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Implications of US Patriot and Bank Secrecy Acts on Hospitals

By Dr. David E. Marcinko; MBA, CMP™

By Hope R. Hetico; RN, MHA, CMP™  

With the recent popularity and growth of personal health insurance plans (PHIPs), health savings accounts (HSAs) and / or medical savings accounts (MSAs), compliance with the USA PATRIOT Act has become an important issue for these new health insurance products.  

These insurance plans place financial services organizations into relationships with shared information institutions like hospitals, healthcare organizations, medical clinics and patient clients.

The Online Connection 

This happens because many, perhaps even the majority of health insurance plans are opened online as patients and insurance company clients use Internet search engines to find the “best” policy type to meet their needs.  

Appropriately, banks, healthcare entities, and hospitals are working with insurance companies, trust companies, banks and broker-dealers to offer identity-compliant and integrated insurance plan products. 

Verifications that these clients are who they say they are, is as paramount as monitoring their activity. 

Example:  

Section 314(b) of the US Patriot Act permits financial institutions and health insurance companies – upon providing notice to the United States Department of the Treasury – to share patient and related information with one another in order to identify and report to the federal government activities that may involve money laundering or terrorist activity.  

The US Patriot Act 

The US Patriot Act aims to partially accomplish this through three critical goals:  

1. First, it gives investigators familiar tools to use against a new threat.
2. Second, it breaks down a wall that has prevented information sharing between agencies.
3. Third, it updates U.S. laws to respond to the current Internet environment.  

Bank Secrecy Act, PHIPs, MSAs and HSAs 

For additional compliance security, The USA Patriot Act also amended the Bank Secrecy Act [BSA] to give the federal government enhanced authority to identify, deter and punish money laundering and related terrorist financing activities.  

Assessment 

Whatever the financial outlays required for insurance/financial organizational compliance, it may result in very large savings later if affected hospital assets and patient health insurance information is safeguarded against attacks of virtual or real assets. 

Conclusion 

And so, what is your opinion on the above health law and policy? 

Institutional information: www.HealthcareFinancials.com 

Terminology: www.HealthDictionarySeries.com 

Related reference: Marc B. Royo and David B. Nash. “Sarbanes-Oxley and Not-for-Profit Hospitals: Current Issues and Future Prospects.” American Journal of Medical Quality: Vol. 23, No. 1, 70-72, February 2008.

Filed under: Health Insurance, Practice Management, Risk Management | Tagged: Bank Secrecy Act, banks, david marcinko, hope hetico, hospitals, HSA, money laundering, MSA, Patriot Act, personal health insurance plans, PHIPs, Sarbanes, terrorist, trust companies, US Treasury Department, USTD | 1 Comment »