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Blog > 10 Steps to Make Your Software HIPAA Compliant

10 Steps to Make Your Software HIPAA Compliant

VComply Editorial Team
June 5, 2024
8 minutes

Healthcare providers are increasingly reliant on software applications to manage Electronic Protected Health Information (ePHI). The Health Insurance Portability and Accountability Act (HIPAA) sets the standard for securing sensitive patient data, and any organization that handles ePHI must ensure their software solutions comply with HIPAA regulations.

As a healthcare provider, you’d put security and privacy on No.1 on your priority list. The easy way to avoid security breaches and privacy risks is to make your healthcare software HIPAA-compliant. The failure to comply with HIPAA rules in healthcare can result in serious security risks through unauthorized access to protected health information (PHI) and unlawful information, and data leaks. This will be costly and can seriously damage your business’s reputation.

Healthcare providers are increasingly reliant on software applications to manage Electronic Protected Health Information (ePHI). The Health Insurance Portability and Accountability Act (HIPAA) sets the standard for securing sensitive patient data, and any organization that handles ePHI must ensure their software solutions comply with HIPAA regulations.

In this blog, we will help you understand how you can protect your medical software by being HIPAA-compliant in 10 important steps, safeguarding ePHI and maintaining regulations.We’ll also talk about some of the best practices of being a HIPAA compliant software.

Sounds exciting? Before going further into the article, let’s take a moment to understand the definition of some common terms related to HIPAA.

  • Protected Health Information (PHI): Any information in a medical record that can be used to identify an individual and that was created, used, or disclosed in the course of providing a healthcare service.
  • Electronic Medical Records (EMRs): Digital versions of paper charts in a clinician’s office that contain the medical and treatment history of patients.
  • Business Associates: Third-party entities that perform activities involving the use or disclosure of PHI on behalf of a covered entity.
  • Business Environments (BE): The settings in which healthcare organizations operate, including the physical and digital spaces where PHI is handled.

Let’s get into the blog!

What is HIPAA Compliance for Software Development?

HIPAA is a federal law that regulates the protection of health information, establishing security standards and privacy requirements for managing personally identifiable medical and health data. This law basically applies to protected health information (PHI), which includes any health data that can be linked to an individual. Such data includes:

  • Name, location, and date of birth
  • Biometric identifiers like retina scans and fingerprints
  • Vehicle identifiers such as license plates or serial numbers
  • Health insurance and social security numbers
  • Past interactions with healthcare facilities and government
  • Payment information including credit card numbers or bank IDs
  • Contact details like home address, IP address, phone number, or email
  • Photos, particularly facial images

For example, HIPAA covers medical records and hospital bills, but not basic health metrics unless they can uniquely identify a patient, as they are considered de-identified data.

Apart from safeguarding PHI, HIPAA also manages healthcare efficiency. It activates the remote exchange of electronic medical records (EMRs) between hospitals, reducing unnecessary paperwork, and sets the ground ready for the transfer of insurance coverage for workers changing jobs.

In addition to PHI security, HIPAA aims to improve the efficiency of healthcare. For instance, it allows different hospitals to exchange EMRs remotely and without tiring paperwork. Plus, it helps workers transfer their insurance coverage when they change jobs.

Why is it Important to be HIPAA Compliant?

As a healthcare provider, you must be HIPAA-compliant as you’re legally required to comply with HIPAA regulations under federal law. If not, non-compliance can result in severe fines, penalties, and potential legal action. 

Compliance ensures patient privacy and the security of protected health information (PHI). This need comes from the increase in electronic transactions and the need to protect electronic PHI (ePHI) as it is zipped between healthcare providers, health plans, and clearinghouses. 

Additionally, specific standards, known as the HIPAA Security and Privacy Rules, were formed to protect the privacy of individually identifiable health information in any format.

What Happens to Healthcare Data if HIPAA doesn’t Protect it?

If healthcare data isn’t protected by HIPAA, it could be stolen and misused for fraudulent purposes. Such data is valuable because it can be exploited to obtain expensive medical treatments without payment. This kind of healthcare fraud drives up insurance premiums, causing everyone to pay more for insurance.

Those who handle electronic healthcare information must comply with HIPAA regulations. However, if your business doesn’t involve such data, like retail stores or restaurants, then don’t worry about HIPAA compliance.

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10 Steps to Make a HIPAA-Compliant Software

  1. Analyze Risks Based on the Type of Data

The first step in achieving HIPAA compliance is conducting a detailed risk assessment to identify potential vulnerabilities in handling ePHI. This involves evaluating how data is collected, stored, transmitted, and processed. Understanding the continuous nature of risk evaluation is crucial. Regular assessments help identify new threats and ensure that security measures remain effective. The goal is to create a dynamic risk management process that evolves with changing threats and organizational needs.

