What is a covered entity?

A covered entity is defined under HIPAA (Health Insurance Portability and Accountability Act) as a health care provider, health plan, or health care clearinghouse that transmits health information electronically in connection with a HIPAA transaction. This definition encompasses organizations and professionals who handle protected health information (PHI) and are therefore subject to HIPAA regulations.

Choosing the correct option emphasizes the significance of the electronic transmission of health information, which is a central aspect of HIPAA compliance. The law was established to ensure the confidentiality, integrity, and security of health information, particularly when it is shared electronically. This includes hospitals, clinics, insurance companies, and billing services—entities that play a role in the health care system and manage PHI.

Other options do not meet the criteria for covered entities as defined by HIPAA. For instance, a medical facility that operates under local regulations might not necessarily engage in electronic transmission of health information. Similarly, a business that sells health-related products doesn't fall under the specific categories of providers, plans, or clearinghouses defined by HIPAA. Lastly, a patient receiving medical treatment is an individual receiving care rather than a provider or entity that transmits information, and thus, does not fit into the category of covered entities.