The HIPAA Privacy Rule establishes strict standards to safeguard patient information, such as requiring healthcare providers to obtain a patient’s consent before sharing Protected Health Information with insurers. Like many regulations, the Privacy Rule also has exceptions. One of the most important exceptions for a covered entity to understand is called TPO. This guide explains what TPO stands for in HIPAA rules and how your organization can benefit.
What Is TPO in HIPAA Compliance?
TPO for HIPAA stands for treatment, payment, and operations. These three areas are part of the Privacy Rule’s permitted uses and disclosures for PHI. Even though covered entities are normally prohibited from sharing PHI without consent, HIPAA regulations allow it when necessary for treating patients, processing payments, or carrying out essential healthcare operations.
The HIPAA Treatment, Payment, and Operations Exception
HIPAA regulations outline the TPO exception clearly in 45 CFR 164.506 – Uses and Disclosures To Carry Out Treatment, Payment, or Health Care Operations. According to this section, a covered entity is allowed to:
- “Use or disclose protected health information for its own treatment, payment, or health care operations.”
- “Disclose protected health information for treatment activities of a health care provider.”
- “Disclose protected health information to another covered entity or a health care provider for the payment activities of the entity.”
- “Disclose protected health information to another covered entity for health care operations activities of the entity that receives the information,” when the information is directly related to a patient’s care or fraud, compliance, and abuse detection requirements.
The statute also allows organized healthcare arrangements to share PHI, such as regional hospitals joining forces to improve emergency response services.
The Purpose of TPO in HIPAA
HIPAA regulations are ultimately designed to protect patients. The Privacy Rule recognizes that in some care situations, it’s in a patient’s best interests for covered entities to share PHI without obstructions:
- Consulting with medical colleagues to determine an optimal treatment plan for the patient
- Sharing a patient’s charts with the on-call nursing staff to ensure proper care
- Sending billing details to a health insurer so payment for a life-saving operation can be approved
- Processing a patient’s prescription to dispense the correct medication
- Analyzing treatment outcomes to improve the quality of care for future patients
In all of these situations, having to stop and get signed consent before disclosing PHI could end up harming patients. The HIPAA TPO exception allows covered entities to streamline compliance while providing a high standard of care.
What TPO Stands For in HIPAA
To avoid HIPAA violations, it’s not enough to have a general idea of the purpose of TPO in HIPAA. Your organization needs to understand the difference between permitted and non-permitted disclosures in each part of the TPO triangle.
1. Treatment
HIPAA defines treatment as providing, managing, or coordinating healthcare or related services for patients. As part of the treatment process, healthcare providers may also need to consult with other medical professionals or refer patients to another doctor. All of these activities involve sharing PHI, but the treatment exception means the disclosures don’t violate HIPAA rules.
Here are some examples of allowed disclosures in a healthcare environment:
- A primary care physician refers the patient to a surgeon, sharing any preliminary diagnoses, medications, or treatments provided
- An emergency room doctor talks with ambulance staff about a patient’s vitals
- On-call nurses call (or text via a HIPAA-compliant app) a physician to provide updates about a patient’s status
- A pharmacist contacts a patient’s doctor to confirm the validity of a prescription
- Diagnostic technicians send a copy of the completed test results to the patient’s primary care physician
Hospitals or medical professionals don’t need to ask for a patient’s permission to perform these treatment activities.
2. Payment
Payment processors (e.g., credit card companies) aren’t covered entities, so HIPAA requirements don’t apply to the actual payment process. Instead, the “payment” part of TPO refers to activities related to billing, invoicing, and claims.
HIPAA rules broaden the definition to include activities necessary for covered entities to receive or provide reimbursement, payment, and/or premiums. Some common examples include:
- Disclosing treatment details to the billing department to invoice the patient’s insurance company
- Sharing prescription or treatment data with a healthcare clearinghouse for invoice creation purposes
- Providing requested information to an insurer for claims verification
- Reviewing a patient’s health insurance plan to verify coverage
- Performing risk adjustments
Before sharing PHI with third-party vendors, such as business consultants or collection agencies, a Business Associate Agreement must be in place.
3. (Healthcare) Operations
The Privacy Rule exemption for operations refers to sharing PHI when necessary for a covered entity’s core activities, services, and functions. For example:
- Hospital administrators randomly check treatment records to evaluate staff performance and care quality
- Directors periodically review billing information to reduce costs and keep the facility operational
- HR staff look into a physician’s patient outcomes before making hiring decisions or taking disciplinary actions
- Insurance companies check a patient’s records for evidence of fraud
- Health plans make underwriting or billing decisions based on a patient’s pre-existing conditions
Even customer service agents often need to access PHI to help patients with questions about billing, prescriptions, test results, or plan coverage.
What Disclosures Aren’t Allowed Under HIPAA TPO Rules?
Even though healthcare providers have significant latitude with HIPAA treatment, payment, and operations disclosures, this doesn’t excuse careless or malicious use of PHI. The following are still violations:
- Unrelated staff members snooping on patient charts or sharing them with family members
- Unauthorized individuals accessing the EHR system
- Pharmacists loudly discussing a patient’s prescription or medical condition, letting bystanders hear
- Organizations using patient records for marketing purposes without permission
- Sharing psychotherapy notes in any context (even for treatment purposes) without written patient consent
Finally, keep in mind that HIPAA rules regarding data minimization also apply to TPO circumstances. Even when sharing PHI is necessary for effective treatment, your organization should keep disclosures as narrow and focused as possible.
How Can HIPAA TPO Rules Help Your Organization?
Understanding what TPO means for HIPAA can streamline your organization’s compliance needs. The goal is to integrate HIPAA rules into your operations so that compliance becomes a natural complement to your patient care program, rather than a heavy burden. Discover how Compyl’s automation features have helped organizations of every size achieve HIPAA compliance cost-effectively.
