HIPAA Compliance? Why do you need it?

4 min read

Since 1996, the Health Insurance Portability and Accountability Act (HIPAA) has sought to “prevent healthcare fraud, guarantee the security of all ‘safe health records,’ and limit access to health data to designated individuals.” Historically, this law was enacted to facilitate the transformation of the healthcare sector from paper records to digital copies of patients’ health information. Since then, HIPAA has been an instrument in streamlining several administrative health functions. Additionally, HIPAA compliance ensures the safe sharing of confidential health information.

If you got interested and want to find out further more about HIPAA and what kind of rule do you need to follow, then keep reading this article! We’ve prepared a lot of useful information regarding HIPAA compliance and the implementation practices tips.

What is HIPAA?

HIPAA Compliance
What is HIPAA Compliance?

HIPAA is a legal action made by the US congress, which all healthcare organizations must incorporate into their operations to safeguard the privacy, protection, and dignity of protected health information. Before we continue, three additional acronyms that are connected with HIPAA should be highlighted:

  1. PHI is an acronym for Protected Health Information.
  2. HHS is an acronym for the Department of Health and Human Services.
  3. OCR is an acronym for the Office for Civil Rights.

The HIPAA regulations established the legal basis for the use and dissemination of protected health information (PHI). Compliance is regulated by the Department of Health and Human Services (HHS) and enforced by the Office for Civil Rights (OCR).

Decoding PHI

If HHS and OCR are self-explanatory, PHI is not. PHI is a term that refers to the combination of an individual’s identifying information, such as their name or address or any health-related data obtained from a healthcare professional or facility.

PHI is described as information that contains both personally identifiable information (PII) and health information about the patient. For example, if we know that Max Powers is diagnosed with obsessive-compulsive disorder, that’s PHI. Why? Because it contains PII – Max Powers, and also health information – obsessive-compulsive disorder. Max’s PHI will, therefore, be covered by HIPAA.

Why HIPAA is so important?

There are countless reasons why HIPAA is considered so significant, but the main takeaways are these: it helps to protect privacy and confidentiality; it gives patients access to their healthcare data and prevents fraudulent activity. So it all comes down to data protection.

For healthcare organizations, HIPAA offers a mechanism that protects the owners of the personal information and those can view specific health data while limiting their access permissions. Any company dealing with PHI must have physical and network security measures.

HIPAA exists to protect individuals and to ensure everyone has complete access to a copy of their medical records. It is essentially a civil rights concern. It mandates privacy protection for anyone who produces, stores, transmits, or uses personally identifiable health information. All healthcare entities and companies which manage, store, retain, or transmit patient health information are required to be in full compliance with the regulations of the HIPAA law.

HIPAA Violations

Inability to comprehend HIPAA regulations or deliberate violations of security protocols would result in significant fines and mandatory institutional reorganization.

  1. Unknown Violation: from $100 to $50,000 per record if the provider was unaware of the infringement or may not have known about it.
  2. Fair Cause: $1,000 to $50,000 per record whether the provider knew or reasonably should have known (like repeat violations)
  3. Willful Neglect: $10,000 to $50,000 per record if the provider behaved willfully and promptly fixed the issue.
  4. Unresolved: $50,000 to $1.5 million if the provider behaved willfully and failed to remedy the infringement within 30 days.

Each of these breaches carries a maximum annual penalty of $1.5 million. Additionally, consider that HIPAA was created to increase the focus on protection in healthcare and to keep people safe. If avoiding a fine is an insufficient incentive to safeguard your records, consider the people behind the numbers. The more steps you take to protect your records, the safer your patients will be.

7 Major Aspects of HIPAA Compliance

HIPAA Compliance - 2
7 major aspects of HIPAA

1. It isn’t optional

Unlike any other digital applications or products that are being created monthly, any company that comes into contact with PHI must implement HIPAA compliance measures because it is the rule. The HIPAA Security Rule, HIPAA Privacy Rule (revised), and HIPAA Breach Notification Rule are all examples of laws that all healthcare entities must follow to protect patient privacy.

2. It won’t rob your wallet

Implementing a safe communications solution, performing risk assessments, and educating workers to use HIPAA compliance are all far less expensive than most people think. Initial set-up costs will naturally vary depending on the size, environment, and nature of a company’s business.

3. Fines

The Omnibus Final Rule, which went into effect in 2013, increased the statutory fine for a single HIPAA violation from $25,000 to $50,000 per corrupted patient record. This suggested that if some private hospital had accidentally released the unsecured records of 6,800 patients on the Internet, the fine for violating HIPAA may have been as high as $340 million.

4. It doesn’t hurt workplace productivity

It is living nonsense that implementing HIPAA-compliant communications would reduce workplace productivity. When effective secure communication solutions are adopted for HIPAA compliance, the ease and speed of communication can be preserved or even improved. While healthcare organizations can keep their BYOD policies if they are updated to cover staff use of the secure messaging solution.

6. Administrative Requirements

HIPAA-compliant connectivity is more than just putting up a safe messaging system and forgetting about it. All protected agencies must have written policies and procedures, and staff must be educated on these policies and procedures, according to HIPAA’s administrative criteria. The top priority for any company should also be notifying the appropriate parties in the event of a PHI breach.

7. Company’s reputation.

HIPAA violations may not only result in financial fines, but they can also damage the healthcare practice’s or organization’s brand image. Breach of PHI and subsequent OCR investigations will break the trust between a medical facility and its patients, which is essential for the medical facility’s continued success. One of the most certain ways of retaining loyalty – and your clients – is to implement HIPAA-compliant steps.

What can you do to follow the HIPAA Guidelines?

The most effective method of avoiding HIPAA violations is to understand how they relate to your organization. Health plans, health information clearinghouses, and healthcare facilities that exchange health information electronically are all impacted. So here are a few steps you need to take to comply with HIPAA guidelines.

  1. Encryption Services: Data encryption is a technique for safeguarding data by converting it to a format that can be read-only by the individual or device that possesses the encryption key.
  2. Employee Education: Educate your employees about digital security and embed it in your company’s policies.
  3. Recognize the Laws: HIPAA, HITECH, and FACTA are three federal laws that require strict adherence.
  4. Cloud-Based Data Storage: Using a cloud-based data storage service protects your data more than ever before, starting with the scanning of your records into electronic health records.
  5. Electronic Health Records: Electronic health records (EHR) ensure compliance with HITECH and HIPAA with all of the patients’ records.


Although all of these are relevant, we suggest focusing on the need to approach the privacy and protection of PHI holistically, by reviewing and improving processes, policies, and procedures, and training regularly. For example, Amazon’s HIPAA-compliant cloud services compliance policy would not be the same as a multi-specialty physician practice’s compliance program. At the end of the day, though compliance with HIPAA regulations can seem tedious, we all need to practice proper security hygiene to protect ourselves in today’s threat landscape. The consequences of failing to do so are far too serious to disregard.

So if you’re one of the startups that have an incredible idea connected with the Healthcare industry and HIPAA compliance, but you can’t find the right specialist or you don’t understand how you can implement it, then JetRuby might be your choice. Over the past 10+ years, we have delivered numerous working and successful digital products for various startups. During this time, together with our development team, we created a technological flow, that we stick to and that can guarantee a solid startup launch. That’s why we start our development with the Product Development Strategy. It is a free business consulting service where our experts will produce a general plan covering the future product development and the action plan with high-level features. Already got interested? Leave your project details below and we will contact you in under 24 hours!

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