message digest with the originator's public key, applies
the same message hash function to the document, then compares the
resulting digest with the transmitted version. If they are identical,
then the recipient is assured that the message is unaltered and the
identity of the signer is proven. Since only the signatory authority
can hold the Private Key used to digitally sign the document, the
critical feature of nonrepudiation is enforced. Other electronic
signature implementation features that may be used follow:
    <bullet> Ability to add attributes.
    <bullet> Continuity of signature capability.
    <bullet> Countersignatures capability.
    <bullet> Independent verifiability.
    <bullet> Interoperability.
    <bullet> Multiple signatures.
    <bullet> Transportability.
    This standard is described in greater detail in Sec. 142.310 of the
regulation text and is depicted in tabular form along with the security
standard in a combined matrix located at Addendum 1. We have not
included the matrix in the proposed regulation text. We invite your
comments concerning the appropriateness and usefulness of including the
matrix in the final regulation text. We have also provided a glossary
of terms to facilitate a common understanding of the matrix entries.
The glossary can be found at Addendum 2. Finally, we have included
currently existing standards and guidelines mapped to the proposed
electronic signature standard. This mapping is not all inclusive and is
located at Addendum 3.

F. Selection Criteria

    Each individual implementation team weighted the criteria described
in section I.B. above, Process for Developing National Standards, in
terms of the standard it was addressing. As we assessed security and
electronic signatures, it became apparent that while the security
standard set forth in Sec. 142.308 and the electronic signature
standard set forth in Sec. 142.310 satisfy all the criteria described
above, they most strongly address criteria 1, 3, 7, 9, and 10. These
criteria are described below in the specific context of these
standards.
    1. Improve the efficiency and effectiveness of the health care
system.
    The security and electronic signature standards would be integrated
with the electronic transmission of health care information to improve
the overall effectiveness of the health care system. This integration
would assure that electronic health care information would not be
accessible to any unauthorized person or organization, but would be
both accurate and available to those who are authorized to receive it.
    3. Be consistent and uniform with the other HIPAA standards and,
secondly, with other private and public sector health data standards.
    The security and electronic signature standards were developed
after a comprehensive review of existing standards and guidelines, with
significant input by a wide range of industry experts. As indicated in
Addendum 3, the standards map well to existing standards and
guidelines.
    7. Be technologically independent of computer platforms and
transmission protocols.
    We have defined the security and electronic signature standards in
terms of requirements that would allow businesses in the health care
industry to select the technology that best meets their business
requirements while still allowing them to comply with the standards.
    9. Keep data collection and paperwork burdens on users as low as is
feasible.
    The security and electronic signature standards would allow
individual health care industry businesses to ascertain the level of
security information that would be needed. The confidentiality level
associated with individual data elements concerning health care
information would determine the appropriate security application to be
used. The security standard would define the requirements to be met to
achieve the privacy and confidentiality goal, but each business entity,
driven by its business requirements, would decide what techniques and
controls would provide appropriate and adequate electronic data
protection. This would allow data collection and the paperwork burden
to be as low as is feasible.
    10. Incorporate flexibility to adapt more easily to changes in the
health care infrastructure and information technology.
    A technologically neutral security standard would be more adaptable
to changes in infrastructure and information technology.

[[Page 43258]]

G. Consultations

    In the development of the security and electronic signature
standards, we consulted with many organizations, including those the
legislation requires (section 1172(c)(3)(B) of the Act):
    1. The NCVHS held two days of public hearings on security issues in
August 1997, and made a recommendation to the Secretary of HHS, as
required by the legislation. The NCVHS recommendation to the Secretary
of HHS, as required by the legislation, was for a technologically
neutral standard. It identified certain criteria to be established for
a health information system to be secure. The proposed security
standard complies with the NCVHS security recommendation.
    2. The ANSI Accredited Standards Committee (ASC) X12 subcommittees
on communication and control, insurance and government were contacted.
Their current standards development effort is focused on messaging
rather than on security requirements.
    3. American Society for Testing and Materials (ASTM), Committee E31
on Computerized Systems participated in the security discussions.
    4. Association for Electronic Health Care Transactions (AFEHCT),
the clearinghouse organization, provided information on its health care
transaction process requirements and emphasized that the security
standard must be adaptable to different business needs.
    5. Computer-based Patient Record Institute (CPRI) was consulted
because the Work Group on Confidentiality, Privacy and Security is
working on the establishment of guidelines, confidentiality agreements,
security requirements, and frameworks. CPRI works closely with
accredited standards development organizations.
    6. Health Level Seven (HL-7) has been contacted through its
participation at the HISB meetings.
    7. NUCC and the NUBC were apprised of the different implementation
teams' efforts. NUBC has not addressed security issues at any of the
public meetings. NUCC identified a number of issues at its November 18-
19 meeting and provided written comments to us.

H. Rules for Security Standards and Electronic Signature Standard

    1. Health Plans
    a. In Sec. 142.306(a), we would require health plans to accept and
apply the security standard to all health care information pertaining
to an individual that is electronically maintained or electronically
transmitted. Federal agencies and States may place additional
requirements on their health plans. In addition, trading partners may
mutually agree to implement additional security measures.
    b. In Sec. 142.310(a), entities would not be required to use an
electronic signature. However, if a plan elects to use an electronic
signature in one of the transactions named in the law, it would be
required to apply the electronic signature standard described in
Sec. 142.310(b) to that transaction. In the future, we anticipate that
the standards for other transactions may include requirements for
signatures. In particular, the proposed standard for claims
attachments, which will be issued in a separate regulations package
later, may include signature requirements on some or all of the
attachments. If the proposed attachments standard includes such
signature requirements, we will address the issue of how to reconcile
such requirements with existing State and Federal requirements for
written signatures as part of the proposed rule.
2. Health Care Clearinghouses
    a. We would require in Sec. 142.306(b) that each health care
clearinghouse comply with the security standard to ensure all health
care information and activities are protected from unauthorized access.
If the clearinghouse is part of a larger organization, then security
must be imposed to prevent unauthorized access by the larger
organization. The security standards apply to all health information
pertaining to an individual that is electronically maintained or
electronically transmitted.
    b. In Sec. 142.310(a), entities would not be required to use an
electronic signature. However, if a plan elects to use an electronic
signature in one of the transactions named in the law, it would be
required to apply the electronic signature standard described in
Sec. 142.310(b) to that transaction. In the future, we anticipate that
the standards for other transactions may include requirements for
signatures. In particular, the proposed standard for claims
attachments, which will be issued in a separate regulations package
later, may include signature requirements on some or all of the
attachments. If the proposed attachments standard includes such
signature requirements, we will address the issue of how to reconcile
such requirements with existing State and Federal requirements for
written signatures as part of the proposed rule.
3. Health Care Providers
    a. In Sec. 142.306(a), we would require each health care provider
to apply the security standard to all health information pertaining to
an individual that is electronically maintained or electronically
transmitted.
    b. In Sec. 142.310(a), entities would not be required to use an
electronic signature. However, if a plan elects to use an electronic
signature in one of the transactions named in the law, it would be
required to apply the electronic signature standard described in
Sec. 142.310(b) to that transaction. In the future, we anticipate that
the standards for other transactions may include requirements for
signatures. In particular, the proposed standard for claims
attachments, which will be issued in a separate regulations package
later, may include signature requirements on some or all of the
attachments. If the proposed attachments standard includes such
signature requirements, we will address the issue of how to reconcile
such requirements with existing State and Federal requirements for
written signatures as part of the proposed rule.

I. Effective Dates

    Health plans would be required to comply with the security and
electronic signature standards as follows:
    1. Each health plan that is not a small health plan would have to
comply with the requirements of Secs. 142.306, 142.308, and 142.310 no
later than 24 months after publication of the final rule.
    2. Each small health plan would have to comply with the
requirements of Secs. 142.306, 142.308, and 142.310 no later than 36
months after the date of publication of the final rule.
    3. If the effective date for the electronic transaction standards
is later than the effective date for the security standard,
implementation of the security standard would not be delayed until the
standard transactions are in use. The security standard would still be
effective with respect to electronically stored or maintained data.
Security of health information would not be solely tied to the standard
transactions but would apply to all individual health information
electronically stored, maintained, or transmitted.
    4. Under this proposed rule, in some cases, a health plan could
choose to convert from paper to standard EDI transactions prior to the
effective date of the security standard. We would recommend that the
security standard be implemented at that time in order to safeguard the
data in those transactions. We invite comments on this issue.

[[Page 43259]]

    Failure to comply with standards may result in monetary penalties.
The Secretary is required by statute to impose penalties of not more
than $100 per violation on any person who fails to comply with a
standard, except that the total amount imposed on any one person in
each calendar year may not exceed $25,000 for violations of one
requirement.
    We are not proposing any enforcement procedures at this time, but
we plan to do so in a future Federal Register document once the
industry has some experience with using the standards. These procedures
will be in place by the time the standards are implemented by industry.
We envision the monitoring and enforcement process as a partnership
between the Federal government and the private sector. Some private
accreditation bodies have already exhibited interest in certifying
compliance with the security requirements as part of their
accreditation reviews. Small providers may be able to self-certify
through industry-developed checklists. HHS would likely retain the
final responsibility for determining violations and imposing the
penalties specified by the statute. We welcome comments on this
approach.

III. Implementation

    If an entity elects to use an electronic signature in a
transaction, or if an electronic signature is required by a transaction
standard adopted by the Secretary, the entity must apply the electronic
signature standard described in Sec. 142.310(b).
    How the security standard would be implemented is dependent upon
industry trading partner agreements for electronic transmissions. The
health care industry would be able to adapt the security matrix to meet
its business needs. We propose that the requirements of the security
standard be implemented over time. However, we would require
implementation to be complete by the applicable effective date. We
would encourage, but not require that entities comply with the security
standard as soon as practicable, preferably before implementing the
transactions standards.
    The security standard would supersede contrary provisions of State
law including State law requiring medical or health plan records to be
maintained or transmitted in other electronic formats. There are
certain exceptions when the standards would not supersede contrary
provisions of State law; section 1178 identifies those conditions and
directs the Secretary to determine whether a particular State provision
falls within one or more of the exceptions.
    The electronic signature standard (digital signature) would be
deemed to satisfy Federal and State statutory requirements for written
signatures with respect to the named transactions referred to in the
legislation.
    Several accreditation organizations such as the Electronic
Healthcare Network Accreditation Commission (EHNAC), the Joint
Commission on Accreditation of Healthcare Organizations (JCAHO), and
the National Committee for Quality Assurance (NCQA), indicate that one
of their accreditation requirements will be compliance with the HIPAA
security and electronic signature (if applicable) standards.

IV. New and Revised Standards

    To encourage innovation and promote development, we plan to
establish a process to allow an organization to request a revision or
replacement to any adopted standard or standards. An organization could
request a revision or replacement to an adopted standard by requesting
a waiver from the Secretary of Health and Human Services to test a
revised or new standard. The organization would be required, at a
minimum, to demonstrate that the revised or new standard offers a clear
improvement over the adopted standard. If the organization presents
sufficient documentation that supports testing of a revised or new
standard, we want to be able to grant the organization a temporary
waiver to test while remaining in compliance with the law. We do not
intend to establish a process that would allow an organization to avoid
using any adopted standard.
    We would welcome comments on the following: (1) How we should
establish this process, (2) the length of time a proposed standard
should be tested before we decide whether to adopt it, (3) whether we
should solicit public comments before implementing a change in a
standard, and (4) other issues and recommendations we should consider.
Comments should be submitted to the addresses presented in the
ADDRESSES section of this document.
    The following is one possible process:
    <bullet> Any organization that wishes to revise or replace an
adopted standard would submit its waiver request to an HHS evaluation
committee (to be established or defined). The organization would do the
following for each standard it wishes to revise or replace:
    + Provide a detailed explanation, no more than 10 pages, of how the
revision or replacement would be a clear improvement over the current
standard.
    + Provide specifications and technical capabilities on the revised
or new standard, including any additional system requirements.
    + Provide an explanation, no more than five pages, of how the
organization intends to test the standard.
    <bullet> The committee's evaluation would, at a minimum, be based
on the following:
    + A cost-benefit analysis.
    + An assessment of whether the proposed revision or replacement
demonstrates a clear improvement to an existing standard.
    + The extent and length of time of the waiver.
    <bullet> The evaluation committee would inform the organization
requesting the waiver within 30 working days of the committee's
decision on the waiver request. If the committee decides to grant a
waiver, the notification may include the following:
    + Committee comments such as the following:

--The length of time for which the waiver applies if it differs from
the waiver request.
--The sites the committee believes are appropriate for testing if they
differ from the waiver request.
--Any pertinent information regarding the conditions of an approved
waiver.
    <bullet> Any organization that receives a waiver would be required
to submit a report containing the results of the study, no later than 3
months after the study is completed.
    <bullet> The committee would evaluate the report and determine
whether the benefits of the proposed revision or new standard
significantly outweigh the disadvantages of implementing it and make a
recommendation to the Secretary.

V. Response to Comments

    Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the major comments in the preamble of that
document.

VI. Impact Analysis

    As the effect of any one standard is affected by the implementation
of other standards, it can be misleading to discuss the impact of one
standard by itself. Therefore, we did an impact

[[Page 43260]]

analysis on the total effect of all the standards in the proposed rule
concerning the national provider identifier (HCFA-0045-P), which was
published on May 7, 1998 (63 FR 25320).
    We intend to publish in each proposed rule an impact analysis that
is specific to the standard or standards proposed in that rule, but the
impact analysis will assess only the relative cost impact of
implementing a given standard. Thus, the following discussion contains
the impact analysis for the security standard and the electronic
signature standard proposed in this rule. As stated in the general
impact analysis in HCFA-0045-P, we do not intend to associate costs and
savings to specific standards.
    Although we cannot determine the specific economic impact of the
standards being proposed in this rule (and individually each standard
may not have a significant impact), the overall impact analysis makes
clear that, collectively, all the standards will have a significant
impact of over $100 million on the economy. Also, while each standard
may not have a significant impact on a substantial number of small
entities, the combined effects of all the proposed standards may have a
significant effect on a substantial number of small entities.
Therefore, the following impact analysis should be read in conjunction
with the overall impact analysis.
    The following describes the specific impacts that relate to the
security and electronic signature standards. Security protection for
health care information is not a ``stand-alone'' type requirement.
Appropriate security protections will be a business enabler,
encouraging the growth and use of electronic data interchange. The
synergistic effect of the employment of the recommended security
practices, procedures and technologies will enhance all aspects of
HIPAA's Administrative Simplification requirements. In addition, it is
important to recognize that security is not a product, but is an on-
going, dynamic process.
    In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.

