HIPAA Readiness Statement The upcoming HIPAA regulations have increased the pace of changes in the already dynamic healthcare industry. Since we do have access to protected health information during our day-to day activities, we must comply with certain HIPAA privacy regulations. We are committed to complying with HIPAA regulations, and included as part of our software license agreement is a pledge that we will make any needed changes to our software products in accordance with mandated regulations. At Digital MD Systems, we realize that as clinicians, this will be a major concern to you now and in the future. We are fully involved in the HIPAA process, and as new regulations come out, our software will be updated to keep you current. We realize that as software providers to the healthcare industry, it is our job to make sure our software helps you observer the HIPAA regulations. The Health Insurance Portability and Accountability Act (HIPAA) are radically altering the way electronic healthcare information is processed. Security and privacy have become increasingly important, and everyone is asserting themselves to conform to the new standards. After reviewing tens of thousands of comments on its proposed rules, the U.S. Department of Health and Human Services has recently published final rules to establish national formats and data set standards for electronic transactions, standards to ensure the security of electronic health data, and policies to protect the confidentiality of medical information. HIPAA’s standards limit the non-consensual use and release of confidential health information, give new rights to patients regarding their access to medical records, place restrictions on the dissemination of health information, and establish civil and criminal sanctions on improper use or disclosure of health information. These standards cover electronic, oral, and paper records and communications. The entire suite of Digital MD Systems products comply with the standards of the Privacy Standard rulings. Digital MD Systems will continue to closely follow the development of the HIPAA requirements for security, privacy, and electronic attachments. We are assessing our electronic health record software, Doc, to identify any necessary changes needed to the software. We will quickly make these changes to conform to the new standards as the final rules are published. It is Digital MD Systems' policy to maintain compliance with applicable HIPAA regulations as they are issued and become effective and to incorporate them into future product releases. Digital MD Systems makes available all product releases to customers who have current contracts.