The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law that requires healthcare organizations to protect sensitive patient health information or Protected Health Information (PHI).

HIPAA establishes standards for the privacy and security of electronic Protected Health Information (ePHI). The primary goal of HIPAA is to safeguard medical records and individually identifiable health information from being shared without patient consent.

To be HIPAA compliant, covered entities like healthcare providers, health plans, healthcare clearinghouses, and their business associates must implement physical, technical, and administrative safeguards to establish access control and risk assessment functionality. This involves security measures like staff training, audit controls, and compliance tools.

Organizations that fail to comply with HIPAA regulations face penalties, reputational damage, and loss of patient trust. In today’s digital era, HIPAA compliance is crucial for covered entities and business associates in healthcare to keep PHI and ePHI secure from unauthorized access or disclosure and remain compliant with HIPAA’s Security Rule, Privacy Rule, and Breach Notification Rule.

HIPAA Compliance, Defined

The HIPAA was enacted by Congress in 1996 to prevent medical fraud and to assure the security of Protected Health Information (PHI), such as names, Social Security numbers, medical records, financial information, electronic health transactions, and code sets. The U.S. Department of Health & Human Services (HHS) manages the law.

PHI stored, transmitted, or accessed electronically, also known as electronic Protected Health Information (ePHI), falls under HIPAA regulations. Regulation of ePHI is especially significant given the modern threat landscape and the increasing number of data breaches hitting the healthcare sector today.

As mentioned in the HIPAA compliance guide, four fundamental rules are required for compliance: the HIPAA Privacy Rule, the HIPAA Security Rule, the Omnibus Rule, and the Breach Notification Rule.

HIPAA is enforced by the HHS’ Office for Civil Rights (OCR) in three ways:

  • Investigating any filed complaints;
  • Conducting compliance reviews to determine whether the covered entities and their business associates remain HIPAA-compliant; and

If the integrity of a covered entity’s PHI or ePHI is compromised due to a data breach, the covered entity or its business associates may be in HIPAA violation. Common examples of HIPAA violations include ransomware attacks, physical on-site break-ins, negligence in transmitting PHI or ePHI, and stolen devices or hard drives that contain ePHI. HIPAA violations can result in significant financial penalties, reputational damage, and loss of trust from patients.

Examples of Compliance-Related HIPAA Violations

Healthcare organizations can encounter HIPAA compliance challenges and risk Protected Health Information (PHI) violations in various ways. Some examples of common HIPAA violations include:

  • An employee emails identifiable patient health information or PHI to the incorrect recipient due to human error. This would be considered improper disclosure of PHI under HIPAA regulations.
  • A doctor openly discusses a patient’s medical records or individually identifiable health information with another provider in a public area where others may overhear it. This violates patient privacy rights under the HIPAA Privacy Rule.
  • A hospital is not providing adequate PHI security standards and compliance training for new hires. Lacking proper training on safeguarding PHI constitutes insufficient administrative safeguards per the HIPAA Security Rule.
  • A medical practice must regularly audit its systems and controls to identify risks and vulnerabilities. Failing to conduct risk analysis and implementing audit controls violates HIPAA.
  • A healthcare app developer must secure its IT systems and electronically Protected Health Information (ePHI) with encryption. Unencrypted ePHI goes against the need for technical safeguards under HIPAA.
  • A health insurer must properly secure patient data containing PHI during an office relocation. This may cause impermissible disclosure of PHI if records are misplaced.
  • A nurse improperly disposed of physical medical records in a dumpster accessible to the public instead of shredding them. Poor disposal processes can lead to PHI privacy breaches.

Consequences of HIPAA violations

HIPAA sets stringent guidelines for covered entities like healthcare providers, health plans, healthcare clearinghouses, and business associates. Noncompliance with HIPAA regulations can severely affect healthcare organizations, individuals, and third-party service providers.