A. Security Standard

    HIPAA requires that all health plans, health care providers, and
health care clearinghouses that maintain or transmit health information
electronically establish and maintain reasonable and appropriate
administrative, technical, and physical safeguards to ensure integrity,
confidentiality, and availability of the information. The safeguards
also protect the information against any reasonably anticipated threats
or hazards to the security or integrity of the information and protect
it against unauthorized use or disclosure. Recommendation 1 from the
National Research Council's (NRC) report For the Record: Protecting
Electronic Health Information (``All organizations that handle patient-
identifiable health care information-- regardless of size--should adopt
the set of technical and organization policies, practices, and
procedures described * * * to protect such information.'') would apply
to all health care providers regardless of size, health care
clearinghouses, and health plans. We agree with the NRC's belief that
implementation of the practices and technologies delineated in
Recommendation 1 would be possible today, and at a reasonable cost.
    Health care providers that conduct electronic transactions with
health plans would have to comply with the recommendation(s) for
security protection. There is, however, no requirement to maintain
health records electronically or transmit health care information by
electronic means. There may also be health care providers that
currently submit health care information on paper but archive records
electronically. These entities will need to ensure that their existing
electronic systems conform to security requirements for maintaining
health information. Once they have done so, however, they may also take
advantage of all the other benefits of electronic recordkeeping and
transmittal. Therefore, no individual small entity is expected to
experience direct costs that exceed benefits as a result of this rule.
Furthermore, because almost all of the NRC recommendations reflect
contemporary security measures and controls, most organizations that
currently have security measures should have to make few, if any,
modifications to their systems to meet the requirements proposed in the
security standard.
    The singular exception to the above lies in the area of providing
security for the electronic transmission of health care information
over insecure, public media. Here, the choice of a method to use is
driven by economic factors. If an organization wishes to use an
insecure transmission media such as the Internet, and take advantage of
the low costs involved, off-setting costs may need to be incurred to
provide for an acceptable form of encryption so that health information
will be protected from intercept and possible misuse.
    One alternative course of action to encrypting the information
would be to use the services of a VAN. VANs do not manipulate data, but
rather transmit data in its native form over telecommunication lines.
We anticipate that VANs would be positively affected by administrative
simplification, because use of the proposed transactions standards
would eliminate the need for data to be reformatted. This would allow
providers to purchase the services of a VAN directly, rather than as a
service bundled with the functions of other clearinghouses. Another
course of action might be to use private lines which would provide an
appropriate level of protection for data in transmission.

B. Electronic Signature Standard

    HIPAA does not require the use of electronic signatures. This
particular capability, however, would be necessary for a completely
paperless environment. Certain features of the digital signature type
of electronic signature make this particular system the most desirable.
Only digital signatures, using current technology, provide the
combination of authenticity, message integrity, and nonrepudiation
which is viewed as a desirable complement to the security standards
required by the law.
    The use of digital signatures requires a certain infrastructure
(Public Key Infrastructure) that may necessitate the expenditure of
initial and recurring costs for users. We do not know what these costs
are presently, due to the lack of maturity of digital signature
technology, and minimal use in the marketplace today. It is noted that
public key certificate management systems and services do exist today,
and it is presumed more quantifiable information will be forthcoming,
as to potential costs and savings that can be associated with the use
of digital signature systems. Other forms of electronic signature were
considered, such as biometric and digitized signatures. While they
provide a useful capability in certain circumstances, we believe that
digital signature technology is most appropriate for this particular
application.

C. Guiding Principles for Standard Selection

    The implementation teams charged with designating standards under
the statute have defined, with significant input from the health care
industry, a set of common criteria for evaluating potential standards.
These criteria are based on direct specifications in the HIPAA, the
purpose of the law, and principles that support the regulatory

[[Page 43261]]

philosophy set forth in EO 12866 of September 30, 1993. In order to be
designated as a standard, EO 12866 requires that a proposed standard:
    <bullet> Improve the efficiency and effectiveness of the health
care system by leading to cost reductions for or improvements in
benefits from electronic HIPAA health care transactions. This principle
supports the regulatory goals of cost-effectiveness and avoidance of
burden.
    <bullet> Meet the needs of the health data standards user
community, particularly health care providers, health plans, and health
care clearinghouses. This principle supports the regulatory goal of
cost-effectiveness.
    <bullet> Be consistent and uniform with the other HIPAA standards
(that is, their data element definitions and codes and their privacy
and security requirements) and, secondarily, with other private and
public sector health data standards. This principle supports the
regulatory goals of consistency and avoidance of incompatibility, and
it establishes a performance objective for the standard.
    <bullet> Have low additional development and implementation costs
relative to the benefits of using the standard. This principle supports
the regulatory goals of cost-effectiveness and avoidance of burden.
    <bullet> Be supported by an ANSI-accredited standards developing
organization or other private or public organization that would ensure
continuity and efficient updating of the standard over time. This
principle supports the regulatory goal of predictability.
    <bullet> Have timely development, testing, implementation, and
updating procedures to achieve administrative simplification benefits
faster. This principle establishes a performance objective for the
standard.
    <bullet> Be technologically independent of the computer platforms
and transmission protocols used in HIPAA health transactions, except
when they are explicitly part of the standard. This principle
establishes a performance objective for the standard and supports the
regulatory goal of flexibility.
    <bullet> Be precise and unambiguous but as simple as possible. This
principle supports the regulatory goals of predictability and
simplicity.
    <bullet> Keep data collection and paperwork burdens on users as low
as is feasible. This principle supports the regulatory goals of cost-
effectiveness and avoidance of duplication and burden.
    <bullet> Incorporate flexibility to adapt more easily to changes in
the health care infrastructure (such as new services, organizations,
and provider types) and information technology. This principle supports
the regulatory goals of flexibility and encouragement of innovation.
    We assessed a wide variety of security standards, guidelines and
electronic signature standards against the principles listed above,
with the overall goal of achieving the maximum benefit for the least
cost. We found that there exists no single standard for security or
electronic signature that encompasses all the requirements that have
been deemed necessary. However, in this particular area, technology is
rapidly developing enhancements and better means for accomplishing the
stated goals.

D. Affected Entities

1. Health Care Providers
    Health care providers that conduct business using electronic
transactions with other health care participants (such as other health
care providers, health plans, and employers) or maintain electronic
health information are encouraged, but are not required to
simultaneously implement the proposed security standard. However, if
the effective date for the electronic transaction standards is later
than the effective date for the security standard, the implementation
of the security standard will not be delayed until the standard
transactions are in use.
    Health care providers that transmit, receive, or maintain health
information would incur implementation costs for establishing or
updating their security systems. Any negative impact on these health
care providers caused by implementing the proposed security standard
would generally be related to the initial implementation period for the
specific requirements of the security standard. Health care providers
that are indirectly involved in electronic transactions (for example,
those who submit a paper claim that the health plan transmits
electronically to a secondary payer) and do not maintain electronic
health information would not be affected.
2. Health Plans
    Health plans that engage in electronic health care transactions
would have to modify their systems to use the security standard and the
electronic signature standard, if used. Health plans that maintain
electronic health information would also have to modify their systems
to use the security standard. This conversion would have a one-time
cost impact on Federal, State and private plans alike.
    We recognize that this conversion process has the potential to
cause business disruption of some health plans. However, health plans
would be able to schedule their implementation of the security standard
and other standards in a way that best fits their needs, as long as
they meet the deadlines specified in the law.
    Implementation of the security standard and the electronic
signature standard, if used by the entities, would enhance payment
safeguard activities and protect the integrity of the Medicare trust
fund by reducing fraud and abuse that occurs when health care
information is used by those who are not authorized to receive it. In
addition these standards would assist the plans, providers, and
clearinghouses to more effectively maintain the security of all health
information in their databases.
3. Clearinghouses
    Health care clearinghouses would face impacts similar to those
experienced by health care providers and health plans. Systems vendors,
that provide computer software applications to health care providers
and other billers of health care services, would likely be positively
affected. These vendors would have to develop software solutions that
would allow health care providers and other billers of health care
transactions to protect the information in their databases from
unwanted access to their systems.
4. Unfunded Mandates
    This proposed rule has been reviewed in accordance with the
Unfunded Mandates Reform Act of 1995 (UMRA) (U.S.C. 1501 et seq.) and
Executive Order 12875. As discussed in the combined impact analysis
referenced above (see Federal Register, Volume 63, No. 88), DHHS
estimates that implementation of the standards will require the
expenditure of more than $100 million by the private sector. Therefore,
the rule establishes a Federal private sector mandate and is a
significant regulatory action within the meaning of section 202 of UMRA
(2 U.S.C. 1532). DHHS has included this statement to address the
anticipated effects of the proposed rules pursuant to section 202.
    These standards also apply to State and local governments in their
roles as health plans or health care providers. Thus, the proposed
rules impose unfunded mandates on these entities. While we do not have
sufficient information to provide estimates of these impacts, several
State Medicaid agencies have estimated that it would cost $1 million
per State to implement

[[Page 43262]]

all of the HIPAA standards. However, the Congressional Budget Office
analysis stated that ``States are already in the forefront in
administering the Medicaid program electronically; the only costs--
which should not be significant--would involve bringing the software
and computer systems for the Medicaid programs into compliance with the
new standards.''
    The anticipated benefits and costs of this proposed standard, and
other issues raised in section 202 of the UMRA, are addressed in the
analysis below, and in the combined impact analysis. In addition, under
section 205 of the UMRA (2 U.S.C. 1535), having considered a reasonable
number of alternatives as outlined in the preamble to this rule and in
the following analysis, the Department has concluded that the rule is
the most cost-effective alternative for implementation of DHHS''
statutory objective of administrative simplification.
5. Regulatory Flexibility Act
    The Regulatory Flexibility Act (RFA) of 1980, Public Law 96-354,
requires us to prepare a regulatory flexibility analysis if the
Secretary certifies that a proposed regulation would have a significant
economic impact on a substantial number of small entities. The security
and electronic signature standards will affect small entities, such as
providers. A more detailed analysis of the impact on small entities is
part of the impact analysis we published on May 7, 1998 (63 FR 25320)
for all the HIPAA standards. A detailed illustration of the potential
impact of the security standard on a small health care provider can be
found in the preamble in section D.

E. Factors in Establishing the Security Standard

1. Selection of Security Systems and Procedures
    Because there is no national security standard in widespread use
throughout the industry, adopting any of the candidate standards would
require most health care providers, health plans and health care
clearinghouses to conform to the new standard. Implementation of the
security standard would require all health plans, health care
providers, and health care clearinghouses to establish or revise their
security precautions because the proposed standard is not currently in
use. The selection of the security standard does not impose a greater
burden on the industry than the nonselected options, and presents
significant advantages in terms of universality, uniqueness and
flexibility.
    Only those plans, providers, and clearinghouses that decide to use
the digital signature would be affected by the electronic signature
standard. Some large health plans, health care providers, and health
care clearinghouses that currently exchange health information among
trading partners may have security systems and procedures in place to
protect the information from unauthorized access. These entities may
not incur significant costs to meet the proposed security standard and
if they opt not to use the digital signature they would not incur costs
to meet the electronic signature requirements. Also, some entities that
currently use electronic signatures as an added security measure may
also be using digital signature technology. At most, large entities
that may have sophisticated security systems in place may only need to
revise or update their systems to meet the proposed security standard
and electronic signature standard.
2. Complexity of Conversion
    The complexity of the conversion would be significantly affected by
the volume of claims health plans process electronically and the desire
to transmit the claims themselves or to use the services of a VAN or a
clearinghouse. If they chose to transmit themselves, they would need to
convert to the proposed transaction standards. Specific technology
limitations of existing systems could affect the complexity of the
conversion. For example, some entities may only have a minimum level of
security and procedures in place and therefore may require a full
upgrade, while others may already have a very sophisticated system and
procedures and require very little enhancement.
3. Cost of Conversion
    We expect that most providers, health plans, and clearinghouses
that transmit or store data electronically have already implemented
some security measures and will primarily need to assess existing
security, identify areas of risk, and implement additional measures. We
cannot estimate the per-entity cost of implementation because there is
no information available regarding the extent to which providers',
plans', and clearinghouses' current security practices are deficient.
Moreover, some security solutions are almost cost-free to implement
(e.g., reminding employees not to post passwords on their monitors)
while others are not.
    Affected entities will have many choices regarding how they will
implement security. Some may choose to assess security using in-house
staff, while others will utilize consultants. Practice management
software vendors may also provide security consultation services to
their customers. Entities may also choose to implement security
measures that require hardware or software purchases at the time they
do routine equipment upgrades.
    The security requirements we are proposing were developed with
considerable input from the health care industry, including providers,
health plans, clearinghouses, vendors, and standards organizations.
Industry members strongly advocated this flexible approach, which
permits each affected entity to develop cost-effective security
measures. We believe that this approach will yield the lowest
implementation cost to industry while assuring that health information
is safeguarded. We solicit input regarding implementation costs.
    We are unable to estimate, of the nation's 4 million-plus health
plans and 1.2 million-plus providers, the number of entities that would
require security systems and procedures because they conduct electronic
transactions or maintain electronic health information. Nor are we able
to estimate the number of entities that neither conduct electronic
transactions nor maintain electronic health information but may choose
to do so at some future time. (These would be entities that send and
receive paper transactions and maintain paper records and thus would
not be affected because they would have no need to implement security
standards.) However, we are aware of the possibility that those small
entities that currently process claims electronically or maintain
electronic health information may not be able to continue to do so due
to the cost of establishing security systems to meet the requirements
of the proposed security standard. Those entities that are not able to
bill and exchange health information electronically may use
clearinghouses. We believe that the proposed security standard
represents the minimum necessary for adequate protection of health
information in an electronic format. As discussed earlier in this
preamble, the security requirements are both scalable and technically
flexible; and while the law requires each health plan that is not a
small plan to comply with the security and electronic signature
requirements no later than 24 months after the effective date of the
final rule, small plans will be allowed an additional 12 months to
comply.
    Since we are unable to estimate the number of entities, we are also
unable to estimate the cost to the entities that will process
electronic transactions.

[[Page 43263]]

However, we believe that the cost of establishing security systems and
procedures is a portion of the costs associated with converting to the
transaction standards that are required under HIPAA.
    This discussion on conversion costs relates only to health plans,
health care providers, and health care clearinghouses that are required
to follow the security standard to maintain, transmit or receive
electronic health information. Other entities would not be required to
follow the security standard and procedures until they choose to
maintain, transmit, or receive electronic health information. The cost
of establishing security systems and procedures for entities that do
not transmit, receive or maintain health information electronically is
not included in our estimates.

VII. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
    <bullet> The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our estimate of the information collection
burden.
    <bullet> The quality, utility, and clarity of the information to be
collected.
    <bullet> Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
    As discussed below, we are soliciting comment on the recordkeeping
requirements, as referenced in Sec. 142.308 of this document. In
addition, we are soliciting comment on the applicability of the PRA as
it may relate to the requirement to use the standard adopted in
Sec. 142.310 of this regulation.

