You've lost me. What, exactly, was I incorrect about? Have you read the HIPAA Privacy Rule? With the background information, it's over 1500 pages long (in Word format). Have you read it? I have. I've attended three workshops giving an overview and the details of HIPAA; I've read the HHS guidance on the original rule; I've read the Workgroup for Electronic Data Interchange white paper on implementing the Privacy Rule in a small practice office; I've put together a training on HIPAA for health care professionals. If my interpretation is wrong, I'd sincerely like to know what, and how.
In terms of "what is occurring," the Privacy Rule hasn't taken effect yet. The compliance date is April 14, 2003.