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The healthcare industry has experienced a significant escalation in data breaches over the past few years, with 2024 marking a particularly challenging period. In 2024, 703 large data breaches were reported, affecting approximately 184 million individuals, about 53% of the U.S. population. This represents a 9.4% increase in breached records compared to 2023. The primary drivers behind this rise in data breaches include:
Considering the immense influence of data security and patient privacy on medical care, this article outlines HIPAA rules, digs deeper into how they apply to EHR systems, and provides a comprehensive EHR compliance checklist for 2025. While this piece primarily focuses on EHRs, its insights can also be implemented in other essential healthcare software, such as PMS, RCM, and digital health solutions.
Enacted in 1996, HIPAA safeguards patient privacy and health information. In addition to securing data in EHRs and cloud storage, it grants patients access to their medical records, prevents fraud and unauthorized data sharing, and imposes strict penalties for violations and breaches. The regulation comprises five primary rules, including:
1. Privacy Rule
Safeguards Protected Health Information (PHI) in all forms, regulates its use/disclosure, grants patient rights to access and correct records, and applies to covered entities (such as healthcare providers, insurers, and clearinghouses) and business associates (which include EHR vendors, billing companies, IT providers, and cloud storage services)
2. Security Rule
Protects electronic PHI through administrative, physical, and technical safeguards, including encryption, access controls, and audit logs.
3. Breach Notification Rule
Requires notifying patients, the U.S. Department of Health and Human Services (HHS), and sometimes media within 60 days of a PHI breach involving unencrypted data.
4. Enforcement Rule
Defines penalties for HIPAA violations, with fines up to $50,000 per violation and potential criminal charges.
5. Omnibus Rule
Expands HIPAA protections to business associates, ensures electronic record access for patients, and restricts the use of PHI for marketing without consent.
Here’s how they are extended to your EHR system.
HIPAA imposes several critical rules on EHR systems to ensure the privacy, security, and integrity of PHI. Failure to comply can result in hefty penalties, reputational damage, and legal consequences. Below are how these rules apply to your EMR and what steps can be taken to remain fully compliant:
1. HIPAA Security Rule: Designed to Safeguard ePHI
This regulation establishes administrative, physical, and technical safeguards to protect the confidentiality, integrity, and availability of ePHI.
Administrative measures encompass security-related policies and procedures. It requires organizations to perform risk assessments and devise mitigation strategies. Also, workforce training on security awareness must be conducted regularly, and the duties and obligations of a data breach response team should be clearly outlined.
Physical safeguards, in contrast, focus on preventing unauthorized entry. Servers housing patient data should be placed in secured environments, restricting personal devices and visitors unless fully authorized. Furthermore, data-wiping software or physical destruction methods must be employed when repurposing or disposing of devices containing sensitive information.
In addition, technical safeguards protect EHRs and networks that document or transmit medical data. Expectations under HIPAA regulations include multi-factor authentication, end-to-end encryption of ePHI both at rest (stored data) and in transit (data being transmitted over networks), and maintaining detailed logs of all ePHI access, modifications, and transmissions.
2. HIPAA Privacy Rule: Governing the Use of PHI
The Privacy Rule reinforces patients’ rights to obtain and inspect copies of their medical records. It requires that EHRs facilitate easy access through patient portals. While providers may charge fees for copies, they cannot withhold medical records due to unpaid bills. Additionally, covered entities must respond to patient record requests within 30 days.
In case medical records are requested by a third party, providers need to get patient consent before sharing them. This consent is to be documented, and patients should be informed of their rights through a Notice of Privacy Practices (NPP).
Not only this but also patients have the right to restrict certain disclosures. For example, if they pay out-of-pocket for a service, they can request not to inform their insurers.
Besides, entities need to adhere to the minimum standard when sharing information. For example, a medical biller should access only the patient’s billing data, not their entire medical history.
3. HIPAA Breach Notification Rule: Handling Data Breaches
In 2023, 725 healthcare breaches were reported, affecting over 135 million patients. The rule mandates that healthcare entities and business associates follow a standardized procedure for managing PHI data breaches. Its primary objective is to ensure transparency and prompt communication among relevant authorities regarding incidents that may compromise sensitive health data.
Healthcare providers are required to notify their patients about data breaches. Such notifications should detail the nature of the breach, the type of information compromised, and the measures taken to mitigate its impact.
For breaches affecting 500 or more individuals, organizations must inform the U.S. Department of Health and Human Services (HHS). In contrast, for breaches impacting fewer than 500 individuals, entities may submit a compiled report annually. Nonetheless, this does not diminish a patient’s right to be promptly informed of any violation.
In certain cases, particularly when a breach impacts many individuals (typically 500 or more) within a single state or jurisdiction, the organization may also be required to notify the media. This ensures that the public is promptly informed of significant breaches with broader implications.
By mandating timely notifications, the rule not only helps maintain patient trust and mitigate reputational damage but also reduces potential harm to patients while providing a framework for regulatory oversight and improved security practices.
4. HIPAA Enforcement Rule: Avoiding Fines and Penalties
The HIPAA enforcement rule ensures that covered entities and business associates take necessary steps to protect PHI. It does so by establishing a structured system of penalties that increase in severity based on the nature of the violation, such as
The severity of fines and penalties, therefore, depends on an institution’s history and intent. Organizations with a history of repeated, willful negligence face stiffer penalties than those that consistently adhere to compliance standards and take prompt corrective action when breaches occur. Ultimately, the aim is not merely to punish but also to foster a culture that encourages organizations to:
5. HIPAA Omnibus Rule: Extending the Scope of Compliance Accountability
The HIPAA Omnibus Rule clarifies that not only traditional medical practitioners but also third parties that handle protected health information (PHI), such as EHR vendors, cloud-storage service providers, and billing companies, are liable for HIPAA compliance. Any violation carries the same penalties as those imposed on healthcare providers. A key mechanism for enforcing this accountability is the use of Business Associate Agreements (BAAs), which require vendors to:
Moreover, the ONC Data Brief (2023) reports that 80% of healthcare providers use cloud-based EHRs, further increasing reliance on vendor compliance. This underscores that data security is a shared responsibility, and every stakeholder must take action to protect patient data without compromising interoperability or user-friendly interfaces. The goal is to strike a careful balance between security and functionality.
The largest HIPAA fine to date was $16 million (Anthem Inc. in 2018 for a data breach affecting 79 million patients). As compliance standards evolve, avoiding hefty fines and maintaining data security requires regular audits, risk assessments, staff training, and collaboration with HIPAA-compliant vendors. OmniMD, with over two decades of expertise in health IT solutions, is committed to helping you navigate these challenges. Connect with our experts today to discover how our innovative solutions are designed to keep you ahead of the competition.
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