What is HIPAA Privacy Rule?

The HIPAA Privacy Rule applies to covered entities and regulates how patient information can be used and disclosed. It covers all forms of written and oral PHI and ePHI and is one of the most fundamental pillars of healthcare data protection. It also enforces the Minimum Necessary Standard, which stipulates that covered entities must use, disclose or request only the minimum amount of PHI required to complete a task.

Apart from these, the Privacy Rule also grants individuals several critical rights regarding their health information. These include the right to access, the right to request amendments, the right to receive an accounting of disclosures, the right to request restrictions, and the right to confidential communications. 

The Privacy Rule was primarily developed for all covered entities. However, it also applies to business associates like third-party billing services, cloud storage providers, email platforms, or telehealth apps that handle PHI on behalf of covered entities. 

The HHS and the OCR update the HIPAA Privacy Rule from time to time to ensure that it covers and ensures adequate protection from the latest cybersecurity threats and digital crimes. In June 2024, the Privacy Rule was updated to limit the disclosure of ‘an individual’s PHI about reproductive health care for certain non-health care purposes, where such use or disclosure could be detrimental to the privacy of the individual or another person or the individual’s trust in their health care providers.’

What is HIPAA Security Rule?

The HIPAA Security Rule was put in place to protect the digital health data or ePHI created and maintained by covered entities. With more and more healthcare organizations moving their patient health data to digital platforms and cloud-based systems, the HIPAA Security Rule plays a critical role in ensuring that healthcare data management stays secure and patient trust is not broken.

As part of enforcing the Security Rule, the OCR mandates the implementation of various types of safeguards on ePHI, namely – administrative, physical, and technical.

Administrative Safeguards Under HIPAA Security Rule

These include policies and operational procedures at healthcare organizations and care associated business entities, that protect ePHI and lay out a code of conduct for digital health data management. Mandatory HIPAA Compliance training for employees, periodic risk assessments, and privacy breach reporting and incident procedures all come under the administrative safeguards. 

Physical Safeguards Under HIPAA Security Rule

All physical restrictions to systems and facilities that store or provide access to ePHI come under the physical safeguards of the Security Rule. For instance, healthcare organizations that handle large digital health records must secure their server rooms with physical security protocols that limit unauthorized personnel access. 

Technical Safeguards Under HIPAA Security Rule

This includes all technologies that are used to protect ePHI and control access to it. The OCR recommends the use of HIPAA compliant email providers, secure mail services, data encryption, account logins with Multi-Factor Authentication (MFA), audit logs, etc, in all healthcare clinics and at the facilities of associated third-party service providers.

Why the Security Rule Is Essential

Healthcare data breaches in the US set new records in 2024 both in impact and cost. According to some reports, nearly 180 million individuals were impacted due to healthcare breaches in 2024, and 85% of the total reported cases were identified as ‘Hacking/IT Incident’. 

The OCR cited ‘incomplete compliance with HIPAA Security Rule requirements as the primary reason for security failures that led to data breaches’ among healthcare providers, business associates, and health insurance plans. When healthcare providers and organizations strictly comply with the Security Rule, they establish a strong defense against threats like ransomware attacks, phishing, and data leaks. 

Key Differences Between the HIPAA Privacy and Security Rules

The HIPAA Privacy Rule and Security Rule complement each other by bringing more clarity and outlining the execution of healthcare data management. The Privacy Rule focuses on defining the elements of PHI and ePHI, identifying entities that may come into contact with it, and setting the rules of use and disclosure of all forms of PHI. Meanwhile, the Security Rule primarily concerns ePHI and defines how to secure access in digital systems. Together, they ensure both ethical handling and secure storage of sensitive health information.

The table below shows how the Privacy Rule and the Security Rule takes care of distinct yet complementary job roles for protecting personal healthcare data.

What is HIPAA Breach Notification Rule?

