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HIPAA Compliance

  1. What is HIPAA Compliance?
  2. What are the HIPAA Compliance rules?
  3. Types of Entities under HIPAA Compliance
  4. Why do you need to be HIPAA Compliant?
  5. HIPAA Compliance Updates
  6. HIPAA Compliance Checklist
  7. HIPAA Compliance Violations
  8. Best Practices to meet HIPAA Compliance Mandates
  9. Summary

What is HIPAA Compliance?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law that mandated the development of international guidelines to safeguard sensitive patient health information from being disclosed without the patient’s knowledge or agreement. Legislation was passed to make the American healthcare system more effective at protecting patient information and healthcare records. It achieves this by establishing standards for the security and privacy of healthcare data. The U.S. Department of Health and Human Services (HHS) was mandated by HIPAA to develop new rules pertaining to this data. The Privacy Rule and Security Rule are the two documents that the HHS has released so far.

All personal health information (PHI) and electronic PHI (ePHI) must be handled in accordance with the Privacy and Security Rules. Any health-related data that contains personally identifiable information (PII) is referred to as personal health information (PHI) (name, address, health conditions). Furthermore, HIPAA prohibits healthcare institutions from asking for Social Security numbers (SSNs) as part of data collection.

What are the HIPAA Compliance rules?

Privacy Rule (2003)

The HIPAA Privacy Rule was initially implemented in 2003. Entities subject to the Privacy Rule include healthcare providers, clearinghouses, and other organizations involved in the health insurance industry. Business partners in the healthcare industry were added to the list in 2013. The Privacy Rule establishes guidelines to protect individuals’ medical records and other personal health information. It gives patients more control over their health information and sets boundaries on the use and release of health records.

A key objective of the Privacy Rule is to guarantee that critical healthcare data is secured while permitting the flow of health-related information required to deliver and promote high-quality healthcare, as well as to safeguard the well-being of the public at large. The Privacy Rule aims to prevent entities from disclosing more information than necessary in order to protect the privacy of those seeking medical treatment and recovery.

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Security Rule (2005)

The HIPAA Security Rule lays out requirements for guarding electronic PHI that a covered entity generates, uses, acquires, or maintains. It focuses on regulations pertaining to protecting electronic data, whereas the Privacy Rule regulates the privacy and confidentiality of all PHI, including oral, written, and electronic PHI. One of the main objectives of the Security Rule is to safeguard individuals’ PHI while enabling healthcare organizations to innovate and implement cutting-edge technologies that enhance the effectiveness and quality of patient treatment.

The Security Rule takes into account adaptability, scalability, and technology neutrality. This indicates that there are no particular restrictions on the kinds of technologies that covered entities must employ. Instead, they have the freedom to employ any security measures that enable them to properly implement the standards. The covered entity is responsible for determining which security measures and technologies are optimal for its business.

HIPAA Enforcement Rule (2006)

The HIPAA Enforcement Rule enables HHS to look into complaints filed against covered entities who aren’t abiding by HIPAA regulations. Additionally, it grants HHS the authority to sanction these organizations for violations of electronically protected health information. It is developed by the US Department of Health and Human Services (HHS) Secretary, and the Office of Civil Rights (OCR) is in charge of enforcing it. It aims to track down ePHI handlers involved in breaches and penalize them once found responsible.

A penalty will be applied in the event of non-compliance, depending on the seriousness. Financial penalties might be as high as $1.5 million. You won’t be subject to the HIPAA enforcement statute as long as you abide by these requirements.

HITECH Act (2009)

The Health Information Technology for Economic and Clinical Health Act (HITECH) is a provision of the American Recovery and Reinvestment Act (ARRA), which was passed during the Obama administration as a means of boosting the economy. HITECH reinforced the privacy and security provisions of the Health Information Portability and Accountability Act of 1996 and encouraged the development and use of health information technology. It also allowed patients to take a proactive interest in their health.

The HITECH Act aids in ensuring that healthcare institutions and their business partners adhere to the HIPAA Privacy and Security Rules, put security measures in place to protect patient health information, limit how it is used and disclosed, and fulfill their commitment to give patients copies of their medical records upon request.