Section 142.308  Security Standard

    In summary, each entity designated in Sec. 142.302 must maintain
documentation demonstrating the development, implementation, and
maintenance of appropriate security measures that include, at a
minimum, the requirements and implementation features set forth in this
section. In addition, entities must maintain necessary documentation to
demonstrate that these measures have been periodically reviewed,
validated, updated, and kept current.
    While we solicit comment on these recordkeeping requirements we
explicitly solicit comment on the burden associated with maintaining
documentation related to the implementation the requirements set forth
in Sec. 142.308. Since the level of documentation necessary to
demonstrate compliance with these requirements is dependent upon
individual business needs and the fact that we do not prescribe the
form, format, or degree of documentation necessary to demonstrate
compliance, we are currently unable to accurately estimate the degree
of recordkeeping burden that will be experienced by the varying
entities. Therefore, commentors should provide an estimate of: (1) the
initial recordkeeping burden associated with meeting these requirements
and (2) the recordkeeping burden associated with maintaining
documentation to demonstrate that the measures have been periodically
reviewed, validated, updated, and kept current.
    Below is a discussion of the applicability of the PRA as it may
relate to the adoption of the standard referenced in Sec. 142.310 of
this regulation.

Section 142.310  Electronic Signature Standard

    In summary, any entity electing to use an electronic signature in a
transaction as defined in Sec. 142.103, or if an electronic signature
is required by a transaction standard adopted by the Secretary, the
entity must apply the electronic signature standard described in
paragraph (b) of this section to that transaction.
Discussion
    The emerging and increasing use of health care EDI standards and
transactions raises the issue of the applicability of the PRA. The
question arises whether a regulation that adopts an EDI standard used
to exchange certain information constitutes an information collection
subject to the PRA.
    In particular, we are still considering whether the use of any EDI
transaction standard, such as the electronic signature described in
this regulation, should be viewed or regarded as a standardized
electronic collection of information. If it is a standardized
electronic information collection, then the requirement by the Federal
government on the industry to accept and transmit the information may
be subject to OMB review and approval under the PRA.
    We invite public comment on the issues discussed above. If the
requirements, as set forth in Sec. 142.310 are determined to be subject
to the PRA, we will submit these requirements to OMB for PRA approval.
If you comment on these information collection and recordkeeping
requirements, please e-mail comments to JBurke1@hcfa.gov (Attn: HCFA-
0049) or mail copies directly to the following:

Health Care Financing Administration, Office of Information Services,
Security and Standards Group, Division of HCFA Enterprise Standards,
Room N2-14-26, 7500 Security Boulevard, Baltimore, MD 21244-1850. Attn:
John Burke HCFA-0049, HCFA Reports Clearance Officer
And
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attn: Allison Herron Eydt, HCFA Desk Officer

List of Subjects in 45 CFR Part 142

    Administrative practice and procedure, Health facilities, Health
insurance, Hospitals, Medicaid, Medicare, Report and recordkeeping
requirement.

    45 CFR subtitle A, subchapter B, would be amended by adding part 42
to read as follows:

    Note to Reader: This proposed rule is one of several proposed
rules that are being published to implement the administrative
simplification provisions of the Health Insurance Portability and
Accountability Act of 1996. We propose to establish a new 45 CFR
Part 142. Proposed Subpart A--General Provisions is exactly the same
in each rule unless we have added new sections or definitions to
incorporate additional general information. The subparts that follow
relate to the specific provisions announced separately in each
proposed rule. When we publish the first final rule, each subsequent
final rule will revise or add to the text that is set out in the
first final rule.

PART 142--ADMINISTRATIVE REQUIREMENTS

Subpart A--General Provisions

Sec.
142.101  Statutory basis and purpose.
142.102  Applicability.
142.103  Definitions.
142.104  General requirements for health plans.
142.105  Compliance using a health care clearinghouse.
142.106  Effective dates of a modification to a standard or
implementation specification.

[[Page 43264]]

Subpart B--Reserved

Subpart C--Security and Electronic Signature Standards

Sec.
142.302  Applicability and scope.
142.304  Definitions.
142.306  Rules for the security standard.
142.308  Security standard.
142.310  Electronic signature standard.
142.312  Effective date of the initial implementation of the
security and electronic standards.

    Authority: Sections 1173 and 1175 of the Social Security Act (42
U.S.C. 1320d-2 and 1320d-4).

Subpart A--General Provisions

Sec. 142.101  Statutory basis and purpose.

    Sections 1171 through 1179 of the Social Security Act, 42 U.S.C.
1320d, as added by section 262 of the Health Insurance Portability and
Accountability Act of 1996, require HHS to adopt national standards for
the electronic exchange of health information in the health care
system. The purpose of the sections of this part is to promote
administrative simplification.

Sec. 142.102  Applicability.

    (a) The standards adopted or designated under this part apply, in
whole or in part, to the following:
    (1) A health plan.
    (2) A health care clearinghouse when doing the following:
    (i) Transmitting a standard transaction (as defined in
Sec. 142.103) to a health care provider or health plan.
    (ii) Receiving a standard transaction from a health care provider
or health plan.
    (iii) Transmitting and receiving the standard transactions when
interacting with another health care clearinghouse.
    (3) A health care provider when transmitting an electronic
transaction as defined in Sec. 142.103.
    (b) Means of compliance are stated in greater detail in
Sec. 142.105.

Sec. 142.103  Definitions.

    For purposes of this part, the following definitions apply:
    Code set means any set of codes used for encoding data elements,
such as tables of terms, medical concepts, medical diagnostic codes, or
medical procedure codes.
    Health care clearinghouse means a public or private entity that
processes or facilitates the processing of nonstandard data elements of
health information into standard data elements. The entity receives
health care transactions from health care providers or other entities,
translates the data from a given format into one acceptable to the
intended payer or payers, and forwards the processed transaction to
appropriate payers and clearinghouses. Billing services, repricing
companies, community health management information systems, community
health information systems, and ``value-added'' networks and switches
are considered to be health care clearinghouses for purposes of this
part.
    Health care provider means a provider of services as defined in
section 1861(u) of the Social Security Act, 42 U.S.C. 1395x, a provider
of medical or other health services as defined in section 1861(s) of
the Social Security Act, and any other person who furnishes or bills
and is paid for health care services or supplies in the normal course
of business.
    Health information means any information, whether oral or recorded
in any form or medium, that--
    (1) Is created or received by a health care provider, health plan,
public health authority, employer, life insurer, school or university,
or health care clearinghouse; and
    (2) Relates to the past, present, or future physical or mental
health or condition of an individual, the provision of health care to
an individual, or the past, present, or future payment for the
provision of health care to an individual.
    Health plan means an individual or group plan that provides, or
pays the cost of, medical care. Health plan includes the following,
singly or in combination:
    (1) Group health plan. A group health plan is an employee welfare
benefit plan (as currently defined in section 3(1) of the Employee
Retirement Income and Security Act of 1974, 29 U.S.C. 1002(1)),
including insured and self-insured plans, to the extent that the plan
provides medical care, including items and services paid for as medical
care, to employees or their dependents directly or through insurance,
or otherwise, and--
    (i) Has 50 or more participants; or
    (ii) Is administered by an entity other than the employer that
established and maintains the plan.
    (2) Health insurance issuer. A health insurance issuer is an
insurance company, insurance service, or insurance organization that is
licensed to engage in the business of insurance in a State and is
subject to State law that regulates insurance.
    (3) Health maintenance organization. A health maintenance
organization is a Federally qualified health maintenance organization,
an organization recognized as a health maintenance organization under
State law, or a similar organization regulated for solvency under State
law in the same manner and to the same extent as such a health
maintenance organization.
    (4) Part A or Part B of the Medicare program under title XVIII of
the Social Security Act.
    (5) The Medicaid program under title XIX of the Social Security
Act.
    (6) A Medicare supplemental policy (as defined in section
1882(g)(1) of the Social Security Act, 42 U.S.C. 1395ss).
    (7) A long-term care policy, including a nursing home fixed-
indemnity policy.
    (8) An employee welfare benefit plan or any other arrangement that
is established or maintained for the purpose of offering or providing
health benefits to the employees of two or more employers.
    (9) The health care program for active military personnel under
title 10 of the United States Code.
    (10) The veterans health care program under 38 U.S.C. chapter 17.
    (11) The Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS), as defined in 10 U.S.C. 1072(4).
    (12) The Indian Health Service program under the Indian Health Care
Improvement Act (25 U.S.C. 1601 et seq.).
    (13) The Federal Employees Health Benefits Program under 5 U.S.C.
chapter 89.
    (14) Any other individual or group health plan, or combination
thereof, that provides or pays for the cost of medical care.
    Medical care means the diagnosis, cure, mitigation, treatment, or
prevention of disease, or amounts paid for the purpose of affecting any
body structure or function of the body; amounts paid for transportation
primarily for and essential to these items; and amounts paid for
insurance covering the items and the transportation specified in this
definition.
    Participant means any employee or former employee of an employer,
or any member or former member of an employee organization, who is or
may become eligible to receive a benefit of any type from an employee
benefit plan that covers employees of that employer or members of such
an organization, or whose beneficiaries may be eligible to receive any
of these benefits. ``Employee'' includes an individual who is treated
as an employee under section 401(c)(1) of the Internal Revenue Code of
1986 (26 U.S.C. 401(c)(1)).
    Small health plan means a group health plan or individual health
plan with fewer than 50 participants.

[[Page 43265]]

    Standard means a set of rules for a set of codes, data elements,
transactions, or identifiers promulgated either by an organization
accredited by the American National Standards Institute or HHS for the
electronic transmission of health information.
    Transaction means the exchange of information between two parties
to carry out financial and administrative activities related to health
care. It includes the following:
    (1) Health claims or equivalent encounter information.
    (2) Health care payment and remittance advice.
    (3) Coordination of benefits.
    (4) Health claims status.
    (5) Enrollment and disenrollment in a health plan.
    (6) Eligibility for a health plan.
    (7) Health plan premium payments.
    (8) Referral certification and authorization.
    (9) First report of injury.
    (10) Health claims attachments.
    (11) Other transactions as the Secretary may prescribe by
regulation.

Sec. 142.104  General requirements for health plans.

    If a person conducts a transaction (as defined in Sec. 142.103)
with a health plan as a standard transaction, the following apply:
    (a) The health plan may not refuse to conduct the transaction as a
standard transaction.
    (b) The health plan may not delay the transaction or otherwise
adversely affect, or attempt to adversely affect, the person or the
transaction on the ground that the transaction is a standard
transaction.
    (c) The health information transmitted and received in connection
with the transaction must be in the form of standard data elements of
health information.
    (d) A health plan that conducts transactions through an agent must
assure that the agent meets all the requirements of this part that
apply to the health plan.

Sec. 142.105  Compliance using a health care clearinghouse.

    (a) Any person or other entity subject to the requirements of this
part may meet the requirements to accept and transmit standard
transactions by either--
    (1) Transmitting and receiving standard data elements; or
    (2) Submitting nonstandard data elements to a health care
clearinghouse for processing into standard data elements and
transmission by the health care clearinghouse and receiving standard
data elements through the health care clearinghouse.
    (b) The transmission, under contract, of nonstandard data elements
between a health plan or a health care provider and its agent health
care clearinghouse is not a violation of the requirements of this part.

Sec. 142.106  Effective dates of a modification to a standard or
implementation specification.

    HHS may modify a standard or implementation specification after the
first year in which HHS requires the standard or implementation
specification to be used, but not more frequently than once every 12
months. If HHS adopts a modification to a standard or implementation
specification, the implementation date of the modified standard or
implementation specification may be no earlier than 180 days following
the adoption of the modification. HHS determines the actual date,
taking into account the time needed to comply due to the nature and
extent of the modification. HHS may extend the time for compliance for
small health plans.

Subpart B--[Reserved]

Subpart C--Security and Electronic Signature Standards

Sec. 142.302  Applicability and scope.

    The standards adopted or designated under this subpart apply, in
whole or in part, to the following:
    (a) A health plan.
    (b) A health care clearinghouse or health care provider that takes
one of the following actions:
    (1) Processes any electronic transmission between any combination
of health care entities listed in this section.
    (2) Electronically maintains any health information used in an
electronic transmission that has been sent or received between any
combination of health care entities listed in this section.

Sec. 142.304  Definitions.

    For purposes of this subpart, the following definitions apply:
    Access refers to the ability or the means necessary to read, write,
modify, or communicate data/information or otherwise make use of any
system resource.
    Access control refers to a method of restricting access to
resources, allowing only privileged entities access. Types of access
control include, among others, mandatory access control, discretionary
access control, time-of-day, and classification.
    Authentication refers to the corroboration that an entity is the
one claimed.
    Contingency plan refers to a plan for responding to a system
emergency. The plan includes performing backups, preparing critical
facilities that can be used to facilitate continuity of operations in
the event of an emergency, and recovering from a disaster.
    Encryption (or encipherment) refers to transforming confidential
plaintext into ciphertext to protect it. An encryption algorithm
combines plaintext with other values called keys, or ciphers, so the
data becomes unintelligible. Once encrypted, data can be stored or
transmitted over unsecured lines. Decrypting data reverses the
encryption algorithm process and makes the plaintext available for
further processing.
    Password refers to confidential authentication information composed
of a string of characters.
    Role-based access control (RBAC) is an alternative to traditional
access control models (e.g., discretionary or non-discretionary access
control policies) that permits the specification and enforcement of
enterprise-specific security policies in a way that maps more naturally
to an organization's structure and business activities. With RBAC,
rather than attempting to map an organization's security policy to a
relatively low-level set of technical controls (typically, access
control lists), each user is assigned to one or more predefined roles,
each of which has been assigned the various privileges needed to
perform that role.
    Token refers to a physical item necessary for user identification
when used in the context of authentication. For example, an electronic
device that can be inserted in a door or a computer system to obtain
access.
    User-based access refers to a security mechanism used to grant
users of a system access based upon the identity of the user.

Sec. 142.306  Rules for the security standard.

    (a) An entity must apply the security standard described in
Sec. 142.308 to all health information pertaining to an individual that
is electronically maintained or electronically transmitted.
    (b) If a health care clearinghouse is part of a larger
organization, it must assure that all health information pertaining to
an individual is protected from unauthorized access by the larger
organization.

[[Page 43266]]

Sec. 142.308  Security standard.

