HIPAA: An Overview For HealthTech Startups

The Health Insurance Portability and Accountability Act (HIPAA) is a federal law that regulates how healthcare providers and other business entities record, store, manage and share the private and personal medical information of US patients. If you’re not familiar with HIPAA, don’t worry! If you’re a HealthTech startup, it’s crucial to be HIPAA compliant. This blog post will explain what HIPAA is and how you can comply with the regulations.

The 4 Primary Rules of HIPAA

HIPAA initially consisted of four primary rules:

1. The HIPAA Privacy Rule: This rule protects a patient’s medical information privacy. Healthcare providers must ensure that only authorized individuals have access to this information.
2. The HIPAA Security Rule: This rule establishes security standards for protecting electronic patient health information. The Security Rule establishes security requirements for the electronic receipt, transmission, storage, and transfer of Protected Health Information (PHI).
3. The HIPAA Breach Notification Rule: This rule requires healthcare providers to notify individuals and the government of any breaches of protected health information. The Breach Notification Rule is in place to ensure that patients are notified if their personal information has been compromised.
4. The HIPAA Enforcement Rule: This rule addresses how investigations should be handled regarding HIPAA compliance. It establishes penalties for businesses that violate HIPAA regulations. The penalties can be severe and include fines of up to $1.5 million per violation.

The Omnibus Rule

In a 2013 revision, the Omnibus Rule was released. The U.S. Department of Health and Human Services (HHS) released its final Omnibus Rule to amend HIPAA and establish additional regulations for healthcare providers and business entities regarding handling Protected Health Information (PHI). The Omnibus Rule includes new provisions for breach notification, data security, and enforcement per the Health Information Technology for Economic and Clinical Health (HITECH) Act.

The Omnibus Rule extended the accountability of HIPAA to business associates. Business associates (such as vendors, contractors, and subcontractors) are entities that provide services to a HIPAA-covered entity (such as physicians, dentists, hospitals, pharmacies, insurance companies) and have access to PHI. They must comply with HIPAA regulations, and the covered entity is responsible for ensuring that they do so.

HIPAA And HealthTech Startups

The Omnibus Rule is where HIPAA’s governance over HealthTech startups comes in. If you’re a HealthTech startup, it’s crucial to ensure that you are HIPAA compliant and that any business associates you work with are HIPAA compliant. Healthcare providers must enter into a Business Associate Agreement (BAA) with their business associates, which outlines the responsibilities of both parties for the handling of PHI. It will help ensure that your customer’s data is protected and that you’re not violating HIPAA regulations.

HIPAA compliance is a lot of work, and it can be expensive to implement the necessary security measures. Given this, not all HealthTech startups need to be HIPAA compliant. If you’re not handling PHI, you don’t need to comply with HIPAA regulations. For example, if you’re developing a mobile app that helps patients track their health and fitness goals, you don’t need to be HIPAA compliant. However, suppose you’re building a mobile app that records, stores, manages, and shares private and personal medical information. In that case, your startup and the contractors involved in launching the app and supporting your startup should be HIPAA compliant.

How To Make Sure Your Startup Is HIPAA Compliant?

The Office for Civil Rights (OCR) from the Department of Health and Human Services (HHS) is the federal governing body that determines compliance. In short, there is no one regulatory body that can “certify” that an organization is HIPAA compliant. The exception is Texas. Moreover, HHS does not endorse or recognize the “certifications” made by private organizations. Yet I highly recommend consulting a HIPAA expert who could guide you through HIPAA compliance.

How to Become HIPAA Compliant?

HIPAA requires that you do the following four things.

1. Put safeguards in place to protect patient health information.
2. Reasonably limit the use and sharing to the minimum necessary to accomplish your intended purpose.
3. Have agreements in place with service providers that perform covered functions. These Business Associate Agreements (BAAs) ensure that service providers (Business Associates) use, safeguard and disclose patient information adequately.
4. Implement procedures to limit who can access patient health information and training programs about how to protect patient health information.

Hence, you need to meet seven fundamental elements of an effective compliance program.

1. Implementing written policies, procedures, and standards of conduct.
2. Designating a compliance officer and compliance committee.
3. Conducting effective training and education.
4. Developing effective lines of communication.
5. Conducting internal monitoring and auditing.
6. Enforcing standards through well-publicized disciplinary guidelines.
7. Responding promptly to detected offenses and undertaking corrective action.

What Happens If You Don’t Comply?

If you violate any HIPAA rules, you could face steep fines regardless of the intention. As stipulated by the HITECH Act, the maximum civil penalty for knowingly violating HIPAA is $50,000 per violation up to a maximum of $1.5 million per violation category per year.

If the violation is severe, criminal charges could be filed with a possible penalty of 1 to 10 years in prison. Criminal HIPAA violations include theft of patient information for financial gain and wrongful disclosures with intent to cause harm. A lack of understanding of HIPAA requirements may not be a valid defense. When an individual “knowingly” violates HIPAA, knowingly means that they have some knowledge of the facts that constitute the offense, not that they know that they are violating HIPAA Rules. (resource)

Is It Still Worth It To Comply?

HIPAA compliance can be a costly and time-consuming endeavor for some. However, the benefits of HIPAA compliance outweigh the costs of audits and penalties.

One of the main benefits of HIPAA compliance is that it protects patient data. This is especially important for healthtech startups that deal with sensitive health information. HIPAA compliance also gives startups a competitive edge. Many healthcare providers are now required to work with HIPAA-compliant vendors, so complying with HIPAA can help startups to win more business. In addition, HIPAA compliance can build trust with patients and investors. Patients want to know that their data will be safe, and investors want to see that startups are taking data security seriously.

Thus, going over compliance requirements is worthwhile if you think your app records, stores, manages and shares private and personal medical information. Non-compliance could be costlier than compliance costs.

Bring It All Together

HealthTech startups are the stepping stone to revolutionizing future health care. As organizations evolve with the society and their needs, government rules and regulations evolve too. Until then, HIPAA compliance needs to be taken seriously for any startup looking to work with medical information.

As a HealthTech startup, complying with HIPAA regulations is essential to protecting your customers’ data. By ensuring that your company and all contractors involved in launching and supporting your app are HIPAA compliant, you can ensure that your customers’ information is appropriately safeguarded.

HIPAA can be a bit of a daunting topic, but it’s important to remember that the primary goal of compliance is to protect patient health information. By focusing on your business goals and putting safeguards to protect patient data, you can stay compliant and keep your startup on track.

If you want to launch your own healthcare app or platform, we’ve got the experience to help you from the ground up. Talk to us to learn more.

Until next time ❤