Are You Adhering to HIPAA Compliance?

The healthcare industry continues to be a prime target for cyberattacks due to the sensitive nature of health data. Over the past 14 years, healthcare has seen the most expensive data breaches across all industries, with the average breach costing $9.97 million in 2024.

To reduce the risk of breaches and maintain patient trust, the Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996. HIPAA establishes safeguards for protecting private health information (PHI), including medical records and personal identifiers. Compliance with HIPAA requires secure encryption, access controls, and regular audits to prevent data breaches. Implementing HIPAA rules isn't just a regulatory requirement — it’s key to maintaining patient trust.

Who must comply with HIPAA?

HIPAA compliance is mandated for organizations or third parties that handle PHI. Access to PHI is determined by an individual's role and their need for information, as governed by HIPAA regulations. Haphazard access to PHI can lead to identity theft, privacy breaches, and fraud. So it’s beneficial to restrict access to those who need it.

HIPAA rules apply to two primary entities:

• Covered entities: This includes healthcare providers (doctors, nurses), health insurers, and healthcare clearinghouses. These groups are directly responsible for complying with HIPAA regulations.
• Business associates: These are third-party providers, like billing companies or IT services, that manage PHI for covered entities. They must also adhere to HIPAA standards.

Benefits of HIPAA compliance:

Strong HIPAA compliance protects both patients and healthcare organizations from breaches. Patients gain peace of mind knowing their data is secure, while organizations protect themselves from potential legal penalties and loss in trust. Regular HIPAA training ensures staff understand and follow these regulations, reducing the risk of non-compliance.

• Enhanced data security: HIPAA mandates strict security measures, including encryption and access controls, which help safeguard sensitive patient information from unauthorized access and breaches.
• Patient privacy protection: HIPAA ensures that patients' personal and health information is kept confidential, building trust between patients and healthcare providers.
• Legal and regulatory compliance: By adhering to HIPAA, organizations can avoid costly fines and legal penalties, ensuring compliance with federal regulations.
• Improved healthcare operations: Implementing HIPAA standards improves overall data management and efficiency, reducing the risk of data loss or misuse within healthcare operations.
• Reputation protection: HIPAA compliance helps protect an organization’s reputation by demonstrating a commitment to safeguarding patient information, thereby enhancing patient trust and business credibility.

Telehealth, AI, and HIPAA: Emerging Challenges

The COVID-19 pandemic accelerated the adoption of telehealth, revolutionizing healthcare delivery. Telehealth usage peaked in April 2020, 38 times higher than pre-pandemic levels. While technology like telehealth and AI enhances care, it also introduces new challenges for HIPAA compliance. Without proper safeguards, these technologies can increase the risk of data breaches.

Secure Communication Channels

The use of technology – such as third-party services for communication, facilitating remote consultations, patient monitoring, and using cloud platforms for processing data – can lead to breaches of confidential health information. In such cases, use HIPAA-compliant email services such as Microsoft 365 or Hushmail that offer email encryption. Platforms such as Zoom for Healthcare and Doxy.me provide secure HIPAA-compliant video conferencing with end-to-end encryption. Services like Dropbox and Box for Healthcare are encrypted file sharing platforms configured for HIPAA.

Patient Consent and Data Usage

Patients need to be informed when AI or technology is being used to collect or analyze their data. Maintain transparency and consent to protect their rights and build trust. Healthcare providers may not always fully understand the tools they use, making it difficult to explain them clearly to patients or obtain proper consent. Any failure in communicating how data is used or securing explicit consent risks non-compliance and potential HIPAA violations.

Protecting ePHI during remote consultations

AI technologies must comply with HIPAA’s stringent requirements for protecting ePHI. To safeguard ePHI during virtual consultations, it’s essential to implement robust encryption, stronger user authentication mechanisms, HIPAA-compliant data protection tools, and secure storage. Ensuring that data remains secured throughout its lifecycle – collection, storage, and processing – requires continuous attention and oversight.

