Businesses in industries subject to strict compliance and regulatory requirements are often anxious about migrating to the cloud for fear that a managed services provider will not be able to meet their compliance demands. If you’ve been involved in the increasingly complex world of business IT for long, you’ve probably already heard the term “HIPAA-compliant.” Perhaps, like many, you assume that HIPAA compliance is relevant only to businesses in the healthcare industry.
HIPAA stands for Health Insurance Portability and Accountability Act, which was written into public law after being enacted in 1996 under Bill Clinton. The act was introduced to ensure that employees would still have their medical insurance paid for them even after leaving the company. However, the act also introduced regulations designed to protect the privacy of patients by setting certain standards on the handling of information, including the storage and transmission of digital data.
Is HIPAA Relevant to My Business?
HIPAA applies to two types of entities: covered entities and business associates. Covered entities are simply health plans, health care clearinghouses, and health care providers who electronically transmit health information.
However, any IT department that creates, stores, sends or receives protected health information (PHI) on behalf of a covered entity falls into the broader category of a business associate. In other words, if your company has access to data owned by a covered entity, then you’ll certainly need to be HIPAA-compliant. Even if you don’t currently fall under that category, you might want to consider ensuring you can become compliant the moment a covered entity asks whether you can meet their requirements.
As part of the HIPAA law, covered entities are legally obliged to sign business associate agreements with any vendors or contractors that have access to PHI — regardless of how unrelated it is to the working relationship. These business associates may include, but are not limited to, technology providers, software providers, financial service providers, business services and legal services.
How Can My Business Achieve HIPAA Compliance?
Achieving HIPAA compliance as a business associate is imperative if you work with any covered entities, but simply signing a business associate agreement alone does not necessarily make you compliant right away. There are several steps you’ll need to take, starting with a security risk assessment of your business. At this stage, you’ll need to determine how information is stored and transmitted within your business.
Your risk management plan needs to cover administrative, physical and technical safeguards. Technical safeguards should, for the most part, already be taken care of, since data security is a crucial factor in any modern business anyway. Physical safeguards consider the various standards you set for physically securing your systems. Administrative factors are a little more complicated, since the ones outlined by the HIPAA legislation aren’t always relevant to every business.
HIPAA requires relevant entities to address four main rules, which pertain to privacy, security, enforcement and breach notification:
- Privacy establishes the standards for protecting patient health information.
- Security addresses both the technical and non-technical safeguards in place.
- Enforcement outlines investigations and penalties for failing to comply.
- Breach notification requires relevant parties to notify authorities of a breach.
For the most part, compliance is about documenting everything and abiding by the rules laid out by the HIPAA legislation. Failure to comply can lead to severe fines. It’s also important to remember that the biggest risk still comes from business associates rather than covered entities themselves. As such, if your company offers any business service to a covered entity, the reputation and the very future of your company hangs on your ability to protect their data.
Being HIPAA-compliant means satisfying the elements of the privacy and security rules while having the necessary resources in place to enforce them. It’s also important to remember that HIPAA compliance isn’t a one-time task – it’s an ongoing process that needs to evolve and change with technology to ensure that it stays relevant. After all, a single violation is often all it takes to put your company out of business for good.
Dyrand Systems provides a comprehensive range of IT services for businesses in various industries, such as manufacturing, finance and insurance. Talk with our experts today to start addressing the IT concerns of your business.