The Breach Notification Rule (2009)

According to the HIPAA Breach Notification Rule, covered entities and business partners must notify affected individuals when there is an insecure PHI breach. Any improper use or disclosure of PHI in accordance with the Privacy and Security Rules constitutes a breach. The organization must undertake a risk assessment after a potential breach to ascertain the extent and impact of the occurrence and to determine whether notifications are necessary.
The following elements should serve as the basis for the risk assessment:

  • The type and extent of the PHI concerned
  • The unauthorized entity who used the PHI or to whom the disclosure was made
  • The level of risk mitigation achieved with respect to PHI

Unless it can show a low chance that PHI was compromised, a covered entity must notify the appropriate authorities. Individual, media, and secretary notices fall under the category of breach notifications.

Omnibus Final Rule (2013)

The Omnibus Rule indicates that business partners, or any company that generates, receives, keeps, or transmits PHI on behalf of a covered entity, must maintain compliance with the Privacy Rule and Security Rule and are responsible for any HIPAA violations. While handling PHI or ePHI, these business associates must sign a business associate agreement (BAA) recognizing necessary HIPAA compliance. It includes revisions and changes to every rule that has already been approved. The Security, Privacy, Breach Notification, and Enforcement Rules have been modified in order to improve the security and confidentiality of data exchange. The Omnibus Rule made all the requirements for HIPAA and HITECH compliance available in a single, comprehensive regulation.

Types of Entities under HIPAA Compliance

Covered Entities: HIPAA compliance is required of all healthcare businesses and institutions that collect personal health information (PHI). This covers healthcare facilities, like hospitals, clinics, pharmacies, nursing homes, etc. Enterprises that provide healthcare plans, such as health insurance companies, group health programs, and healthcare clearinghouses that translate PHI data into a standard format for electronic communication need to be HIPAA compliant.

Business Associates: Any person or organization that carries out specific tasks or obligations that include utilizing or disclosing PHI, either on behalf of or as a service provider to a covered entity, is referred to as a business associate. Business partners can provide services to covered entities without having to engage with patients directly. But in order to guarantee that their partnered business associates protect the shared PHI following HIPAA standards, the covered entities must sign a business associate agreement (BAA). Business partners are also fully responsible for any HIPAA violations and are subject to the same sanctions as covered entities.

Sub-Contractors: An individual or organization that generates, maintains, and sends health information on behalf of a business associate is referred to as a subcontractor. A HIPAA subcontractor has the same legal obligations as any of the business associates.

Hybrid Entities: A hybrid entity typically operates as a business and performs both HIPAA-covered and non-covered functions. For instance, any sizable business that offers its employees a self-insured healthcare plan is a hybrid entity. In this organization, the part dealing with the healthcare component (healthcare insurance, which is a covered entity) is subject to HIPAA compliance. A hybrid corporation must ensure that the PHI is restricted to the HIPAA-compliant segments.

Researchers: If patients have given their agreement to disclose and use their PHI for research, covered entities are permitted by HIPAA standards to share that information with researchers. Such situations do not necessitate the execution of a business associate agreement. Before revealing the PHI, the covered entity must create and sign a data usage agreement with the partnered researcher.

Why do you need to be HIPAA Compliant?

The Department of Health and Human Services (HHS) notes that HIPAA compliance is more crucial than ever as healthcare providers and other organizations, that deal with PHI, transition to digital operations, including computerized physician order entry (CPOE) systems, electronic health records (EHR), and radiology, pharmacy, and laboratory systems. Similarly, health insurance plans offer access to applications for care management and self-service. All of these evolving technologies boost productivity and mobility, but they also significantly raise security threats for healthcare data.

Any company managing PHI or healthcare data must make sure that their security policies and software controls adhere to the HIPAA Security and Privacy Rules. These regulations permit covered entities to process, store and transmit PHI without worrying about civil or criminal penalties.

HIPAA regulations standardize the use of IT and software security controls. Without these regulations, PHI-processing firms are not subject to any explicit standards for safeguarding patient data (i.e., for maintaining the confidentiality, integrity, and availability of the data).
The U.S. federal government’s enforcement of HIPAA regulations ensures that businesses treat the implementation of PHI controls seriously and that American healthcare customers have a channel to turn to if their PHI is treated improperly.

HIPAA Compliance Updates

With the introduction of the HIPAA Privacy and Security Rules, there are now restrictions on the uses and disclosures of protected health information as well as new patient rights and minimum security requirements. The HITECH Act was incorporated after these HIPAA changes, and it resulted in the creation of the Breach Notification Rule in 2009 and the Omnibus Final Rule in 2013. Such extensive HIPAA revisions imposed a heavy burden on HIPAA-covered companies, and it took a lot of time and effort to implement new policies and procedures to maintain HIPAA compliance.
It has been a decade since the last major update was implemented. Several HIPAA-related problems have emerged over the last ten years as a result of evolving working procedures and technological advancements.

