What defines a "covered entity" in healthcare?

A "covered entity" in healthcare is defined as a health plan or healthcare provider that transmits health information electronically. This designation is particularly important in relation to the Health Insurance Portability and Accountability Act (HIPAA), which sets standards for the protection of health information. The key aspect of being a covered entity is the electronic transmission of health data, which triggers the need to comply with HIPAA regulations to safeguard sensitive health information.

Covered entities can include healthcare providers who use electronic means for billing or maintaining patient data, as well as health plans that administer benefits and process claims. By transmitting health information electronically, these entities are required to follow stringent privacy and security measures to protect patient data.

In contrast, other options identify entities or providers that do not necessarily engage in the electronic transmission of health information or are limited in scope, and thus do not fit the criteria established by HIPAA for a covered entity.