What is HIPAA?

Learn about HIPAA

HIPAA is a United States federal law that required the creation of national standards to protect patients from having sensitive health information disclosed without their consent or knowledge.


The History and Evolution of HIPAA

In 1996, the U.S. Congress recognized the need for a system to protect the privacy of healthcare information. They introduced the Health Insurance Portability and Accountability Act, HIPAA, a ground-breaking legislation designed to secure sensitive patient data.

Over the years, HIPAA changes and updates have been made to adapt to healthcare needs and safeguard patient information.

In 2003, the HIPAA Privacy Rule came into effect, giving patients greater control over their health information and leading to a more transparent healthcare system. 

In 2005, the Security Rule was added to address Electronic Protected Health Information (ePHI).

The growing involvement of business associates (BAs) in handling patient data led to implementing the HIPAA Omnibus Rule in 2013, holding BAs directly accountable for HIPAA compliance.

Fast forward to today, HIPAA has emerged as the cornerstone of digital healthcare, profoundly affecting patient privacy by providing robust protection for sensitive medical data.

Key Components of HIPAA

HIPAA is a comprehensive legislative framework consisting of various rules that protect patients’ data and ensure stringent adherence to compliance. 

The following components make HIPAA an effective and crucial framework:

1. The Privacy Rule

The Privacy Rule safeguards the confidentiality of Protected Health Information (PHI). It establishes national standards to protect individuals’ medical records and other personal health information. It applies to health plans, healthcare clearinghouses, and those healthcare providers that conduct certain healthcare transactions electronically.

Under this rule, patients are given rights over their health information, including the right to examine and obtain a copy of their health records and request corrections. 

Moreover, the Privacy Rule mandates that healthcare providers and organizations must take reasonable steps to ensure the confidentiality of their communications with patients (such as emails, in-person conversations, messages, etc.)

2. The Security Rule

The Security Rule mainly focuses on securing Electronic Protected Health Information (ePHI) and compliments the HIPAA Privacy Rule.

It requires HIPAA-covered entities to maintain reasonable and appropriate administrative, technical, and physical safeguards for protecting ePHI. Specifically, covered entities must:

  • Ensure the confidentiality, integrity, and availability of all ePHI they create, receive, maintain or transmit;
  • Identify and protect against reasonably anticipated threats to the security or integrity of the information;
  • Protect against reasonably anticipated, impermissible uses or disclosures;
  • Ensure compliance by their workforce.

3. The Breach Notification Rule

The Breach Notification Rule occurs when a data breach involving unsecured PHI occurs. This rule requires covered entities and their HIPAA business associates to provide notification following a breach of unsecured PHI.

The response to a data breach varies depending on the scale. For breaches involving over 500 individuals, a prominent media outlet must also be informed. For smaller-scale violations (under 500 individuals), a log must be kept and submitted to the HHS within 60 days after the calendar year-end.

4. The Enforcement Rule

The Enforcement Rule contains provisions relating to compliance and investigations, the imposition of civil money penalties for violations of HIPAA rules, and procedures for hearings. This rule holds covered entities and individuals accountable for non-compliance with HIPAA standards.

The enforcement process is intended to ensure that the privacy and security of health information are rigorously protected.

5. The Transaction and Code Sets Rule

The Transaction and Code Sets Rule standardizes how electronic data interchange (EDI) is conducted in healthcare, specifically for health-related information systems. 

This rule ensures consistency and promotes efficiency across healthcare systems by setting formats for specific transactions, such as claims, remittances, eligibility inquiries, claim status inquiries, and referrals.

6. The Unique Identifiers Rule

The Unique Identifiers Rule, also known as the National Provider Identifier Rule, requires all healthcare providers, health plans, and clearinghouses to use unique identifiers for covered healthcare providers. 

This 10-digit identifier enhances efficiency and accuracy in the healthcare system by providing a uniform way of identifying providers on standard transactions.

HIPAA Violations and Penalties

Below is a detailed breakdown of the penalty structure associated with different tiers of HIPAA violations.