    Each entity designated in Sec. 142.302 must assess potential risks
and vulnerabilities to the individual health data in its possession and
develop, implement, and maintain appropriate security measures. These
measures must be documented and kept current, and must include, at a
minimum, the following requirements and implementation features:
    (a) Administrative procedures to guard data integrity,
confidentiality, and availability (documented, formal practices to
manage the selection and execution of security measures to protect
data, and to manage the conduct of personnel in relation to the
protection of data). These procedures include the following
requirements:
    (1) Certification. (The technical evaluation performed as part of,
and in support of, the accreditation process that establishes the
extent to which a particular computer system or network design and
implementation meet a pre-specified set of security requirements. This
evaluation may be performed internally or by an external accrediting
agency.)
    (2) A chain of trust partner agreement (a contract entered into by
two business partners in which the partners agree to electronically
exchange data and protect the integrity and confidentiality of the data
exchanged).
    (3) A contingency plan, a routinely updated plan for responding to
a system emergency, that includes performing backups, preparing
critical facilities that can be used to facilitate continuity of
operations in the event of an emergency, and recovering from a
disaster. The plan must include all of the following implementation
features:
    (i) An applications and data criticality analysis (an entity's
formal assessment of the sensitivity, vulnerabilities, and security of
its programs and information it receives, manipulates, stores, and/or
transmits).
    (ii) Data backup plan (a documented and routinely updated plan to
create and maintain, for a specific period of time, retrievable exact
copies of information).
    (iii) A disaster recovery plan (the part of an overall contingency
plan that contains a process enabling an enterprise to restore any loss
of data in the event of fire, vandalism, natural disaster, or system
failure).
    (iv) Emergency mode operation plan (the part of an overall
contingency plan that contains a process enabling an enterprise to
continue to operate in the event of fire, vandalism, natural disaster,
or system failure).
    (v) Testing and revision procedures (the documented process of
periodic testing of written contingency plans to discover weaknesses
and the subsequent process of revising the documentation, if
necessary).
    (4) Formal mechanism for processing records (documented policies
and procedures for the routine, and nonroutine, receipt, manipulation,
storage, dissemination, transmission, and/or disposal of health
information).
    (5) Information access control (formal, documented policies and
procedures for granting different levels of access to health care
information) that includes all of the following implementation
features:
    (i) Access authorization (information-use policies and procedures
that establish the rules for granting access, (for example, to a
terminal, transaction, program, process, or some other user.)
    (ii) Access establishment (security policies and rules that
determine an entity's initial right of access to a terminal,
transaction, program, process or some other user).
    (iii) Access modification (security policies and rules that
determine the types of, and reasons for, modification to an entity's
established right of access, to a terminal, transaction, program,
process, or some other user.)
    (6) Internal audit (in-house review of the records of system
activity (such as logins, file accesses, and security incidents)
maintained by an organization).
    (7) Personnel security (all personnel who have access to any
sensitive information have the required authorities as well as all
appropriate clearances) that includes all of the following
implementation features:
    (i) Assuring supervision of maintenance personnel by an authorized,
knowledgeable person. These procedures are documented formal procedures
and instructions for the oversight of maintenance personnel when the
personnel are near health information pertaining to an individual.
    (ii) Maintaining a record of access authorizations (ongoing
documentation and review of the levels of access granted to a user,
program, or procedure accessing health information).
    (iii) Assuring that operating and maintenance personnel have proper
access authorization (formal documented policies and procedures for
determining the access level to be granted to individuals working on,
or near, health information).
    (iv) Establishing personnel clearance procedures (a protective
measure applied to determine that an individual's access to sensitive
unclassified automated information is admissible).
    (v) Establishing and maintaining personnel security policies and
procedures (formal, documentation of procedures to ensure that all
personnel who have access to sensitive information have the required
authority as well as appropriate clearances).
    (vi) Assuring that system users, including maintenance personnel,
receive security awareness training.
    (8) Security configuration management (measures, practices, and
procedures for the security of information systems that must be
coordinated and integrated with each other and other measures,
practices, and procedures of the organization established in order to
create a coherent system of security) that includes all of the
following implementation features:
    (i) Documentation (written security plans, rules, procedures, and
instructions concerning all components of an entity's security).
    (ii) Hardware and software installation and maintenance review and
testing for security features (formal, documented procedures for
connecting and loading new equipment and programs, periodic review of
the maintenance occurring on that equipment and programs, and periodic
security testing of the security attributes of that hardware/software).
    (iii) Inventory (the formal, documented identification of hardware
and software assets).
    (iv) Security testing (process used to determine that the security
features of a system are implemented as designed and that they are
adequate for a proposed applications environment; this process includes
hands-on functional testing, penetration testing, and verification).
    (v) Virus checking. (The act of running a computer program that
identifies and disables:
    (A) Another ``virus'' computer program, typically hidden, that
attaches itself to other programs and has the ability to replicate.
    (B) A code fragment (not an independent program) that reproduces by
attaching to another program.
    (C) A code embedded within a program that causes a copy of itself
to be inserted in one or more other programs.)
    (9) Security incident procedures (formal documented instructions
for reporting security breaches) that include all of the following
implementation features:
    (i) Report procedures (documented formal mechanism employed to
document security incidents).

[[Page 43267]]

    (ii) Response procedures (documented formal rules or instructions
for actions to be taken as a result of the receipt of a security
incident report).
    (10) Security management process (creation, administration, and
oversight of policies to ensure the prevention, detection, containment,
and correction of security breaches involving risk analysis and risk
management). It includes the establishment of accountability,
management controls (policies and education), electronic controls,
physical security, and penalties for the abuse and misuse of its assets
(both physical and electronic) that includes all of the following
implementation features:
    (i) Risk analysis, a process whereby cost-effective security/
control measures may be selected by balancing the costs of various
security/control measures against the losses that would be expected if
these measures were not in place.
    (ii) Risk management (process of assessing risk, taking steps to
reduce risk to an acceptable level, and maintaining that level of
risk).
    (iii) Sanction policies and procedures (statements regarding
disciplinary actions that are communicated to all employees, agents,
and contractors; for example, verbal warning, notice of disciplinary
action placed in personnel files, removal of system privileges,
termination of employment, and contract penalties). They must include
employee, agent, and contractor notice of civil or criminal penalties
for misuse or misappropriation of health information and must make
employees, agents, and contractors aware that violations may result in
notification to law enforcement officials and regulatory,
accreditation, and licensure organizations.
    (iv) Security policy (statement(s) of information values,
protection responsibilities, and organization commitment for a system).
This is the framework within which an entity establishes needed levels
of information security to achieve the desired confidentiality goals.
    (11) Termination procedures (formal documented instructions, which
include appropriate security measures, for the ending of an employee's
employment or an internal/external user's access) that include
procedures for all of the following implementation features:
    (i) Changing locks (a documented procedure for changing
combinations of locking mechanisms, both on a recurring basis and when
personnel knowledgeable of combinations no longer have a need to know
or require access to the protected facility or system).
    (ii) Removal from access lists (physical eradication of an entity's
access privileges).
    (iii) Removal of user account(s) (termination or deletion of an
individual's access privileges to the information, services, and
resources for which they currently have clearance, authorization, and
need-to-know when such clearance, authorization and need-to-know no
longer exists).
    (iv) Turning in of keys, tokens, or cards that allow access
(formal, documented procedure to ensure all physical items that allow a
terminated employee to access a property, building, or equipment are
retrieved from that employee, preferably before termination).
    (12) Training (education concerning the vulnerabilities of the
health information in an entity's possession and ways to ensure the
protection of that information) that includes all of the following
implementation features:
    (i) Awareness training for all personnel, including management
personnel (in security awareness, including, but not limited to,
password maintenance, incident reporting, and viruses and other forms
of malicious software).
    (ii) Periodic security reminders (employees, agents, and
contractors are made aware of security concerns on an ongoing basis).
    (iii) User education concerning virus protection (training relative
to user awareness of the potential harm that can be caused by a virus,
how to prevent the introduction of a virus to a computer system, and
what to do if a virus is detected).
    (iv) User education in importance of monitoring log-in success or
failure and how to report discrepancies (training in the user's
responsibility to ensure the security of health care information).
    (v) User education in password management (type of user training in
the rules to be followed in creating and changing passwords and the
need to keep them confidential).
    (b) Physical safeguards to guard data integrity, confidentiality,
and availability. Protection of physical computer systems and related
buildings and equipment from fire and other natural and environmental
hazards, as well as from intrusion. It covers the use of locks, keys,
and administrative measures used to control access to computer systems
and facilities. Physical safeguards must include all of the following
requirements and implementation features:
    (1) Assigned security responsibility (practices established by
management to manage and supervise the execution and use of security
measures to protect data and to manage and supervise the conduct of
personnel in relation to the protection of data).
    (2) Media controls (formal, documented policies and procedures that
govern the receipt and removal of hardware/software (such as diskettes
and tapes) into and out of a facility) that include all of the
following implementation features:
    (i) Access control.
    (ii) Accountability (the property that ensures that the actions of
an entity can be traced uniquely to that entity).
    (iii) Data backup (a retrievable, exact copy of information).
    (iv) Data storage (the retention of health care information
pertaining to an individual in an electronic format).
    (v) Disposal (final disposition of electronic data, and/or the
hardware on which electronic data is stored).
    (3) Physical access controls (limited access) (formal, documented
policies and procedures to be followed to limit physical access to an
entity while ensuring that properly authorized access is allowed) that
include all of the following implementation features:
    (i) Disaster recovery (the process enabling an entity to restore
any loss of data in the event of fire, vandalism, natural disaster, or
system failure).
    (ii) An emergency mode operation (access controls in place that
enable an entity to continue to operate in the event of fire,
vandalism, natural disaster, or system failure).
    (iii) Equipment control (into and out of site) (documented security
procedures for bringing hardware and software into and out of a
facility and for maintaining a record of that equipment. This includes,
but is not limited to, the marking, handling, and disposal of hardware
and storage media.)
    (iv) A facility security plan (a plan to safeguard the premises and
building (exterior and interior) from unauthorized physical access and
to safeguard the equipment therein from unauthorized physical access,
tampering, and theft).
    (v) Procedures for verifying access authorizations before granting
physical access (formal, documented policies and instructions for
validating the access privileges of an entity before granting those
privileges).
    (vi) Maintenance records (documentation of repairs and
modifications to the physical components of a facility, such as

[[Page 43268]]

hardware, software, walls, doors, and locks).
    (vii) Need-to-know procedures for personnel access (a security
principle stating that a user should have access only to the data he or
she needs to perform a particular function).
    (viii) Procedures to sign in visitors and provide escorts, if
appropriate (formal documented procedure governing the reception and
hosting of visitors).
    (ix) Testing and revision (the restriction of program testing and
revision to formally authorized personnel).
    (4) Policy and guidelines on work station use (documented
instructions/procedures delineating the proper functions to be
performed, the manner in which those functions are to be performed, and
the physical attributes of the surroundings of a specific computer
terminal site or type of site, dependent upon the sensitivity of the
information accessed from that site).
    (5) A secure work station location (physical safeguards to
eliminate or minimize the possibility of unauthorized access to
information; for example, locating a terminal used to access sensitive
information in a locked room and restricting access to that room to
authorized personnel, not placing a terminal used to access patient
information in any area of a doctor's office where the screen contents
can be viewed from the reception area).
    (6) Security awareness training (information security awareness
training programs in which all employees, agents, and contractors must
participate, including, based on job responsibilities, customized
education programs that focus on issues regarding use of health
information and responsibilities regarding confidentiality and
security).
    (c) Technical security services to guard data integrity,
confidentiality, and availability (the processes that are put in place
to protect information and to control individual access to
information). These services include the following requirements and
implementation features:
    (1) The technical security services must include all of the
following requirements and the specified implementation features:
    (i) Access control that includes:
    (A) A procedure for emergency access (documented instructions for
obtaining necessary information during a crisis), and
    (B) At least one of the following implementation features:
    (1) Context-based access (an access control procedure based on the
context of a transaction (as opposed to being based on attributes of
the initiator or target)).
    (2) Role-based access.
    (3) User-based access.
    (C) The optional use of encryption.
    (ii) Audit controls (mechanisms employed to record and examine
system activity).
    (iii) Authorization control (the mechanism for obtaining consent
for the use and disclosure of health information) that includes at
least one of the following implementation features:
    (A) Role-based access.
    (B) User-based access.
    (iv) Data authentication. (The corroboration that data has not been
altered or destroyed in an unauthorized manner. Examples of how data
corroboration may be assured include the use of a check sum, double
keying, a message authentication code, or digital signature.)
    (v) Entity authentication (the corroboration that an entity is the
one claimed) that includes:
    (A) Automatic logoff (a security procedure that causes an
electronic session to terminate after a predetermined time of
inactivity, such as 15 minutes), and
    (B) Unique user identifier (a combination name/number assigned and
maintained in security procedures for identifying and tracking
individual user identity).
    (C) At least one of the following implementation features:
    (1) Biometric identification (an identification system that
identifies a human from a measurement of a physical feature or
repeatable action of the individual (for example, hand geometry,
retinal scan, iris scan, fingerprint patterns, facial characteristics,
DNA sequence characteristics, voice prints, and hand written
signature)).
    (2) Password.
    (3) Personal identification number (PIN) (a number or code assigned
to an individual and used to provide verification of identity).
    (4) A telephone callback procedure (method of authenticating the
identity of the receiver and sender of information through a series of
``questions'' and ``answers'' sent back and forth establishing the
identity of each). For example, when the communicating systems exchange
a series of identification codes as part of the initiation of a session
to exchange information, or when a host computer disconnects the
initial session before the authentication is complete, and the host
calls the user back to establish a session at a predetermined telephone
number.
    (5) Token.
    (2) [Reserved]
    (d) Technical security mechanisms (processes that are put in place
to guard against unauthorized access to data that is transmitted over a
communications network).
    (1) If an entity uses communications or network controls, its
security standards for technical security mechanisms must include the
following:
    (i) The following implementation features:
    (A) Integrity controls (a security mechanism employed to ensure the
validity of the information being electronically transmitted or
stored).
    (B) Message authentication (ensuring, typically with a message
authentication code, that a message received (usually via a network)
matches the message sent).
    (ii) One of the following implementation features:
    (A) Access controls (protection of sensitive communications
transmissions over open or private networks so that they cannot be
easily intercepted and interpreted by parties other than the intended
recipient).
    (B) Encryption.
    (2) If an entity uses network controls (to protect sensitive
communication that is transmitted electronically over open networks so
that it cannot be easily intercepted and interpreted by parties other
than the intended recipient), its technical security mechanisms must
include all of the following implementation features:
    (i) Alarm. (In communication systems, any device that can sense an
abnormal condition within the system and provide, either locally or
remotely, a signal indicating the presence of the abnormality. The
signal may be in any desired form ranging from a simple contact closure
(or opening) to a time-phased automatic shutdown and restart cycle.)
    (ii) Audit trail (the data collected and potentially used to
facilitate a security audit).
    (iii) Entity authentication (a communications or network mechanism
to irrefutably identify authorized users, programs, and processes and
to deny access to unauthorized users, programs, and processes).
    (iv) Event reporting (a network message indicating operational
irregularities in physical elements of a network or a response to the
occurrence of a significant task, typically the completion of a request
for information).

