Which of the following statements about covered entities is true?

Prepare for the FERPA and HIPAA Test. Study with flashcards and multiple-choice questions featuring hints and explanations to boost your knowledge. Get exam-ready!

The statement that covered entities are required to transmit health data electronically to ensure standard practices is correct. Under the Health Insurance Portability and Accountability Act (HIPAA), covered entities, which include healthcare providers, health plans, and healthcare clearinghouses, must adopt standard electronic formats for electronic health data transactions. This requirement aims to improve the efficiency and effectiveness of health information systems by creating uniform protocols that enhance data exchange.

This transmission of health data electronically is governed by established standards that help ensure that sensitive health information is handled in a secure and consistent manner, which is critical for maintaining patient privacy and compliance with regulations. The act of standardizing the electronic transmission processes is tied directly to HIPAA's goals of improving healthcare delivery and protecting patient data.

The other options presented do not align with the regulatory framework surrounding covered entities. For example, covered entities are not limited to only private healthcare providers; they also include public entities and organizations involved in healthcare delivery. Furthermore, there is no mandate that they must store paper copies of all health records, as electronic health records are widely accepted and encouraged. Additionally, covered entities cannot freely share health information without limitations, as HIPAA imposes strict rules regarding when and how health information can be disclosed.

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