Violation Category



Tier 1

Violation that the covered entity was unaware of and could not have realistically avoided, given a reasonable amount of care to abide by HIPAA Rules.

Minimum fine of $100 per violation up to $50,000

Tier 2

Violation that the covered entity should have been aware of but could not have avoided even with reasonable care. This falls short of willful neglect of HIPAA Rules.

Minimum fine of $1,000 per violation up to $50,000

Tier 3

Violation suffered due to “willful neglect” of HIPAA Rules, where an attempt has been made to correct the violation.

Minimum fine of $10,000 per violation up to $50,000

Tier 4

Violation of HIPAA Rules constituting willful neglect, where no attempt has been made to correct the violation within 30 days.

Minimum fine of $50,000 per violation

These penalties are applied on a case-by-case basis, and several factors are taken into account during the evaluation, including:

  • The duration of the violation
  • The number of individuals affected
  • The nature of the exposed data
  • The organization’s cooperation during the investigation. 

Prior history, financial condition, and harm caused by the violation can also influence the penalty amount.

Common HIPAA Violations

  1. Unauthorized access to healthcare records.
  2. Neglecting organization-wide risk analysis.
  3. Ignoring identified security risks.
  4. Denying patients access to their health records.
  5. Incomplete HIPAA-Compliant Business Associate Agreement.
  6. Poor ePHI access control measures.
  7. Not using encryption or equivalent measures for ePHI.
  8. Delayed breach notifications.
  9. Unauthorized PHI disclosures.
  10. Incorrect disposal of PHI.
  11. Downloading PHI onto unauthorized devices.
  12. Sending ePHI to a personal email account.
  13. Leaving paperwork or devices unattended.
  14. Disclosing PHI past the authorization expiry date.

HIPAA and Patient Rights

HIPAA ensures the privacy and security of patients’ information and grants patients certain rights regarding their health information. These rights further empower patients to have a degree of control over their healthcare data.

  1. Right to Access Medical Records: Patients have the fundamental right to request and obtain a copy of their medical records from their healthcare providers. This promotes transparency and ensures patients can actively participate in their healthcare decisions.
  2. Right to Amend Erroneous Information: If patients find any inaccuracies or errors in their medical records, they can request corrections, ensuring their health information is as accurate and up-to-date as possible.
  3. Right to Know Who Has Access: Patients have the right to know with whom their Protected Health Information (PHI) has been shared. This promotes accountability and trust between patients and healthcare providers.
  4. Right to Disclosure Reasons: Beyond knowing who has access to their PHI, patients also have the right to know why their information has been shared. This ensures that their data is being used for legitimate and necessary purposes.
  5. Right to Determine Contact Method: Patients can decide how they are contacted about appointments, treatment alternatives, or other health-related benefits. This could be via email, telephone, or mail, offering more flexibility and comfort for the patient.
  6. Right to Object to Certain Disclosures: Patients have the right to object to certain disclosures of their health information. If patients believe their privacy rights are being violated, they can file a complaint with their provider or the U.S. Department of Health and Human Services.

The Future of HIPAA and Data Privacy in Healthcare

Over the years, HIPAA has shaped how healthcare organizations handle data. Its pivotal role in protecting patient privacy and fostering trust has rendered it effective and increasingly essential in the digital age.

Today, HIPAA compliance is more than just a formality. The healthcare sector is witnessing significant changes in data management and privacy practices. Emergent technologies and health crises are pushing traditional boundaries, indicating the need for robust, adaptable data privacy regulations.

Health Information Exchanges (HIEs)

Health Information Exchanges (HIEs) have emerged as critical electronic platforms that enhance clinical data access and retrieval. Their role became particularly notable during the COVID-19 pandemic, which led the Office for Civil Rights (OCR) to issue HIPAA compliance guidance on HIEs, suggesting potential Privacy Rule modifications to support their use.

Artificial Intelligence (AI)

AI’s integration into healthcare has brought about groundbreaking transformations, from data analytics to drug dosage calculation. However, with these advancements come new ethical and policy challenges related to healthcare, especially concerning data privacy and security. Hence, the need to abide by  HIPAA is more than ever. 