Sec. 142.310  Electronic signature standard.

    (a) General rule. If an entity elects to use an electronic
signature in a

[[Page 43269]]

transaction as defined in Sec. 142.103, or if an electronic signature
is required by a transaction standard adopted by the Secretary, the
entity must apply the electronic signature standard described in
paragraph (b) of this section to that transaction.
    (b) Standard.
    (1) An electronic signature is the attribute affixed to an
electronic document to bind it to a particular entity. An electronic
signature secures the user authentication (proof of claimed identity)
at the time the signature is generated; creates the logical
manifestation of signature (including the possibility for multiple
parties to sign a document and have the order of application recognized
and proven); supplies additional information such as time stamp and
signature purpose specific to that user; and ensures the integrity of
the signed document to enable transportability of data,
interoperability, independent verifiability, and continuity of
signature capability. Verifying a signature on a document verifies the
integrity of the document and associated attributes and verifies the
identity of the signer.
    (2) The standard for electronic signature is a digital signature. A
``digital signature'' is an electronic signature based upon
cryptographic methods of originator authentication, computed by using a
set of rules and a set of parameters so that the identity of the signer
and the integrity of the data can be verified.
    (c) Required implementation features. If an entity uses electronic
signatures, the signature method must assure all of the following
features:
    (1) Message integrity (the assurance of unaltered transmission and
receipt of a message from the sender to the intended recipient).
    (2) Nonrepudiation (strong and substantial evidence of the identity
of the signer of a message, and of message integrity, sufficient to
prevent a party from successfully denying the origin, submission, or
delivery of the message and the integrity of its contents).
    (3) User authentication (the provision of assurance of the claimed
identity of an entity).
    (d) Optional implementation features. If an entity uses electronic
signatures, the entity may also use, among others, any of the following
implementation features:
    (1) Ability to add attributes (one possible capability of a digital
signature technology; for example, the ability to add a time stamp as
part of a digital signature).
    (2) Continuity of signature capability (the concept that the public
verification of a signature must not compromise the ability of the
signer to apply additional secure signatures at a later date).
    (3) Countersignatures. (The capability to prove the order of
application of signatures. This is analogous to the normal business
practice of countersignatures, where a party signs a document that has
already been signed by another party.)
    (4) Independent verifiability (the capability to verify the
signature without the cooperation of the signer).
    (5) Interoperability (the applications used on either side of a
communication, between trading partners and/or between internal
components of an entity, are able to read and correctly interpret the
information communicated from one to the other).
    (6) Multiple signatures. (With this feature, multiple parties are
able to sign a document. Conceptually, multiple signatures are simply
appended to the document.)
    (7) Transportability of data (the ability of a signed document to
be transported over an insecure network to another system, while
maintaining the integrity of the document, including content,
signatures, signature attributes, and (if present) document
attributes).

Sec. 142.312  Effective date of the initial implementation of the
security and electronic signature standards.

    (a) General rules.
    (1) Except for a small health plan (defined at Sec. 142.103), each
entity designated in Sec. 142.302 must comply with the requirements of
this subpart by [24 months after the effective date of the final rule
in the Federal Register].
    (2) A delay in an effective date for using a standard transaction
described in this part does not delay the effective dates described in
paragraphs (a)(1) and (b) of this section.
    (3) The requirements of the security standard may be implemented
over time. Implementation must be completed by the applicable effective
date.
    (b) Small health plans. A small health plan must comply with the
requirements of this subpart by [36 months after the effective date of
the final rule in the Federal Register].

    Authority: Sections 1173 and 1175 of the Social Security Act (42
U.S.C. 1320d-2 and 1320d-4).

    Dated: July 15, 1998.
Donna E. Shalala,
Secretary.
    Note: The following appendix will not appear in the Code of
Federal Regulations.

Addendum 1

HIPAA Security Matrix

    Please Note: (1) While we have attempted to categorize security
requirements for ease of understanding and reading clarity, there
are overlapping areas on the matrix in which the same requirements
are restated in a slightly different context. (2) To ensure that no
Requirement or Implementation feature is considered more important
than another, this matrix has been presented, within each subject
area, in alphabetical order.

 Administrative Procedures To Guard Data Integrity, Confidentiality, and
                              Availability
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Certification
Chain of trust partner agreement
Contingency plan (all listed             Applications and data
 implementation features must be          criticality analysis.
 implemented).                           Data backup plan.
                                         Disaster recovery plan.
                                         Emergency mode operation plan.
                                         Testing and revision.
Formal mechanism for processing
 records.
Information access control (all listed   Access authorization.
 implementation features must be         Access establishment.
 implemented).                           Access modification.
Internal audit

[[Page 43270]]


Personnel security (all listed           Assure supervision of
 implementation features must be          maintenance personnel by
 implemented).                            authorized, knowledgeable
                                          person.
                                         Maintainance of record of
                                          access authorizations.
                                         Operating, and in some cases,
                                          maintenance personnel have
                                          proper access authorization.
                                         Personnel clearance procedure.
                                         Personnel security policy/
                                          procedure.
                                         System users, including
                                          maintenance personnel, trained
                                          in security.
Security configuration mgmt. (all        Documentation.
 listed implementation features must be  Hardware/software installation
 implemented).                            & maintenance review and
                                          testing for security features.
                                         Inventory.
                                         Security Testing.
                                         Virus checking.
Security incident procedures (all        Report procedures.
 listed implementation features must be  Response procedures.
 implemented).
Security management process (all listed  Risk analysis.
 implementation features must be         Risk management.
 implemented).                           Sanction policy.
                                         Security policy.
Termination procedures (all listed       Combination locks changed.
 implementation features must be         Removal from access lists.
 implemented).                           Removal of user account(s).
                                         Turn in keys, token or cards
                                          that allow access.
Training (all listed implementation      Awareness training for all
 features must be implemented).           personnel (including mgmt).
                                         Periodic security reminders.
                                         User education concerning virus
                                          protection.
                                         User education in importance of
                                          monitoring log in success/
                                          failure, and how to report
                                          discrepancies.
                                         User education in password
                                          management.
------------------------------------------------------------------------

    Physical Safeguards To Guard Data Integrity, Confidentiality, and
                              Availability
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Assigned security responsibility
Media controls (all listed               Access control.
 implementation features must be         Accountability (tracking
 implemented).                            mechanism).
                                         Data backup.
                                         Data storage.
                                         Disposal.
Physical access controls (limited        Disaster recovery.
 access) (all listed implementation      Emergency mode operation.
 features must be implemented).          Equipment control (into and out
                                          of site).
                                         Facility security plan.
                                         Procedures for verifying access
                                          authorizations prior to
                                          physical access.
                                         Maintenance records.
                                         Need-to-know procedures for
                                          personnel access.
                                         Sign-in for visitors and
                                          escort, if appropriate.
                                         Testing and revision.
Policy/guideline on work station use
Secure work station location
Security awareness training
------------------------------------------------------------------------

  Technical Security Services To Guard Data Integrity, Confidentiality,
                            and Availability
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Access control (The following            Context-based access.
 implementation feature must be          Encryption.
 implemented: Procedure for emergency    Procedure for emergency access.
 access. In addition, at least one of    Role-based access.
 the following three implementation      User-based access.
 features must be implemented: Context-
 based access, Roll-based access, User-
 based access. The use of Encryption is
 optional).
Audit controls
Authorization Control (At least one of   Role-based access.
 the listed implementation features      User-based access
 must be implemented).
Data Authentication

[[Page 43271]]


Entity Authentication (The following     Automatic logoff.
 implementation features must be         Biometric.
 implemented: Automatic logoff, Unique   Password.
 user identification. In addition, at    PIN.
 least one of the other listed           Telephone callback.
 implementation features must be         Token.
 implemented).                           Unique user identification.
------------------------------------------------------------------------

  Technical Security Mechanisms To Guard Against Unauthorized Access to
         Data That Is Transmitted Over a Communications Network
------------------------------------------------------------------------
                 Requirement                         Implementation
------------------------------------------------------------------------
Communications/network controls (The           Access controls.
 following implementation features must be     Alarm.
 implemented: Integrity controls, Message      Audit trail.
 authentication. If communications or          Encryption.
 networking is employed, one of the following  Entity authentication.
 implementation features must be implemented:  Event reporting.
 Access controls, Encryption. In addition, if  Integrity controls.
 using a network, the following four           Message authentication.
 implementation features must be implemented:
 Alarm, Audit trail, Entity authentication,
 Event reporting).
------------------------------------------------------------------------

                          Electronic Signature
------------------------------------------------------------------------
              Requirement                         Implementation
------------------------------------------------------------------------
Digital signature (If digital signature  Ability to add attributes.
 is employed, the following three        Continuity of signature
 implementation features must be          capability.
 implemented: Message integrity, Non-    Counter signatures.
 repudiation, User authentication.       Independent verifiability.
 Other implementation features are       Interoperability.
 optional).                              Message integrity.
                                         Multiple Signatures.
                                         Non-repudiation.
                                         Transportability.
                                         User authentication.
------------------------------------------------------------------------

Addendum 2--HIPAA Security and Electronic Signature Standards Glossary
of Terms

    Please Note:
    (1) While we have attempted to categorize security requirements
for ease of understanding and reading clarity, there are overlapping
areas on the matrix in which the same requirements are restated in a
slightly different context.
    (2) While not appearing on the matrix, a number of terms listed
below do appear in the glossary descriptions and have been supplied
for additional clarity:
    (3) The definitions provided in this document have been obtained
from multiple sources.

Ability to add attributes:
    One possible capability of a digital signature technology, for
example, the ability to add a time stamp as part of a digital
signature.
    Part of digital signature on the matrix.
Access:
    The ability or the means necessary to read, write, modify, or
communicate data/information or otherwise make use of any system
resource.
Access authorization:
    Information-use policies/procedures that establish the rules for
granting and/or restricting access to a user, terminal, transaction,
program, or process.
    Part of information access control on the matrix.
Access control:
    A method of restricting access to resources, allowing only
privileged entities access. (PGP, Inc.)
    Types of access control include, among others, mandatory access
control, discretionary access control, time-of-day, classification,
and subject-object separation.
    Part of Media Controls on the matrix.
    Part of technical security services to control and monitor
access to information on the matrix.
Access controls:
    The protection of sensitive communications transmissions over
open or private networks so that it cannot be easily intercepted and
interpreted by parties other than the intended recipient.
    Part of mechanisms to prevent unauthorized access to data that
is transmitted over a communications network on the matrix.
Access establishment:
    The security policies, and the rules established therein, that
determine an entity's initial right of access to a terminal,
transaction, program, or process.
    Part of information access control on the matrix.
Access Level:
    A level associated with an individual who may be accessing
information (for example, a clearance level) or with the information
which may be accessed (for example, a classification level). (NRC,
1991, as cited in HISB, DRAFT GLOSSARY OF TERMS RELATED TO
INFORMATION SECURITY IN HEALTH CARE INFORMATION SYSTEMS draft
Glossary of Terms Related to Information Security in Health Care
Information Systems)
Access modification:
    The security policies, and the rules established therein, that
determine types of, and reasons for, modification to an entity's
established right of access to a terminal, transaction, program, or
process.
    Part of information access control on the matrix.
Accountability:
    The property that ensures that the actions of an entity can be
traced uniquely to that entity. (ASTM E1762--95)

[[Page 43272]]

    Part of media controls on the matrix.
Administrative procedures to guard data integrity, confidentiality
and availability:
    Documented, formal practices to manage (1) the selection and
execution of security measures to protect data, and (2) the conduct
of personnel in relation to the protection of data.
    A section of the matrix.
Alarm, event reporting, and audit trail:
    (1) Alarm: In communication systems, any device that can sense
an abnormal condition within the system and provide, either locally
or remotely, a signal indicating the presence of the abnormality.
(188) NOTE: The signal may be in any desired form ranging from a
simple contact closure (or opening) to a time-phased automatic
shutdown and restart cycle. (Glossary of INFOSEC and INFOSEC Related
Terms--Idaho State University)
    (2) Event reporting: Network message indicating operational
irregularities in physical elements of a network or a response to
the occurrence of a significant task, typically the completion of a
request for information. (Glossary of INFOSEC and INFOSEC Related
Terms--Idaho State University)
    (3) Audit trail: Data collected and potentially used to
facilitate a security audit. (ISO 7498-2, as cited in HISB, DRAFT
GLOSSARY OF TERMS RELATED TO INFORMATION SECURITY IN HEALTH CARE
INFORMATION SYSTEMS draft Glossary of Terms Related to Information
Security in Health Care Information Systems)
    Part of mechanisms to prevent unauthorized access to data that
is transmitted over a communications network on the matrix.
Applications and data criticality analysis:
    An entity's formal assessment of the sensitivity,
vulnerabilities, and security of its programs and information it
receives, manipulates, stores, and/or transmits.
    Part of contingency plan on the matrix.
Assigned security responsibility:
    Practices put in place by management to manage and supervise (1)
the execution and use of security measures to protect data, and (2)
the conduct of personnel in relation to the protection of data.
    Part of Physical safeguards to guard data integrity,
confidentiality, and availability on the matrix.
Assure supervision of maintenance personnel by authorized,
knowledgeable person:
    Documented formal procedures/instruction for the oversight of
maintenance personnel when such personnel are in the vicinity of
health information pertaining to an individual.
    Part of personnel security on the matrix.
Asymmetric encryption:
    Encryption and decryption performed using two different keys,
one of which is referred to as the public key and one of which is
referred to as the private key.
    Also known as public-key encryption. (Stallings)
Asymmetric key:
    One half of a key pair used in an asymmetric (``public-key'')
encryption system. Asymmetric encryption systems have two important
properties: (1) the key used for encryption is different from the
one used for decryption (2) neither key can feasibly be derived from
the other. (CORBA Security Services, 1997)
Audit controls:
    The mechanisms employed to record and examine system activity.
    Part of technical security services to control and monitor
access to information on the matrix.
Authorization control:
    The mechanism for obtaining consent for the use and disclosure
of health information.
    Part of technical security services to control and monitor
access to information on the matrix.
Automatic logoff:
    After a pre-determined time of inactivity (for example, 15
minutes), an electronic session is terminated.
    Part of entity authentication on the matrix.
Availability:
    The property of being accessible and useable upon demand by an
authorized entity. (ISO 7498-2, as cited in the HISB draft Glossary
of Terms Related to Information Security In Health care Information
Systems)
Awareness training for all personnel (including management):
    All personnel in an organization should undergo security
awareness training, including, but not limited to, password
maintenance, incident reporting, and an education concerning viruses
and other forms of malicious software.
    Part of Training on the matrix.
Biometric:.
    A biometric identification system identifies a human from a
measurement of a physical feature or repeatable action of the
individual (for example, hand geometry, retinal scan, iris scan,
fingerprint patterns, facial characteristics, DNA sequence
characteristics, voice prints, and hand written signature). (ASTM
E1762--95, as cited in the HISB draft Glossary of Terms Related to
Information Security In Health care Information Systems)
    Part of entity authentication on the matrix.
Certification:
    The technical evaluation performed as part of, and in support
of, the accreditation process that establishes the extent to which a
particular computer system or network design and implementation meet
a pre-specified set of security requirements. This evaluation may be
performed internally or by an external accrediting agency.
    Part of administrative procedures to guard data integrity,
confidentiality, and availability.
Chain of Trust Partner Agreement:
    Contract entered into by two business partners in which it is
agreed to exchange data and that the first party will transmit
information to the second party, where the data transmitted is
agreed to be protected between the partners. The sender and receiver
depend upon each other to maintain the integrity and confidentiality
of the transmitted information. Multiple such two-party contracts
may be involved in moving information from the originator to the
ultimate recipient, for example, a provider may contract with a
clearing house to transmit claims to the clearing house; the
clearing house, in turn, may contract with another clearing house or
with a payer for the further transmittal of those same claims.
    Part of administrative procedures to guard data integrity,
confidentiality and availability on the matrix..
Classification:
    Protection of data from unauthorized access by the designation
of multiple levels of access authorization clearances to be required
for access, dependent upon the sensitivity of the information.
    A type of access control on the matrix.
Clearing House:
    * * * a public or private entity that processes or facilitates
the processing of nonstandard data elements of health information
into standard data elements. (HIPAA, Subtitle F, Section 262(a)
Section 1171(2))
Combination locks changed:
    Documented procedure for changing combinations of locking
mechanisms, both on a recurring basis and when personnel
knowledgeable of combinations no longer have a need to know or a
requirement for access to the protected facility/system.
    Part of termination procedures on the matrix.
Confidentiality:
    The property that information is not made available or disclosed
to unauthorized individuals, entities or processes. (ISO 7498-2, as
cited in the HISB draft Glossary of Terms Related to Information
Security In Health care Information Systems) .
Context-based access:
    An access control based on the context of a transaction (as
opposed to being based on attributes of the initiator or target).
The ``external'' factors might include time of day, location of the
user, strength of user authentication, etc.
    Part of access control on the matrix.
Contingency Plan:
    A plan for responding to a system emergency. The plan includes
performing backups, preparing critical facilities that can be used
to facilitate continuity of operations in the event of an emergency,
and recovering from a disaster. (O'Reilly, 1992, as cited in the
HISB draft Glossary of Terms Related to Information Security In
Health care Information Systems) Contingency plans should be updated
routinely.
    Part of Administrative procedures to guard data integrity,
confidentiality and availability on the matrix.
Continuity of signature capability:
    The public verification of a signature shall not compromise the
ability of the signer to apply additional secure signatures at a
later date. (ASTM E 1762--95)