HIPAA Compliance Checklist

A HIPAA compliance checklist is designed to make sure enterprises subject to the Administrative Simplification requirements are aware of which provisions they must follow and how to effectively achieve and maintain HIPAA compliance. To make sure business partners are HIPAA compliant when necessary, it’s crucial for firms to understand their compliance duties. Critical checklist items around HIPAA Compliance include:



  • Determine whether the Privacy Rule applies to you
  • Know the right type of data you must secure
  • Understand the Security Rule and types of safeguards
  • Recognize the reasons for HIPAA non-compliance or violations
  • Keep track of all actions taken to secure data
  • Create breach notifications in the event of data loss
  • Implement technical protections to prevent unauthorized ePHI access

HIPAA Compliance Violations

The regulatory authority will monitor your actions if you violate HIPAA rules, and if you are found in violation, you will be required to pay penalties. The Consolidated Omnibus Budget Reconciliation Act (COBRA), which added extra fines to encourage widespread compliance, reinforced these restrictions.

For HIPAA noncompliance, the Office of Civil Rights has the authority to levy a number of tier-based fines. Whether the covered entity/business associate violated the HIPAA rules willfully or accidentally will determine how much of a fine is assessed.

For first-tier violations, the fine can range from $100 for each uninformed violation to a maximum of $25,000 for repeated offenses. However, based on the regulatory body’s evaluation, this sum can rise to $50,000 for each infraction and a maximum of $1.5 million annually. If you are subject to the second-tier penalty, you must pay a maximum fine of $1000 per violation and a maximum yearly fine of $100,000. The maximum fine for any justifiable reason for violation is $50,000, with a cap of $1.5 million per year, just like in the first tier.

Some of the most common instances of HIPAA compliance violations include:

  • Failure to secure medical records
  • Data breaches
  • Lack of strong encryption and authentication
  • Incorrect disposal of patient data
  • Lack of employee training
  • Unintentional disclosure of medical records
  • Missed risk analysis
  • Refusal to provide access to patient data
  • Entering into a HIPAA non-compliant Business Associate Agreement
  • Disclosure of PHI to a third party

Best Practices to meet HIPAA Compliance Mandates

Strong authentication, encryption and access control: Access control is a critical component of data security that determines who can access and use your company’s information and resources. Access control policies make sure users are who they say they are and have the appropriate access to company data. Authenticating device and user identity will prevent unauthorized access to critical data and sensitive ePHI. Machine identities enable critical authentication, access, and encryption, thereby defending against security vulnerabilities. Public key encryption is vital for mutual authentication. It’s important to implement appropriate security measures to prevent encryption keys and digital certificates from being compromised.

Exhaustive risk analysis: Organizations must conduct a risk analysis at least once a year in compliance with HIPAA. Regular risk analyses can help you identify potential vulnerabilities and develop a cybersecurity plan that is tailored to your specific requirements. Every organization is vulnerable to certain security risks, whether it be for PII or ePHI, therefore it’s critical to assess your situation and develop a credible plan to address any security concerns and blind spots.

Well-documented policies and procedures: You must comply with HIPAA and have officially defined policies and procedures for ePHI protection. All members of your company who handle ePHI must have access to the most recent version of your policies and procedures.

Employee training: By law, HIPAA compliance training is necessary for anybody who handles personal health information (PHI). This covers all medical professionals who deal with patient information, such as doctors, nurses, administrators, front desk staff, rotating residents, etc.

Strong network security: Install firewalls to block unauthorized access to computers and networks. Some of the surefire ways to defend against network-related threats include: monitoring firewall performance, updating passwords regularly, creating strong passwords, implementing multi-factor authentication, using updated protocols and software versions, installing anti-virus software, and relying on advanced endpoint detection.


HIPAA has created a paradigm shift in how the healthcare sector uses, shares, and preserves patient health information. It stipulates that the covered entities and business partners must uphold a variety of patients’ legally enforceable rights. Being HIPAA compliant will not only save you from hefty penalties but also protect your organization from security risks and advanced cyber threats targeting sensitive patient records.

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