Today, healthcare providers, startups, and digital health companies must ensure their systems strictly adhere to HIPAA compliance. 

MedStack allows your organization to focus on what truly matters: creating transformative healthcare solutions and delivering patient-centered care, all while we handle the heavy lifting of compliance.

With MedStack, you’re not only choosing a platform; you’re choosing a partner in healthcare transformation.


Frequently Asked Questions

HIPAA stands for the Health Insurance Portability and Accountability Act.

HIPAA is important because it protects the personal health information (PHI) of patients.

Unlike other types of data that can be salvaged and protected again after a data breach, such as credit card information (where the card number can be canceled and a new card reissued), breaches in personal health data can cause substantial damage.

Once health information is leaked, that information cannot be returned to safety again, and in some cases, could even be used against patients. HIPAA protects people from these potential risks and ensures privacy standards are upheld. While HIPAA is a United States law, Canadian companies and other non-US business entities operating within the United States must also comply.

Any covered entities that provide healthcare services (hospitals, clinics, insurance companies, telehealth, etc.) must meet HIPAA compliance requirements.

In addition to covered entities, any business that partners with covered entities and has access to protected data must also ensure they are HIPAA compliant. These are called “business associates”, or BAs.

In addition to covered entities, any business that partners with covered entities and has access to protected data must also ensure they are HIPAA certified. These are called “business associates”, or BAs.

BAs must sign a Business Associate Agreement when they begin working with covered entities, which promises that they will meet and maintain the necessary HIPAA requirements.

Not following HIPAA compliance requirements, policies, and procedures could result in fines or reprimands from the government for both the business associates (if they’re at fault for the data breach), as well as the covered entities where the protected health information was being gathered and stored.

To learn more about the cost of a HIPAA breach, read our blog post.

Under HIPAA, protected health information is considered to be information that relates to the past, present, or future health status of an individual that is collected, created, maintained or transmitted by a HIPAA-covered entity. This information must be individually identifiable to qualify.

The Office for Civil Rights (OCR) is in charge of enforcing HIPAA compliance. This is part of the U.S. Department of Health and Human Services, which enforces federal civil rights laws.

This agency protects individuals and entities from unlawful discrimination based on color, race, disability, age or sex, and as part of their protection services, oversees the enforcement of HIPAA requirements.

Privacy Rule
This rule is designed to protect PHI and medical records of individuals
Security Rule
This rule defines all the standards and procedures of how electronic PHI is stored, accessed, and transmitted
Transactions Rule
This rule focuses on safety codes (i.e., HCPCS, CPT-3, ICD-9, etc.), which must be used during HIPAA transactions in order to ensure PHI is protected
Identifiers Rule
This rule covers the three unique identifiers, which are used to determine the type of HIPAA protections required for a covered entity that uses HIPAA-regulated information
Enforcement Rule
This rule helps expand the other HIPAA rules and policies, as well as establish clear penalties for HIPAA violations

How can MedStack help with HIPAA compliance ?

Becoming HIPAA-compliant can be a time consuming, expensive and complicated process. Companies can spend as long as six months, and as much as six figures on privacy lawyers, software developers, compliance consultants, and more.

MedStack can turn those months into several weeks, as well as drastically reducing the costs associated with the process of meeting HIPAA compliance for digital healthcare applications. We amalgamate all the services needed into an affordable monthly subscription.

Additionally, some covered entities in the United States are required to ensure that health data remains within the United States. MedStack can help assist with this requirement by ensuring the American companies are only deploying to data centers within the US.

You can achieve about 70% compliance through MedStack alone, and if you choose to work with one of our partners, you can quickly and easily become 100% HIPAA compliant.

Learn how our platform can help you become HIPAA-compliant

We are the only platform that brings together compliance, security assessment responses, threat protection, and audit readiness into a complete offering, ensuring your application runs and manages data in the cloud with the highest privacy and security standards in mind.

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Learn More

Check out a few of our resources to learn more about HIPAA.

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