[[Page 43273]]

    Part of digital signature on the matrix.
Counter signatures:
    It shall be possible to prove the order of application of
signatures. This is analogous to the normal business practice of
countersignatures, where some party signs a document which has
already been signed by another party. (ASTM E 1762 -95)
    Part of digital signature on the matrix.
Data:
    A sequence of symbols to which meaning may be assigned. (NRC,
1991, as cited in the HISB draft Glossary of Terms Related to
Information Security In Health care Information Systems)
Data authentication:
    The corroboration that data has not been altered or destroyed in
an unauthorized manner. Examples of how data corroboration may be
assured include the use of a check sum, double keying, a message
authentication code, or digital signature.
    Part of technical security services to control and monitor
access to information on the matrix
Data backup:
    A retrievable, exact copy of information.
    Part of media controls on the matrix.
Data backup plan:
    A documented and routinely updated plan to create and maintain,
for a specific period of time, retrievable exact copies of
information.
    Part of contingency plans on the matrix.
Data Integrity:
    The property that dat has [sic] not been altered or destroyed in
an unauthorized manner. (ASTM E1762-95).
Data storage:
    The retention of health care information pertaining to an
individual in an electronic format.
    Part of media controls on the matrix.
Digital signature:
    An electronic signature based upon cryptographic methods of
originator authentication, computed by using a set of rules and a
set of parameters such that the identity of the signer and the
integrity of the data can be verified. (FDA Electronic Record;
Electronic Signatures; Final Rule)
    Part of electronic signature on the matrix.
Disaster recovery:
    The process whereby an enterprise would restore any loss of data
in the event of fire, vandalism, natural disaster, or system
failure. (CPRI, 1996c, as cited in HISB, DRAFT GLOSSARY OF TERMS
RELATED TO INFORMATION SECURITY IN HEALTH CARE INFORMATION SYSTEMS
draft Glossary of Terms Related to Information Security in Health
Care Information Systems)
    Part of physical access controls (limited access) on the matrix.
Disaster recovery plan:
    Part of an overall contingency plan. The plan for a process
whereby an enterprise would restore any loss of data in the event of
fire, vandalism, natural disaster, or system failure. (CPRI, 1996c,
as cited in HISB, DRAFT GLOSSARY OF TERMS RELATED TO INFORMATION
SECURITY IN HEALTH CARE INFORMATION SYSTEMS draft Glossary of Terms
Related to Information Security in Health Care Information Systems)
    Part of contingency plan on the matrix.
Discretionary access control:
    Discretionary Access Control (DAC) is used to control access by
restricting a subject's access to an object. It is generally used to
limit a user's access to a file. In this type of access control it
is the owner of the file who controls other users' accesses to the
file.
    A type of access control on the matrix.
Disposal:
    The final disposition of electronic data, and/or the hardware on
which electronic data is stored.
    Part of media controls on the matrix.
Documentation:
    Written security plans, rules, procedures, and instructions
concerning all components of an entity's security.
    Part of security configuration mgmt on the matrix.
Electronic data interchange (EDI):
    Intercompany, computer-to-computer transmission of business
information in a standard format. For EDI purists, ``computer-to-
computer'' means direct transmission from the originating
application program to the receiving, or processing, application
program, and an EDI transmission consists only of business data, not
any accompanying verbiage or free-form messages. Purists might also
contend that a standard format is one that is approved by a national
or international standards organization, as opposed to formats
developed by industry groups or companies. (EDI Security, Control,
and Audit)
Electronic signature:
    The attribute that is affixed to an electronic document to bind
it to a particular entity. An electronic signature process secures
the user authentication (proof of claimed identity, such as by
biometrics (fingerprints, retinal scans, hand written signature
verification, etc.), tokens or passwords) at the time the signature
is generated; creates the logical manifestation of signature
(including the possibility for multiple parties to sign a document
and have the order of application recognized and proven) and
supplies additional information such as time stamp and signature
purpose specific to that user; and ensures the integrity of the
signed document to enable transportability, interoperability,
independent verifiability, and continuity of signature capability.
Verifying a signature on a document verifies the integrity of the
document and associated attributes and verifies the identity of the
signer. There are several technologies available for user
authentication, including passwords, cryptography, and biometrics.
(ASTM 1762-95, as cited in the HISB draft Glossary of Terms Related
to Information Security In Health care Information Systems)
Emergency mode operation:
    Access controls in place that enable an enterprise to continue
to operate in the event of fire, vandalism, natural disaster, or
system failure.
    Part of physical access controls (limited access) on the matrix.
Emergency mode operation plan:
    Part of an overall contingency plan. The plan for a process
whereby an enterprise would be able to continue to operate in the
event of fire, vandalism, natural disaster, or system failure.
    Part of contingency plan on the matrix.
Encryption:
    Transforming confidential plaintext into ciphertext to protect
it. Also called encipherment. An encryption algorithm combines
plaintext with other values called keys, or ciphers, so the data
becomes unintelligible. Once encrypted, data can be stored or
transmitted over unsecured lines. (EDI Security, Control, and Audit)
    Decrypting data reverses the encryption algorithm process and
makes the plaintext available for further processing.
    Part of access control on the matrix.
Entity authentication:
    1. The corroboration that an entity is the one claimed. (ISO
7498-2, as cited in the HISB draft Glossary of Terms Related to
Information Security In Health care Information Systems)
    Part of technical security services to control and monitor
access to information on the matrix.
    2. A communications/network mechanism to irrefutably identify
authorized users, programs, and processes, and to deny access to
unauthorized users, programs and processes.
    Part of mechanisms to prevent unauthorized access to data that
is transmitted over a communications network on the matrix.
Equipment control (into and out of site):
    Documented security procedures for bringing hardware and
software into and out of a facility and for maintaining a record of
that equipment. This includes, but is not limited to, the marking,
handling, and disposal of hardware and storage media.
    Part of physical access controls (limited access) on the matrix.
Facility security plan:
    A plan to safeguard the premises and building(s) (exterior and
interior) from unauthorized physical access, and to safeguard the
equipment therein from unauthorized physical access, tampering, and
theft.
    Part of physical access controls (limited access) on the matrix.
Formal mechanism for processing records:
    Documented policies and procedures for the routine, and non-
routine, receipt, manipulation, storage, dissemination,
transmission, and/or disposal of health information.

[[Page 43274]]

    Part of administrative procedures to guard data integrity,
confidentiality, and availability on the matrix.
Hardware/software installation & maintenance review and testing for
security features:
    Formal, documented procedures for (1) connecting and loading new
equipment and programs, (2) periodic review of the maintenance
occurring on that equipment and programs, and (3) periodic security
testing of the security attributes of that hardware/software.
    Part of security configuration mgmt on the matrix.
Independent verifiability:
    The capability to verify the signature without the cooperation
of the signer. Technically, it is accomplished using the public key
of the signatory, and it is a property of all digital signatures
performed with asymmetric key encryption
    Part of digital signature on the matrix.
Information:
    Data to which meaning is assigned, according to context and
assumed conventions. (National Security Council, 1991, as cited in
the HISB draft Glossary of Terms Related to Information Security In
Health care Information Systems)
Information access control:
    Formal, documented policies and procedures for granting
different levels of access to health care information.
    Part of administrative procedures to ensure integrity and
confidentiality on the matrix.
Integrity controls:
    Security mechanism employed to ensure the validity of the
information being electronically transmitted or stored.
    Part of mechanisms to prevent unauthorized access to data that
is transmitted over a communications network on the matrix.
Internal audit:
    The in-house review of the records of system activity (for
example, logins, file accesses, security incidents) maintained by an
organization.
    Part of administrative procedures to guard data integrity,
confidentiality, and availability on the matrix.
Interoperability:
    The applications used on either side of a communication, between
trading partners and/or between internal components of an entity,
being able to read and correctly interpret the information
communicated from one to the other.
    Part of digital signature on the matrix.
Inventory:
    Formal, documented identification of hardware and software
assets.
    Part of security configuration mgmt on the matrix.
Key:
    An input that controls the transformation of data by an
encryption algorithm (NRC, 1991, as cited in the HISB draft Glossary
of Terms Related to Information Security In Health care Information
Systems)
Maintenance of record of access authorizations:
    Ongoing documentation and review of the levels of access granted
to a user, program, or procedure accessing health information.
    Part of personnel security on the matrix.
Maintenance records:
    Documentation of repairs and modifications to the physical
components of a facility, for example, hardware, software, walls,
doors, locks.
    Part of physical access controls (limited access) on the matrix.
Mandatory Access Control (MAC):
    A means of restricting access to objects that is based on fixed
security attributes assigned to users and to files and other
objects. The controls are mandatory in the sense that they cannot be
modified by users or their programs. (Stallings, 1995) (as cited in
the HISB draft Glossary of Terms Related to Information Security In
Health care Information Systems)
    A type of access control on the matrix.
Media controls:
    Formal, documented policies and procedures that govern the
receipt and removal of hardware/software (for example, diskettes,
tapes) into and out of a facility.
    Part of physical safeguards to guard data integrity,
confidentiality, and availability on the matrix.
Message:
    A digital representation of information. (ABA Digital Signatures
Guidelines)
Message authentication:
    Ensuring, typically with a message authentication code, that a
message received (usually via a network) matches the message sent.
(O'Reilly, 1992, as cited in the HISB draft Glossary of Terms
Related to Information Security In Health care Information Systems)
    Part of mechanisms to prevent unauthorized access to data that
is transmitted over a communications network on the matrix
Message authentication code:
    Data associated with an authenticated message that allows a
receiver to verify the integrity of the message. (Glossary of
INFOSEC and INFOSEC Related Terms--Idaho State University)
Message integrity:
    The assurance of unaltered transmission and receipt of a message
from the sender to the intended recipient. (ABA Digital Signature
Guidelines)
    Part of digital signature on the matrix.
Multiple signatures:
    It shall be possible for multiple parties to sign a document.
Multiple signatures are conceptually, simply appended to the
document. (ASTM E 1762-95)
    Part of digital signature on the matrix.
Need-to-know procedures for personnel access:
    A security principle stating that a user should have access only
to the data he or she needs to perform a particular function.
(O'Reilly, 1992, as cited in the HISB draft Glossary of Terms
Related to Information Security In Health care Information Systems)
    Part of physical access controls (limited access) on the matrix.
Nonrepudiation:
    Strong and substantial evidence of the identity of the signer of
a message and of message integrity, sufficient to prevent a party
from successfully denying the origin, submission or delivery of the
message and the integrity of its contents. (ABA Digital Signature
Guidelines)
    Part of digital signature on the matrix.
Operating, and in some cases, maintenance personnel have proper
access authorizations:
    Formal, documented policies and procedures to be followed in
determining the access level to be granted to individuals working
on, or in the vicinity of, health information.
    Part of personnel security on the matrix.
Password:
    Confidential authentication information composed of a string of
characters. (ISO 7498--2, as cited in the HISB draft Glossary of
Terms Related to Information Security In Health care Information
Systems)
    Part of entity authentication on the matrix.
Periodic security reminders:
    Employees, agents and contractors should be made aware of
security concerns on an ongoing basis.
    Part of training on the matrix.
Personnel clearance procedure:
    A protective measure applied to determine that an individual's
access to sensitive unclassified automated information is
admissible. The need for and extent of a screening process is
normally based on an assessment of risk, cost, benefit, and
feasibility as well as other protective measures in place. Effective
screening processes are applied in such a way as to allow a range of
implementation, from minimal procedures to more stringent procedures
commensurate with the sensitivity of the data to be accessed and the
magnitude of harm or loss that could be caused by the individual
(DOE 1360.2A, as cited in Glossary of INFOSEC and INFOSEC Related
Terms--Idaho State University)
    Part of personnel security on the matrix.
Personnel security:
    The procedures established to ensure that all personnel who have
access to sensitive information have the required authority as well
as appropriate clearances. (NCSC Glossary of Computer Security
Terms, October 21, 1988)
    Part of administrative procedures to guard data integrity,
confidentiality and availability on the matrix.
Personnel security policy/procedure:
    Formal, documentation of policies and procedures established to
ensure that all personnel who have access to sensitive information
have the required authority as well as appropriate clearances.
(Glossary of INFOSEC and INFOSEC Related Terms--Idaho State
University)
    Part of personnel security on the matrix.
Physical access controls (limited access):
    Those formal, documented policies and procedures to be followed
to limit

