Confused about HIPAA and whether your business must comply with it? This article will explain HIPAA and the importance of complying with this complex federal law.

What is HIPAA?

HIPAA is the Health Insurance Portability and Accountability Act of 1996, which was signed into law by President Bill Clinton. The HITECH Act, which was signed by President Obama in 2009, updated HIPAA by outlining rules and penalties regarding breaches of private health information (PHI).

Among other provisions, HIPAA mandates that security measures be taken to protect PHI. HIPAA is split into five sections, or titles. HIPAA Title II, which is known as the Administrative Simplification provisions, is what most information technology (IT) professionals are referring to when they speak of “HIPAA compliance.”

Who must be HIPAA compliant? Does this only apply to doctors’ offices and hospitals?

HIPAA rules apply to two groups of organizations, known as “covered entities” and “business associates.” A “covered entity” is one of the following:

• A healthcare provider, such as a doctor’s office, pharmacy, nursing home, hospital or clinic that transmits “information in an electronic form in connection with a transaction for which HHS has adopted a standard.”
• A health plan, such as a private-sector health insurer, a government health program such as Medicaid, Medicare, or Tricare, a company health plan, or an HMO.
• A “healthcare clearinghouse,” which is an entity that processes health information received from another entity, such as a billing service or a community health information system.

A “business associate” is a person or an organization that performs tasks that involve the use or disclosure of PHI, such as:

• Laboratory facilities
• CPAs, attorneys, and other professionals with clients in the healthcare industry
• Medical billing and coding services
• IT providers, such as cloud hosting services, SaaS providers, and data centers, that are doing business in the healthcare industry

Subcontractors and the business associates of business associates must also comply with HIPAA rules.

What does HIPAA compliance entail?

The Administrative Simplification provisions in HIPAA Title II are split into five rules, including the HIPAA Privacy Rule and the HIPAA Security Rule.

The HIPAA Privacy Rule establishes national standards to protect PHI. It applies to all forms of records – electronic, oral, and written – and requires employers to implement PHI security procedures and ensure that all employees are trained on them. The HIPAA Security Rule applies to electronic protected health information (ePHI). It establishes national standards to protect ePHI and requires entities to implement administrative, physical, and technical safeguards of ePHI.

What happens if I’m not HIPAA compliant and a data breach occurs?

If your organization is not HIPAA compliant, and a breach of PHI occurs, the penalties can be severe, as can be the public relations fallout for your organization. You will be required to notify all affected patients of the breach, and this publicity could do irreparable damage to your organization’s reputation. Your organization could also face fines in excess of $1 million – and, in some cases, even criminal penalties.

What can I do to ensure that my organization is HIPAA compliant?

The best defense against a PHI breach is a good offense, and HIPAA requires that covered entities and business associates take a proactive approach to protecting patient data. In light of the financial penalties and potential PR nightmare associated with breaches of sensitive personal medical information, HIPAA compliance is serious business. Because few healthcare organizations have the in-house budget and expertise to manage HIPAA compliance, it is best to outsource this important function to a reputable cyber security firm.

Author's Bio: 

Michael Peters is the CEO of Lazarus Alliance, Inc., the Proactive Cyber Security™ firm, and Continuum GRC. He has served as an independent information security consultant, executive, researcher, and author. He is an internationally recognized and awarded security expert with years of IT and business leadership experience and many previous executive leadership positions.

He has contributed significantly to curriculum development for graduate degree programs in information security, advanced technology, cyberspace law, and privacy, and to industry standard professional certifications. He has been featured in many publications and broadcast media outlets as the “Go-to Guy” for executive leadership, information security, cyberspace law, and governance.