HIPAA Compliance and its impact on Healthcare Software Service Providers

HIPAA Compliance and its impact on Healthcare Software Service Providers Img
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The age of digitalization has proved to be a boon for the businesses. Simultaneously, it has unveiled a lot of challenges for them. One of those which has been faced ferociously by the businesses is – the issue of cybersecurity. It has become a crucial issue for many organizations as well as individuals across the globe. Anyone can become the target of cyber-attackers, who can exploit the vulnerabilities of the information system. At present, healthcare information processing and Health Insurance industries are some of the top-notch targets of the cyber-attackers.

In order to facilitate the healthcare organizations and help them in preventing the cyber attacks, HIPAA was introduced. HIPAA stands for Health Insurance Portability and Accountability Act. It was first introduced in 1996 with some changes being made in the years after introduction. It has been segmented into two sections. The first section illustrates the provision of health insurance coverage to people who either lose or change their jobs. The second section broadly deals with standardization of healthcare-related information systems for electronic data interchange.

The latter section is of more importance for Healthcare Information processing software service providers and organizations. It requires the organization to comply with the norms of HIPAA. The law has proved to be of greater importance in recent years with the increase in the number of health data breaches; caused due to various cyber-attacks, malware attack, human errors, inadequate IT infra, poor IT policy, etc.

Why is HIPAA needed?

Healthcare organizations hold the most sensitive information about an individual like name, parent’s name, birthplace, any critical disease, health issues, etc. But, due to lack of proper IT organization and other factors, health industries have become the easiest targets for the hackers. It has now been plagued by innumerous cybersecurity related issues.

In a recent study conducted by Vectra Networks in the healthcare industry, 164 threats have been detected per 1000 host devices.

These issues might be raised due to malware, that could hamper system integrity and patient’s privacy. Or an issue can be raised due to DDoS (distributed denial of service) attacks, which interrupt facilities such as patient’s care. Other industries might also face these attacks, but for the healthcare sector, the aftermaths could be more than financial loss or privacy breach. For this reason, HIPAA came into existence.

Important HIPAA terminologies

Before proceeding with how HIPAA compliance will impact the businesses, we would like you to brush up your knowledge about some terminologies related to HIPAA.

Covered Entities

These are the individuals or organizations that implement HIPAA rules and regulations. For instance, Health Care Plans, Health Clearinghouses, some of the health care providers who conduct financial transactions, administrative works, electronically.

Protected Health Information

It is the information related to an individual’s physical or mental health, which might be from his past, present or future. This information is the important information relating to the identity of the person; for instance, name, address, phone number, diagnosis records, account numbers, phone numbers, images, etc.

Treatment, Payment and Health Care Operations (TPO)

These are the various uses of the Protected Health Information (PHI), where HIPAA does not require any authorization.

Notice of Privacy Practice (NPP)

It is a notice which is provided to the patients regarding the use and disclosure of their PHI.

Impact of HIPAA Compliance

The compliance with HIPAA requires organizations to implement various security standards when transmitting and storing the information related to personal health.  HIPAA defines some standardized formats for transmission and storage of personal health information.

Businesses or organizations involved in the creation, maintenance or transmission of “protected health information” are required to comply with the norms of HIPAA.

These businesses or IT service providers of a health organization are commonly termed as business associates. These business associates are required to take care of certain pointers while dealing with PHI from health organizations.


HIPAA compliance includes regulations regarding hardware, which are related to the healthcare industry. Therefore, healthcare organizations should work with their respective business associates to implement different policies regarding hardware and other electronic devices. These policies include risk evaluation methods, storage and security measures, etc.


The applications or software storing and transmitting PHI data are subject to HIPAA compliance. Cyber-attacks on the software are one of the main reasons behind the rise of HIPAA and privacy regulations in the healthcare sector.

Data storage and encryption:

The data of an organization is either hosted on the cloud or on dedicated/physical servers. In the health industry, the data is stored on the servers. Hence, IT providers associated with healthcare organizations have to comply with HIPAA regulations. Portable devices also come under the umbrella of HIPAA regulations.  Further, the IT providers have to comply with various encryption policies.

Prevent Violation of HIPAA compliance

HIPAA compliant IT providers are one of the ways to prevent the violation of this regulation. At present, healthcare organizations are more responsible for HIPAA compliance than their business associates.

Train Employees

The staff must be trained so that they don’t use PHI for personal gain. Those organizations whose employees mishandle public health information are subject to fines, HIPAA violations and even prison.

Timely audit, encryption and data storage regulation

Healthcare organizations should conduct audits in a timely manner and also be ready for OCR HIPAA audit (Office for Civil Rights HIPAA Audit). Further, they should adhere to the latest standards of HIPAA, which include adopting of new IT and communication technology and practices. This covers hardware, software, data encryption, etc.

Breach Notification

Implementing encryption reduces the negative effects of the data breach. But, a lapse in security breach notification can lead to another HIPAA violation. Therefore, it is required for health organizations to develop a process for notifying individuals and the concerned authority about the data breach.


The non-compliance of HIPAA imposes financial and legal penalties. This has driven the financial and IT departments towards validating the compliance. Further, with the European Union emphasizing on the data security and introducing GDPR, it has become more essential for the IT organizations to ensure data security.

If you have any thoughts regarding compliance with HIPAA, feel free to comment below.

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