[[Page 43275]]

physical access to an entity while ensuring that properly authorized
access is allowed.
    Part of Physical safeguards to guard data integrity,
confidentiality, and availability on the matrix.
Physical safeguards:
    Protection of physical computer systems and related buildings
and equipment from fire and other natural and environmental hazards,
as well as from intrusion. Also covers the use of locks, keys, and
administrative measures used to control access to computer systems
and facilities. (O'Reilly, 1992, as cited in HISB, draft Glossary of
Terms Related to Information Security in Health Care Information
Systems)
    A section of the matrix covering physical security requirements.
PIN (Personal Identification Number):
    A number or code assigned to an individual and used to provide
verification of identity.
    Part of entity authentication on the matrix.
Policy/guideline on work station use:
    Documented instructions/procedures delineating the proper
functions to be performed, the manner in which those functions are
to be performed, and the physical attributes of the surroundings, of
a specific computer terminal site or type of site, dependant upon
the sensitivity of the information accessed from that site.
    Part of Physical safeguards to guard data integrity,
confidentiality, and availability on the matrix.
Procedure for emergency access:
    Documented instructions for obtaining necessary information
during a crisis.
    Part of access control on the matrix.
Procedures for verifying access authorizations prior to physical
access:
    Formal, documented policies and instructions for validating the
access privileges of an entity prior to granting those privileges.
    Part of physical access controls (limited access) on the matrix.
Provider:
    A supplier of services as defined in section 1861(u) of the
HIPAA.
    A supplier of medical or other services as defined in section
1861(s) of the HIPAA.
Public key:
    One of the two keys used in an asymmetric encryption system. The
public key is made public, to be used in conjunction with a
corresponding private key. [Stallings, 1995]
Removal from access lists:
    The physical eradication of an entity's access privileges.
    Part of termination procedures on the matrix.
Removal of user account(s):
    The termination or deletion of an individual's access privileges
to the information, services, and resources for which they currently
have clearance, authorization, and need-to-know when such clearance,
authorization and need-to-know no longer exists.
    Part of termination procedures on the matrix.
Report procedures:
    The documented formal mechanism employed to document security
incidents.
    Part of security incident procedures on the matrix.
Response procedures:
    The documented formal rules/instructions for actions to be taken
as a result of the receipt of a security incident report.
    Part of security incident procedures on the matrix.
Risk analysis:
    Risk analysis, a process whereby cost-effective security/control
measures may be selected by balancing the costs of various security/
control measures against the losses that would be expected if these
measures were not in place.
    Part of the security management process on the matrix.
Risk management:
    Risk is the possibility of something adverse happening. Risk
management is the process of assessing risk, taking steps to reduce
risk to an acceptable level and maintaining that level of risk.
(NIST Pub. 800-14)
    Part of the security management process on the matrix.
Role-based access control:
    Role-based access control (RBAC) is an alternative to
traditional access control models (e.g., discretionary or non-
discretionary access control policies) that permits the
specification and enforcement of enterprise-specific security
policies in a way that maps more naturally to an organization's
structure and business activities. With RBAC, rather than attempting
to map an organization's security policy to a relatively low-level
set of technical controls (typically, access control lists), each
user is assigned to one or more predefined roles, each of which has
been assigned the various privileges needed to perform that role.
    Part of access control on the matrix.
    Part of authorization control on the matrix.
Sanction policy:
    Organizations must have policies and procedures regarding
disciplinary actions which are communicated to all employees, agents
and contractors, for example, verbal warning, notice of disciplinary
action placed in personnel files, removal of system privileges,
termination of employment and contract penalties (ASTM E 1869)
    In addition to enterprise sanctions, employees, agents, and
contractors must be advised of civil or criminal penalties for
misuse or misappropriation of health information. Employees, agents
and contractors, must be made aware that violations may result in
notification to law enforcement officials and regulatory,
accreditation and licensure organizations. (ASTM)
    Part of the security management process on the matrix.
Secure work station location:
    Physical safeguards to eliminate or minimize the possibility of
unauthorized access to information, for example, locating a terminal
used to access sensitive information in a locked room and
restricting access to that room to authorized personnel, not placing
a terminal used to access patient information in any area of a
doctor's office where the screen contents can be viewed from the
reception area.
    Part of physical safeguards to guard data integrity,
confidentiality, and availability on the matrix.
Security:
    Security encompasses all of the safeguards in an information
system, including hardware, software, personnel policies,
information practice policies, disaster preparedness, and the
oversight of all these areas. The purpose of security is to protect
both the system and the information it contains from unauthorized
access from without and from misuse from within.
    Through various security measures, a health information system
can shield confidential information from unauthorized access,
disclosure and misuse, thus protecting privacy of the individuals
who are the subjects of the stored data. (Privacy and Health
Information Systems: A Guide to Protecting Patient Confidentiality)
Security awareness training:
    All employees, agents, and contractors must participate in
information security awareness training programs. Based on job
responsibilities, individuals may be required to attend customized
education programs that focus on issues regarding use of health
information and responsibilities regarding confidentiality and
security. (ASTM)
    Part of Physical safeguards to guard data integrity,
confidentiality, and availability on the matrix.
Security configuration management:
    Measures, practices and procedures for the security of
information systems should be coordinated and integrated with each
other and other measures, practices and procedures of the
organization so as to create a coherent system of security. (OECD
Guidelines, as cited in NIST Pub 800-14)
    Part of administrative procedures to guard data integrity,
confidentiality, and availability on the matrix.
Security incident procedures:
    Formal, documented instructions for reporting security breaches.
    Part of administrative procedures to guard data integrity,
confidentiality and availability on the matrix.
Security management process:
    A security management process encompasses the creation,
administration and oversight of policies to ensure the prevention,
detection, containment, and correction of security breaches. It
involves risk analysis and risk management, including the
establishment of accountability, management controls (policies and
education), electronic controls, physical security, and penalties
for the abuse and misuse of its assets, both physical and
electronic.

[[Page 43276]]

    Part of administrative procedures to guard data integrity,
confidentiality and availability on the matrix.
Security policy:
    The framework within which an organization establishes needed
levels of information security to achieve the desired
confidentiality goals. A policy is a statement of information
values, protection responsibilities, and organization commitment for
a system. (OTA, 1993) The American Health Information Management
Association recommends that security policies apply to all
employees, medical staff members, volunteers, students, faculty,
independent contractors, and agents. (AHIMA, 1996c) (as cited in
HISB, DRAFT GLOSSARY OF TERMS RELATED TO INFORMATION SECURITY IN
HEALTH CARE INFORMATION SYSTEMS draft Glossary of Terms Related to
Information Security in Health Care Information Systems )
    Part of the security management process on the matrix
Security testing:
    A process used to determine that the security features of a
system are implemented as designed and that they are adequate for a
proposed applications environment. This process includes hands-on
functional testing, penetration testing, and verification. (Glossary
of INFOSEC and INFOSEC Related Terms--Idaho State University)
    Part of security configuration mgmt on the matrix.
Sign-in for visitors and escort, if appropriate:
    Formal, documented procedure governing the reception and hosting
of visitors.
    Part of physical access controls (limited access) on the matrix.
Subject/object separation:
    Access to a subject does not guarantee access to the objects
associated with that subject.
    Subject is defined as an active entity, generally in the form of
a person, process, or device that causes information to flow among
objects or changes the system state. Technically, a process/domain
pair. (Glossary of INFOSEC and INFOSEC Related Terms--Idaho State
University)
    Object is defined as a passive entity that contains or receives
information. Access to an object potentially implies access to the
information it contains. Examples of objects are: records blocks,
pages, segments, files, directories, directory trees, and programs,
as well as bits, bytes, words, fields, processors, video displays,
keyboards, clocks, printers, network nodes, etc. (Glossary of
INFOSEC and INFOSEC Related Terms--Idaho State University)
    A type of access control.
System users, including maintenance personnel, trained in security:
    See Awareness training (including management).
    Part of personnel security on the matrix.
Technical security mechanisms:
    The processes that are put in place to guard against
unauthorized access to data that is transmitted over a
communications network,
    A section of the matrix.
Technical security services:
    The processes that are put in place (1) to protect information
and (2) to control and monitor individual access to information.
    A section of the matrix.
Telephone callback:
    A method of authenticating the identity of the receiver and
sender of information through a series of ``questions'' and
``answers'' sent back and forth establishing the identity of each.
For example, when the communicating systems exchange a series of
identification codes as part of the initiation of a session to
exchange information, or when a host computer disconnects the
initial session before the authentication is complete, and the host
calls the user back to establish a session at a predetermined
telephone number.
    Part of Entity authentication on the matrix.
Termination procedures:
    Formal, documented instructions, which include appropriate
security measures, for the ending of an employee's employment, or an
internal/external user's access.
    Part of administrative procedures to guard data integrity,
confidentiality and availability on the matrix.
Testing and revision:
    (1) Testing and revision of contingency plans refers to the
documented process of periodic testing to discover weaknesses in
such plans and the subsequent process of revising the documentation
if necessary.
    Part of contingency plan on the matrix.
    (2) Testing and revision of programs should be restricted to
formally authorized personnel.
    Part of physical access controls (limited access) on the matrix.
Time-of-day:
    Access to data is restricted to certain time frames, e.g.,
Monday through Friday, 8:00 a.m. to 6:00 p.m.
    A type of access control on the matrix.
Time-stamp:
    To create a notation that indicates, at least, the correct date
and time of an action, and the identity of the person that created
the notation.
Token:
    A physical item that's used to provide identity. Typically an
electronic device that can be inserted in a door or a computer
system to obtain access. (O'Reilly, 1992) (as cited in HISB, DRAFT
GLOSSARY OF TERMS RELATED TO INFORMATION SECURITY IN HEALTH CARE
INFORMATION SYSTEMS draft Glossary of Terms Related to Information
Security in Health Care Information Systems)
    Part of entity authentication on the matrix
Training:
    Education concerning the vulnerabilities of the health
information in an entity's possession and ways to ensure the
protection of that information.
    Part of administrative procedures to guard data integrity,
confidentiality and availability on the matrix.
Transportability:
    A signed document can be transported (over an insecure network)
to another system, while maintaining the integrity of the document.
    Part of digital signature on the matrix.
Turn in keys, token or cards that allow access:
    Formal, documented procedure to ensure all physical items that
allow a terminated employee to access a property, building, or
equipment are retrieved from that employee, preferably prior to
termination.
    Part of termination procedures on the matrix.
Unique user identification:
    The combination name/number assigned and maintained in security
procedures for identifying and tracking individual user identity.
(ASTM)
    Part of Entity authentication on the matrix.
User authentication:
    The provision of assurance of the claimed identity of an entity.
(ASTM E1762-5)
    Part of digital signature on the matrix.
User-based access:
    A security mechanism used to grant users of a system access
based upon the identity of the user.
    Part of access control on the matrix.
    Part of authorization control on the matrix.
User education in importance of monitoring log in success/failure,
and how to report discrepancies:
    Training in the user's responsibility to ensure the security of
health care information.
    Part of training on the matrix.
User education concerning virus protection:
    Training relative to user awareness of the potential harm that
can be caused by a virus, how to prevent the introduction of a virus
to a computer system, and what to do if a virus is detected.
    Part of training on the matrix.
User education in password management:
    A type of user training in the rules to be followed in creating
and changing passwords and the need to keep them confidential.
    Part of training on the matrix.
Virus checking:
    A computer program that identifies and disables:
    (1) another ``virus'' computer program, typically hidden, that
attaches itself to other programs and has the ability to replicate.
(Unchecked virus programs result in undesired side effects generally
unanticipated by the user.)
    (2) A type of programmed threat. A code fragment (not an
independent program) that reproduces by attaching to another
program. It may damage data directly, or it may degrade system
performance by taking over system resources which are then not
available to authorized users. (O'Reilly, 1992, as cited in HISB,
DRAFT GLOSSARY OF TERMS RELATED TO INFORMATION SECURITY IN HEALTH
CARE INFORMATION SYSTEMS draft Glossary of Terms Related to
Information

[[Page 43277]]

Security in Health Care Information Systems)
    (3) Code embedded within a program that causes a copy of itself
to be inserted in one or more other programs. In addition to
propagation, the virus usually performs some unwanted function.
(Stallings, 1995, as cited in HISB, DRAFT GLOSSARY OF TERMS RELATED
TO INFORMATION SECURITY IN HEALTH CARE INFORMATION SYSTEMS draft
Glossary of Terms Related to Information Security in Health Care
Information Systems)
    Part of security configuration mgmt on the matrix.

Acronyms

ABA  American Bar Association
ADA  American Dental Association
ANSI  American National Standards Institute
AHIMA  American Health Information Management Association
ASTM  American Society for Testing and Materials
CDT  Center for Democracy & Technology
CEN  Central European Nations
CORBA  Common Object Request Broker
CPRI  Computer-based Patient Record Institute
DAC  Discretionary Access Control
DEA  Data Encryption Algorithm
EDI  Electronic Data Interchange
EHNAC  Electronic Healthcare Network Accreditation Commission
FDA  Food and Drug Administration
HISB  Health Care Informatics Standards Board
ISO  International Organization for Standardization
MAC  Mandatory Access Control
NCSC  National Computer Security Center
NCQA  National Council for Quality Assurance
NCVHS  National Committee on Vital and Health Statistics
NUBC  National Uniform Billing Committee
NUCC  National Uniform Claim Committee
PGP  Pretty Good Privacy
PIN  Personal Identification Number
NIST  National Institutes of Standards and Technology
SDO  Standards Development Organization
WEDI  Workgroup for Electronic Data Interchange

Bibliography

ABA, Digital Signature Guidelines.
ANSI, ASC X12.58, Security Structures, June, 1997.
ASTM, E1762-95, Standard Guide for Electronic Authentication of
Health Care Information. ASTM Committee E-31 on Computerized
Systems, Subcommittee E31.20 on Authentication. West Conshohocken,
PA, October 10, 1995.
ASTM, A Security Framework for Healthcare Information. ASTM
Committee E-31 on Computerized Systems, Subcommittee E31.20 on
Authentication. West Conshohocken, PA, February 11, 1997.
EDI Security, Control, and Audit, Marcells, Albert J. & Chan, Sally.
Artech House, 685 Canton Street, Norwood, MA 01602, 1993.
FDA, Electronic Record; Electronic Signatures; Final Rule.
For the Record--Protecting Electronic Health Information, Computer
Science and Telecommunications Board, NRC, National Academy Press,
2102 Constitution Avenue, NW, Box 285, Washington, DC, 20055, 1997.
Glossary of INFOSEC and INFOSEC Related Terms, Version 6. Schou,
Corey D., Center for Decision Support, Idaho State University.
August, 1996
HISB, DRAFT GLOSSARY OF TERMS RELATED TO INFORMATION SECURITY IN
HEALTH CARE INFORMATION SYSTEMS Glossary of Terms Related to
Information Security in Health Care Information Systems draft, 1997
NCSC, Glossary of Computer Security Terms, October 21, 1988.
NIST Pub 800-14, ``Generally Accepted Principles and Practices for
Securing Information Technology Systems'', Swanson, Marianne, &
Guttman, Barbara, September, 1996. PGP, Inc., Cryptology Reference
Chart, August, 1997
Privacy and Health Information Systems: A Guide to Protecting
Patient Confidentiality, Goldman, Janlori & Mulligan, Deirdre, CDT,
1996.