Unlike the Privacy and Security HIPAA Rules that focus on the prevention of privacy breach incidents and malware attacks, the Breach Notification Rule offers guidelines on how healthcare providers and associated third-party business associates must act in the event of a breach incident. This rule requires clinics, healthcare organizations, and other third-party vendors to promptly report data breaches involving unsecured PHI. 

Here are the highlights of the HIPAA Breach Notification Rule that healthcare providers must be aware of:

• The HHS must be notified within 60 days of all breach incidents that impact and compromise the data of 500 or more individuals.
• If the breach impacts fewer than 500 individuals, the incident still needs to be documented and reported at the end of the year.
• Healthcare providers and businesses must inform all patients via first-class mail or email about any breach that has impacted more than 500 individuals.
• Healthcare providers and businesses must also notify the media about a breach that has impacted more than 500 individuals in a single jurisdiction.
• All notifications must contain a detailed description of the incident, how it happened, the types of information compromised, and remediation efforts being taken such as such as offering credit monitoring or identity theft protection.
• Healthcare providers, organizations and business associates must also guide patients on steps they can take to protect themselves, and offer a point of contact for getting more information and clarification.

The Breach Notification Rule is critical for maintaining trust in the healthcare system. It ensures that patients are informed, regulators are aware of organizational vulnerabilities, and prompt action is taken to contain and mitigate damage. Failure to notify appropriately can lead to significant civil penalties under the HIPAA Enforcement Rule.

What is HIPAA Enforcement Rule? 

The HIPAA Enforcement Rule provides the legal framework for holding covered entities and business associates accountable for not complying with HIPAA rules and regulations. It documents the procedures and course of action that the OCR can follow to investigate HIPAA violations. It also lists the various HIPAA breach penalties that can be levied for different non-compliance categories. 

Unlike other HIPAA rules, the Enforcement Rule focuses on the consequences of non-compliance. Under this rule, the OCR has the right to investigate breaches and complaints, conduct audits and reviews, and impose civil monetary penalties. These HIPAA breach penalties are imposed based on the tier of violation. Here’s a detailed chart on the various tiers of HIPAA violations and the penalty cap for each tier.

The Enforcement Rule is often triggered when a data breach occurs, a patient files a complaint, or an organization self-reports non-compliance. The OCR then proceeds with a detailed investigation to find out the reason for the breach and impose corresponding category fines. For instance, the OCR levied a fine of  $4.75 million on Montefiore Medical Center in February 2024, for failure to conduct risk analysis and lack of adequate security procedures, which led to a data breach that impacted 12,000 patients.

Such penalties not only hold organizations accountable for their actions but also send a clear message to all parties in healthcare data management to take HIPAA rules seriously.

How to Avoid HIPAA Breach Penalties

HIPAA breaches cost healthcare organizations and businesses billions of dollars annually. Compared to other industries, privacy breaches in healthcare cost almost 2.5x more with costs stemming not just from HIPAA breach penalties and fines, but from legal fees, operational disruptions, and loss of goodwill and patient trust. With hundreds of breaches reported annually, the cumulative cost is well over $10 billion per year for the US healthcare sector alone.

This makes a pretty good case for healthcare organizations to invest in HIPAA breach prevention. From conducting annual risk assessments to providing HIPAA breach prevention training for all employees, there are multiple ways in which healthcare providers can safeguard PHI and ePHI. According to a recent survey conducted by the HIPAA Journal, over 90% of organizations now provide HIPAA refresher courses and breach prevention training courses, much like the one we offer at Brightsquid. Such training programmes can help clinics and their staff stay up to date on the latest HIPAA rules and regulations, train them on PHI best practices, and stay alert for any signs of data breaches or security gaps.

In addition to being trained on HIPAA rules and breach response policies, healthcare organizations must also switch to HIPAA compliant email providers like Brightsquid that offer inbuilt breach prevention, secure logins, MFAs and data encryption both at rest and in transit.

By following these steps, healthcare providers and vendors can minimize risks, protect patient data, and avoid costly penalties by staying compliant with HIPAA Rules.