RESUMEN
The administrative simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 are considered to have a considerable impact on the health care industry in the United States of America. The HIPAA-mandated electronic transactions using Electronic Data Interchange (henceforth EDI) methods have brought significant issues on privacy, confidentiality and security for individually identifiable information not to mention technical issues. The purpose of this paper is to facilitate the understanding of those issues surrounding the administrative simplification part of HIPAA. Toward this goal, the paper provides an overview of HIPAA through a systematic approach of understanding its evolution and its requirements.