Addendum 3

HIPAA SECURITY MATRIX--mapping

    Please Note: While we have attempted to categorize security
requirements for ease of understanding and reading clarity, there
are overlapping areas on the matrix in which the same requirements
are restated in a slightly different context.

 Administrative Procedures To Guard Data Integrity, Confidentiality, and
                              Availability
------------------------------------------------------------------------
         Requirement             Implementation       Mapped  standards
------------------------------------------------------------------------
Certification...............  ....................  47.
Chain of trust partner        ....................  12, 47.
 agreement.
Contingency plan (all listed  Applications and      17, 47, 53.
 implementation features       data criticality     12, 17, 47.
 must be implemented).         analysis.            12, 17, 47, 53.
                              Data backup plan....  47, 53.
                              Disaster recovery     12, 17, 47.
                               plan.
                              Emergency mode
                               operation plan.
                              Testing and revision
Formal mechanism for          ....................  12, 17.
 processing records.
Information access control    Access authorization  12, 17, 47, 53.
 (all listed implementation   Access establishment  17, 47, 53.
 features must be             Access modification.  12, 17, 47, 53.
 implemented).
Internal audit..............  ....................  12, 17, 43, 44, 47.
   Personnel security (all    Assure supervision    17, 47.
    listed implementation      of maintenance
      features must be         personnel by
        implemented)           authorized,
                               knowledgeable
                               person.
                              Maintainance of       12, 17, 47.
                               record of access
                               authorizations.
                              Operating, and in     17, 47.
                               some cases,
                               maintenance
                               personnel have
                               proper access
                               authorization.
                              Personnel clearance   17, 47.
                               procedure.
                              Personnel security    17, 47, 53.
                               policy/procedure.
                              System users,         12, 17, 47, 53.
                               including
                               maintenance
                               personnel, trained
                               in security.
Security configuration mgmt.  Documentation.......  12, 17, 47, 53.
 (all listed implementation
 features must be
 implemented).
                              Hardware/software     12, 17, 47.
                               installation &
                               maintenance review
                               and testing for
                               security features.
                              Inventory...........  12, 17.
                              Security testing....  12, 17, 47.
                              Virus checking......  12, 17, 47, 53.
Security incident procedures  Report procedures...  12, 17, 47.
 (all listed implementation   Response procedures.  17, 47.
 features must be
 implemented).

[[Page 43278]]


Security management process   Risk analysis.......  12, 17, 47, 53.
 (all listed implementation   Risk management.....  17, 47.
 features must be             Sanction policy.....  12, 17, 47, 53.
 implemented).                Security policy.....  17, 47, 53.
Termination procedures (all   Combination locks     12, 17.
 listed implementation         changed.             12, 17, 47, 53.
 features must be             Removal from access   12, 17, 47.
 implemented).                 lists.               12, 17, 47.
                              Removal of user
                               account(s).
                              Turn in keys, token
                               or cards that allow
                               access.
Training (all listed          Awareness training    12, 17, 18, 47, 53.
 implementation features       for all personnel
 must be implemented).         (including mgmt).
                              Periodic security     12, 18.
                               reminders.
                              User education        ....................
                               concerning virus
                               protection.
                              User education in     12, 17, 18.
                               importance of
                               monitoring log in
                               success/failure,
                               and how to report
                               discrepancies.
                              User education in     12, 18, 47
                               password management.
------------------------------------------------------------------------

    Physical Safeguards To Guard Data Integrity, Confidentiality, and
                              Availability
------------------------------------------------------------------------
         Requirement             Implementation       Mapped standards
------------------------------------------------------------------------
Assigned security             ....................  47.
 responsibility.
Media controls (all listed    Access control......  17, 47, 53.
 implementation features      Accountability        17, 18, 47.
 must be implemented).         (tracking            12, 17, 47, 53.
                               mechanism).          12, 17, 47.
                              Data backup.........  17, 47, 53.
                              Data storage........
                              Disposal............
Physical access controls      Disaster recovery...  17.
 (limited access) (all        Emergency mode        17.
 listed implementation         operation.           17, 47.
 features must be             Equipment control     12, 17, 47.
 implemented).                 (into and out of
                               site).
                              Facility security
                               plan.
                              Procedures for        17, 18, 47.
                               verifying access
                               authorizations
                               prior to physical
                               access.
                              Maintenance records.  17
                              Need-to-know          12, 17, 47, 53
                               procedures for
                               personnel access.
                              Sign-in for visitors  17
                               and escort, if
                               appropriate.
                              Testing and revision  17, 47
Policy/guideline on work      ....................  18.
 station use.
Secure work station location  ....................  17, 53.
Security awareness training.  ....................  12, 17, 47.
------------------------------------------------------------------------

  Technical Security Services To Guard Data Integrity, Confidentiality,
                            and Availability
------------------------------------------------------------------------
         Requirement             Implementation       Mapped standards
------------------------------------------------------------------------
Access control (The           Context-based         5, 12, 14, 16, 17,
 following implementation      access,.              40, 47.
 feature must be              Encryption..........  1, 6, 12, 14, 17,
 implemented: Procedure for                          21, 22, 23, 24, 26,
 emergency access, In         Procedure for          36, 28, 29, 30, 31,
 addition, at least one of     emergency access.     47, 49, 53, 54, 55.
 the following three          Roll-based access,..  14, 17, 53.
 implementation features      User-based access...  14, 16, 17, 40, 41,
 must be implemented:                                47, 53.
 Context-based access, Roll-                        11, 12, 14, 16, 17,
 based access, User-based                            40, 41, 47, 53.
 access. The use of
 Encryption is optional).
Audit controls..............  ....................  12, 14, 18, 47, 53.
Authorization control (At     Role-based access...  5, 14, 16, 17, 47,
 least one of the listed      User-based access...   53.
 implementation features                            14, 16, 47, 53.
 must be implemented).
Data authentication.........  ....................  11, 53.
Entity Authentication (The    Automatic logoff....  14, 16, 17, 18, 40,
 following implementation     Biometric...........   53
 features must be             Password............  14, 16, 18, 40, 47,
 implemented: Automatic       PIN.................   53.
 logoff, Unique user          Telephone callback..  14, 16, 17, 18, 19,
 identification. In           Token...............   40, 47, 53.
 addition, at least one of    Unique user           14, 16, 18, 19, 40,
 the other listed              identification.       47.
 implementation features                            14, 17, 18, 47, 53.
 must be implemented).                              14, 17, 47, 50, 53.
                                                    14, 47, 53.
------------------------------------------------------------------------

[[Page 43279]]

 Technical Security Mechanisms To Guard Data Integrity, Confidentiality,
                            and Availability
------------------------------------------------------------------------
         Requirement             Implementation       Mapped standards
------------------------------------------------------------------------
Communications/network        Access controls.....  14, 17, 22, 23, 39,
 controls (If communications  Alarm, event           47, 48, 53.
 or networking is employed,    reporting, and       14, 17, 18, 35, 36,
 the following                 audit trail.          37, 38, 44.
 implementation features      Audit trail
 must be implemented:         Encryption..........  1, 6, 12, 14, 17,
 Integrity controls, Message                         21, 22, 23, 24, 26,
 authentication. In           Entity                 27, 28, 29, 30, 31,
 addition, one of the          authentication.       47, 49, 52, 53.
 following implementation                           12, 14, 17, 18, 20,
 features must be             Event reporting        22, 23, 31, 32, 33,
 implemented: Access          Integrity controls..   34, 51, 53.
 controls, Encryption. In     Message
 addition, if using a          authentication.      14, 15, 17, 18, 22,
 network, the following four                         23, 45, 46.
 implementation features                            14, 15, 17, 18, 22,
 must be implemented: Alarm,                         23, 25, 45, 46, 52.
 Audit trail, Entity
 authentication, Event
 reporting).
------------------------------------------------------------------------

                          Electronic Signature
------------------------------------------------------------------------
         Requirement             Implementation       Mapped standards
------------------------------------------------------------------------
Digital signature (If         Ability to add        3, 4, 10, 11, 13, 20
 digital signature is          attributes.          3, 4, 11, 13, 14, 18
 employed, the following      Continuity of         3, 4, 10, 11, 13,
 three implementation          signature             14, 18
 features must be              capability.          3, 4, 11, 13, 20
 implemented: Message         Counter signatures..  3, 4, 7, 8, 9, 13,
 integrity, Non-repudiation,  Independent            14, 48
 User authentication. Other    verifiability.       3, 4, 10, 11, 13,
 implementation features are  Interoperability....   14, 18
 optional).                   Message integrity...  3, 4, 10, 11, 13, 20
                              Multiple signatures.  2, 3, 4, 10, 11, 13,
                              Non-repudiation.....   14, 42
                              Transportability....  3, 4, 11, 13, 14, 18
                              User authentication.  3, 4, 10, 11, 13, 20
------------------------------------------------------------------------

Mapped Standards

1. ANSI X3.92--Data Encryption Standard
2. ANSI X9.30--Part 1: Public Key Cryptography Using Irreversible
Algorithms: Digital Signature Algorithm
3. ANSI X9.30--Part 2: Public Key Cryptography Using Irreversible
Algorithms: Secure Hash Algorithm (SHA-1)
4. ANSI X9.31--Reversible Digital Signature Algorithms
5. ANSI X9.45--Enhanced Management Controls Using Digital Signatures
and Attribute Certificates
6. ANSI X9.52--Triple DES Modes of Operation
7. ANSI X9.55--Extensions to Public Key Certificates and CRLs
8. ANSI X9.57--Certificate Management
9. ANSI X9.62--Elliptic Curve Digital Signature Algorithm (draft)
10. ANSI X12.58--Security Structures (version 2)
11. ASTM E 1762--Standard Guide for Authentication of Healthcare
Information
12. ASTM E 1869--Draft Standard for Confidentiality, Privacy, Access
and Data Security Principles
13. ASTM PS 100-97--Standard Specification for Authentication of
Healthcare Information Using Digital Signatures
14. ASTM PS 101-97--Security Framework for Healthcare Information
15. ASTM PS 102-97--Standard Guide for Internet and Intranet
Security
16. ASTM PS 103-97 Authentication & Authorization Guideline
17. CEN--European Pre-Standard
18. FDA--Electronic Records--Electronic Signatures--Final Rule
19. FIPS PUB 112--Password Usage
20. FIPS PUB 196--Entity Authentication Using Public Key
Cryptography
21. FIPS PUB 46-2--Data Encryption Standard
22. IEEE 802.10: Interoperable LAN/MAN Security (SILS), 1992-1996
(multiple parts)
23. IEEE 802.10c--LAN/WAN Security--Key Management
24. IETF ID--Combined SSL/PCT Transport Layer Security Protocol
25. IETF ID--FTP Authentication Using DSA
26. IETF ID--Secure HyperText TP Protocol (S-HTTP)
27. IETF ID--SMIME Cert Handling
28. IETF ID--SMIME Message Specification
29. IETF RFC 1422--Privacy Enhanced Mail: Part 1: Message Encryption
and Authentication Procedures
30. IETF RFC 1424--Privacy Enhanced Mail: Part 2: Certificate-Based
Key Management
31. IETF RFC 1423--Privacy Enhanced Mail: Part 3: Algorithms, Modes,
and Identifiers
32. ISO/IEC 9798-1: Information Technology--Security Techniques--
Entity Authentication Mechanisms--Part 1: General Model
33. ISO/IEC 9798-2: Information Technology--Security Techniques--
Entity Authentication Mechanisms--Part 2: Entity Authentication
Using Asymmetric Techniques
34. ISO/IEC 9798-2: Information Technology--Security Techniques--
Entity Authentication Mechanisms--Part 2: Entity Authentication
Using Symmetric Techniques
35. ISO/IEC 10164-4--Information Technology--Open Systems
Connection--System Management: Alarm Reporting Function
36. ISO/IEC 10164-5--Information Technology--Open Systems
Connection--System Management: Event Report Management Function
37. ISO/IEC 10164-7--Information Technology--Open Systems
Connection--System Management: Security Alarm Reporting Function
38. ISO/IEC 10164-8--Information Technology--Open Systems
Connection--System Management: Security Audit Trail Function
39. ISO/IEC 10164-9--Information Technology--Open Systems
Connection--System Management: Objects and Attributes for Access
Control
40. ISO/IEC 10181-2--Information Technology--Security Frameworks in
Open Systems--Authentication Framework
41. ISO/IEC 10181-3--Information Technology--Security Frameworks in
Open Systems--Access Control Framework
42. ISO/IEC 10181-4--Information Technology--Security Frameworks in
Open Systems--Non-repudiation Framework
43. ISO/IEC 10181-5--Information Technology--Security Frameworks in
Open Systems--Confidentiality Framework
44. ISO/IEC 10181-7--Information Technology--Security Frameworks in
Open Systems--Security Audit Framework
45. ISO/IEC 10736--Information Technology--Telecommunications and
Information Exchange Between Systems--Transport Layer Security
Protocol (TLSP)

[[Page 43280]]

46. ISO/IEC 11577--Information Technology--Telecommunications and
Information Exchange Between Systems--Network Layer Security
Protocol (NLSP)
47. NIST--Generally Accepted Principles and Practices for Secure
Information Technology Systems
48. NIST MISPC--Minimum Interoperability Specification for PKI
Components Version 1
49. PKCS #7--Cryptographic Message Syntax Standard Version 1.5 or
later
50. PKCS #11--Cryptoki B A Cryptographic Token Interface
51. RFC 1510--Kerberos Authentication Service
52. RFC 2104--HMAC:Keyed-Hashing for Message Authentication
53. For the Record--Protecting Electronic Health Information
54. ANSI X9.42--Management of Symmetric Keys Using Diffie-Hellman
55. ANSI X9.44--Key Transport Using RSA

[FR Doc. 98-21601 Filed 8-7-98; 1:23 pm]
BILLING CODE 4120-01-P