Treatment, Payment and Operation (TPO)

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A patient’s access to treatment and their subsequent payment are components that make healthcare operations run smoothly. Similarly, health care operations themselves – administrative, financial, legal, et c- support both treatment and payment. These core activities of health – treatment, payment and operation – are explained and defined in the HIPAA Privacy Rule at 45 CFR 164.501 on the Department of Health and Human Services website. [1]


“Treatment” generally means the provision, coordination, or management of health care and related services among health care providers or by a health care provider with a third party, consultation between health care providers regarding a patient, or the referral of a patient from one health care provider to another. [1]


“Payment” encompasses the various activities of health care providers to obtain payment or be reimbursed for their services and of a health plan to obtain premiums, to fulfill their coverage responsibilities and provide benefits under the plan, and to obtain or provide reimbursement for the provision of health care. In addition to the general definition, the Privacy Rule provides examples of common payment activities which include, but are not limited to:

  • Determining eligibility or coverage under a plan and adjudicating claims
  • Risk adjustments
  • Billing and collection activities
  • Reviewing health care services for medical necessity, coverage, justification of charges, and the like;
  • Utilization review activities
  • Disclosures to consumer reporting agencies (limited to specified identifying information about the individual, his or her payment history, and identifying information about the covered entity). [1]

Health care operations

"Health care operations" are certain administrative, financial, legal, and quality improvement activities of a covered entity that are necessary to run its business and to support the core functions of treatment and payment. These activities, which are limited to the activities listed in the definition of “health care operations” at 45 CFR 164.501, include:

  • Conducting quality assessment and improvement activities, population-based activities relating to improving health or reducing health care costs, and case management and care coordination;
  • Reviewing the competence or qualifications of health care professionals, evaluating provider and health plan performance, training health care and non-health care professionals, accreditation, certification, licensing, or credentialing activities;
  • Underwriting and other activities relating to the creation, renewal, or replacement of a contract of health insurance or health benefits, and ceding, securing, or placing a contract for reinsurance of risk relating to health care claims
  • Conducting or arranging for medical review, legal, and auditing services, including fraud and abuse detection and compliance programs;
  • Business planning and development, such as conducting cost-management and planning analyses related to managing and operating the entity; and
  • Business management and general administrative activities, including those related to implementing and complying with the Privacy Rule and other Administrative Simplification Rules, customer service, resolution of internal grievances, sale or transfer of assets, creating de-identified health information or a limited data set, and fundraising for the benefit of the covered entity. General Provisions at 45 CFR 164.506. [1]

More Information

More information about a covered entity’s rights without the individual’s authorization, policies and procedures to limit the disclosures, the consent required from an individual and notice of privacy practices can be found on the Department of Health and Human Services. [2]


  1. 1.0 1.1 1.2 1.3 Health and Human Services: Uses and Disclosures for Treatment, Payment, and Health Care Operations
  2. US Department of Health and Human Services