  • Civil and Criminal Penalties: HIPAA violations can lead to substantial civil penalties. Fines for noncompliance range from $100 to $50,000 per violation, with an annual maximum of $1.5 million. In case of HIPAA violations, the Department of Health and Human Services (HHS) can also pursue criminal charges, which may result in fines of up to $250,000 and imprisonment for up to 10 years.
  • Reputation Damage: HIPAA breaches are often disclosed to the public, causing patients to lose trust in the entities entrusted with their medical records. Rebuilding trust can be an arduous process for healthcare providers and healthcare organizations.
  • Legal Liability: Individuals whose privacy is compromised due to HIPAA violations may initiate lawsuits against healthcare entities, potentially leading to significant settlements or judgments against the offending parties.
  • Loss of License or Certification: Healthcare providers and staff could face disciplinary actions, including the suspension or revocation of their licenses or certifications, jeopardizing their ability to practice.
  • Corrective Action Plans: Besides financial penalties, entities found violating HIPAA may be compelled to establish HIPAA compliance programs and security measures to rectify shortcomings in safeguarding electronic Protected Health Information (ePHI).
  • Monitoring and Auditing: Post-violation, organizations may undergo stringent monitoring and audits by the Office for Civil Rights (OCR), a division of the HHS, which can be costly and disruptive.
  • Loss of Business Opportunities: HIPAA violations may hinder healthcare organizations from forming collaborations, securing contracts with insurers, or establishing partnerships due to concerns regarding data security and HIPAA compliance.

Who Must Be HIPAA-Compliant?

All covered entities and their business associates must demonstrate HIPAA compliance. They must verify that they comply with current national standards and have the necessary access controls to maintain data privacy and security. A business associate is any entity or person that discloses Protected Health Information (PHI) or provides services to a covered entity.

More simply: any organization that stores, transmits, or has access to PHI or ePHI must achieve HIPAA compliance.

What Are HIPAA Covered Entities?

According to the HHS, covered entities are individuals, organizations, and agencies that fall under one of three categories: healthcare providers, health plans, or healthcare clearinghouses.

  • Healthcare providers include doctors, clinics, psychologists, dentists, and other medical practitioners, as long as they transmit information electronically “in connection with a transaction for which HHS has adopted a standard.”
  • Health plans include health insurance companies, HMOs, company health plans, and government programs that pay for health care (such as Medicare).
  • Healthcare clearinghouses include any entity that processes nonstandard health information received from another entity.

Does My Organization Need to Comply With HIPAA?

If your organization falls under the umbrella of a “covered entity” or its “business associate,” then yes, it must comply with HIPAA.

The term “business associates” can be broadly applied, but in this case, it includes any person or entity that handles PHI or ePHI as part of their products or services. For example, if a SaaS provider has developed a product to help medical clinics build an online patient portal, you must be HIPAA-compliant.

How Has COVID-19 Affected HIPAA Compliance?

The COVID-19 pandemic has forced the healthcare industry to embrace the digital transformation of many business and medical processes. Healthcare providers have been forced to conduct their appointments via telephone or video conferencing, which increases the risk of ePHI being breached.

Covered entities that fall under health plans (health insurance companies, for example) have been significantly affected because the massive number of COVID-19 cases has led to an equally huge number of health claims. As more individuals get sick, more insurance claims are filed, which means that health insurance companies must store significantly more Protected Health Information.

These challenges mean that all covered entities and their business associates must keep on top of any change in HIPAA regulations and ensure that they enforce HIPAA compliance through external and internal policies and controls.

In January 2021, the OCR released its decision not to penalize HIPAA violations related explicitly to the good-faith use of web-based schedule applications to book vaccination appointments.

Tools to Manage HIPAA Compliance

Achieving HIPAA compliance isn’t easy; there are 115 pages filled with detailed requirements and rules that your business must comply with. While direct healthcare providers are familiar with the intricacies of HIPAA rules, this may not be the case for entities that fall under the health plan umbrella or for business associates that aren’t directly within the healthcare sector but may have access to PHI as a result of doing business with any covered entities.

As such, several software applications and tools are designed to help your organization maintain HIPAA compliance, such as Customer Relationship Management (CRM) platforms and integrated messaging platforms to transmit ePHI.

Organizations can also, however, engage an all-in-one HIPAA compliance management software to oversee audit management, reporting, policy training, and risk assessment & management.

Maintain Your HIPAA Compliance with ZenGRC

RiskOptics’ ZenGRC software can perform self-audits for HIPAA, provides intuitive dashboards to showcase gaps in compliance, keeps track of compliance efforts by diligently storing documents in a single repository for easy access during audits, and can auto-update itself with the latest changes in HIPAA regulations to ensure your organization can always maintain its compliance program updated.

Your clients trust you with their most personal health information, so a trustworthy HIPAA compliance software solution can help you retain your clients’ trust and save you millions of dollars that may result from potential HIPAA violations.

To see how ZenGRC can help with HIPAA compliance, contact us today for your free consultation.

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