HIPAA compliance requirements

To avoid costly penalties, it’s important to understand what HIPAA covers and exactly what requirements your organization must meet in order to remain compliant. Here’s an overview of HIPAA requirements:

• HIPAA breach notification rule: Covered entities and business associates must notify affected individuals and media of any PHI breaches within 60 days of discovery. Notifications can be sent via mail or email.
• HIPAA privacy rule: This rule protects identifiable health information, regulating its use and disclosure. It defines 18 patient identifiers, such as names, Social Security numbers, and medical record numbers, to safeguard privacy.
• HIPAA security rule: Focused on protecting electronic PHI, this rule requires organizations to assess their security practices and implement appropriate safeguards, considering infrastructure, software complexity, and costs.
• Administrative safeguards: These include policies like risk assessments, emergency plans, and mandatory security training to protect ePHI.
• Physical safeguards: Measures to protect physical equipment and data from unauthorized access, including proper disposal of outdated hardware and maintaining confidentiality during telehealth consultations.
• Technical safeguards: Technologies like encryption, access controls, and two-factor authentication to prevent unauthorized access to ePHI.
• Business Associate Agreement (BAA): This written agreement ensures business associates handling PHI follow HIPAA standards. If they fail to comply, they face the same penalties as covered entities.

The cost of HIPAA violations

HIPAA violations can result in civil or criminal penalties. Common violations include unauthorized access to healthcare data, failing to conduct risk assessments, and improper disposal of ePHI. Civil penalties range from $64,000 per violation to $1.9 million for willful neglect.

In criminal cases, the Department of Justice handles penalties, which can include fines up to $250,000 and jail time. For example, in 2015, Anthem, Inc. faced a $16 million settlement as HIPAA settlement after the breach affected nearly 79 million individuals.

Take a look at the top ten HIPAA violations:

• Snooping on healthcare records
• Failure to perform exhaustive risk analysis
• Lack of a risk management process
• Denying patients’ access to health records
• Failure to enter HIPAA-compliant Business Associate Agreement (BAA)
• Insufficient ePHI access control
• Failure to encrypt or secure data
• Exceeding the 60-day deadline for issuing breach notifications
• Improper disposal of PHI
• Lack of HIPAA-certified employee training

Any violation to the HIPAA rules, no matter how small, can cause a penalty. More serious violations can even lead to criminal penalties. These violations are examined by the Department of Health and Human Services (HHS) Office of Civil Rights (OCR) who is responsible for setting the HIPAA standards.

Penalties for civil violations

Civil violations are categorized into four tiers based on severity. Tier 1 involves unintentional violations, such as sending medical bills to the wrong address, with fines up to $64,000 per violation. Tier 4, the most severe, involves willful neglect, such as failing to implement audit controls, with penalties reaching $1.9 million per violation.

Penalties for criminal violations

Criminal violations occur when PHI is knowingly misused. Tier 1 includes unauthorized disclosures, which can lead to a month in jail, three years of supervised release, and a $14,900 fine. Tier 3, the most severe, involves malicious intent, with penalties of up to $250,000 and jail time.

Beyond penalties: The impact of non-compliance

HIPAA violations can damage an organization’s reputation, erode patient trust, and lead to media scrutiny. In the long run these can reduce business opportunities and damage credibility along the way. In 2015, UCLA Health faced a $7.5 million settlement after a breach compromised the data of 4.5 million patients, significantly tarnishing its reputation amidst intense media scrutiny.

Best practices for continuous compliance

Continuous HIPAA compliance is essential for healthcare organizations to safeguard patient data, avoid substantial fines, and maintain trust between the patient and healthcare provider. Despite the complex security and privacy rules under HIPAA regulations, organizations must be careful and proactive in their due efforts.

The following are best practices for continuous HIPAA compliance:

• Regular audits and assessments: There should be regular evaluations conducted to detect risks and verify all the procedures that stick to HIPAA standards, addressing any possibly identified gaps.
• Implementing a culture of compliance: In a workspace where analyzing healthcare data is a regular part of their work requirement, ensuring that everyone from leadership to staff prioritize HIPAA standards and compliance should be a core value. Additionally, regular training should be conducted on HIPAA guidelines and breach prevention.
• Third-party risk management: External vendors that handle PHI should be continuously monitored to ensure their compliance and mitigating risks.
• Access control policies and addressing human error: Practices for allowing only the necessary personnel to access or authorize ePHI and revoke the access immediately after off-boarding. Minimizing common human mistakes is also essential to prevent data breaches, as studies show that human error is responsible for approximately 74% of data breaches.
• Balancing security and usability: When handling healthcare data and systems, organizations should integrate the HIPAA-compliant security protocols and security measures that do not disrupt operations and maintain optimal healthcare service.

Prepare for HIPAA with SecurityPal

With increasingly digitized healthcare systems, protecting sensitive information from unauthorized access is more important than ever. Privacy laws are crucial regardless of whether the intention behind the violation is malicious or not, unauthorized access to PHI can lead to serious consequences.

SecurityPal can help you streamline your customer assurance efforts and secure your compliance journey with 150+ security experts and 24/7 operations at the SOCC.