  • Data Collection: Identify how PHI enters your Business Environments (BE), where it is stored, and to whom it is transmitted. Document potential threats that could lead to unauthorized access or leakage.
  • Assess Existing Security Measures: Evaluate and document your current security infrastructure, to see that all measures are correctly configured and implemented.
  • Determine the Impact of Threats: Analyze the severity of risks to PHI in your HIPAA-compliant software. Use qualitative or quantitative methods to measure the potential impact on your business in the event of a data breach.
  • Determine the Risk Level: Assign a risk level to each security gap by quantifying the potential damage of each threat.
  • Finalize Documentation: Record the results of your risk assessment. While no specific format is required, the goal is to compare historical data and maintain a log of assessments.
  • Continuous Evaluation: Risk assessment is an ongoing process. The HIPAA Security Rule does not mandate the frequency of assessments, as it varies depending on the covered entity. Risks can change with new technology deployments, security incidents, or changes in key compliance personnel.
  • Periodic Risk Assessments for Business Associates: Business Associates must conduct risk assessments periodically, typically once a year. Not doing so can result in fines from the Office for Civil Rights (OCR), with penalties ranging from $100 to $50,000 per violation, up to a maximum of $1.5 million per year for each violation.
  1. Secure ePHI Data on Servers

Securing ePHI data on servers is a critical part of HIPAA compliance. Servers must meet specific needs to ensure data protection, including encryption, access controls, and physical security measures. Data minimization, a strategy to improve security, involves collecting and retaining only the minimum necessary information needed for a purpose. This lessens the risk of data breaches and limits the exposure of sensitive information.

  1. Backup Data and Implement Disaster Recovery

Establishing data backup strategies is essential for stopping data loss and maintaining the availability of ePHI. Regular backups should be done, and backup data must be stored securely, preferably in encrypted form. Creating disaster recovery plans ensure that data availability and continuity are maintained during unexpected events such as natural disasters, cyberattacks, or system failures. These plans should include procedures for data restoration and regular testing to verify their efficacy.

To stay compliant, here are some measures you can use.

  • Constant Data Backups: Back up data as often as necessary, either by automating the process or allowing privileged users to handle it manually.
  • Multiple Encrypted Backups: Generate multiple backup copies using strong encryption methods like AES-256 and enable two-factor authentication for added security.
  • Real-Time Auditing: Set up real-time monitoring of backed-up data, regularly test restoration processes, track changes to PHI, and audit event logs based on user roles to detect unauthorized access.
  • Have a Disaster Management Plan: Create a recovery process to ensure business continuity in the event of a disaster, including prioritizing which systems to restore first to minimize business risks.
  1. Dispose of Old Data

HIPAA requires that ePHI be disposed of securely when it is no longer needed. Using procedures for the safe disposal of ePHI helps prevent unauthorized access to old data. Regular audits of data disposal practices help in compliance with HIPAA requirements. These methods can help destroy data, making it unretrievable.

  • Encrypt Before Deletion: Encrypt data before deletion to prevent its recovery, ensuring that even if retrieved, it remains inaccessible.
  • Overwrite Sensitive Data: Overwrite sensitive data with non-sensitive information to eliminate traces of the original data.
  • Magnetic Field Exposure: Expose data storage media to strong magnetic fields (degaussing) to destroy the recorded data.
  • Comprehensive Data Deletion:  Ensure data deletion occurs across all devices and in all forms, including physical, electronic, and backup copies.

Note: Make sure to delete data across all devices and in all forms (physical, electronic, and backup).

  1. Provide Authorized Access Only

Imposing strict access management policies is key for limiting access to ePHI. Only authorized personnel should get the access to sensitive data, and the access should be granted based on the principle of least privilege. Meaning, users are given the least level of access necessary to perform their job. Access controls, such as role-based access control (RBAC) and multi-factor authentication (MFA), help enforce these policies and prevent unauthorized access.

  1. Authenticate User Accounts

Using various authentication methods to verify the identity of users accessing ePHI is important for HIPAA compliance. Strong authentication practices, such as multi-factor authentication (MFA), seals the deal of letting only verified users access sensitive data. MFA combines something the user knows (e.g., password) with something the user has (e.g., a security token) or something the user is (e.g., biometric verification), adding an extra layer of security.

  1. Adopting Integrity and Audit

Adopting measures to guarantee the integrity of ePHI and enable extensive system audits is important. Ensuring data integrity means that ePHI is accurate, complete, and has not been altered or tampered with. Applying audit controls, such as logging and monitoring of access and changes to ePHI, helps to trace any unauthorized activities and gives a record of compliance efforts. Regular audits help identify discrepancies and ensure that security measures are effective.

  1. Implement the Right Security Policies

The critical role of adhering to and enforcing appropriate security policies for HIPAA compliance cannot be overstated. Security policies should address various aspects of data protection, including encryption, access controls, incident response, and employee training. These policies must be often reviewed and updated to reflect changes in regulations, technology, and organizational practices.

  1. Implement a Remediation Plan

Developing and implementing remediation plans to respond effectively to breaches while minimizing damage is essential for maintaining HIPAA compliance. A remediation plan outlines the steps to take when a breach occurs, including notification procedures, containment strategies, and corrective actions. This plan should be tested regularly to ensure its effectiveness and updated as needed to address new threats.

9. Implement Continuous Monitoring

Emphasizing the importance of ongoing monitoring for maintaining HIPAA compliance over time is vital. Continuous monitoring involves regularly reviewing security controls, conducting vulnerability assessments, and tracking compliance with HIPAA requirements. Also, automated monitoring tools can help detect anomalies and potential security incidents in real-time, allowing for prompt response and mitigation. This way, you can sustain compliance efforts and address any issues promptly.

10. Maintain HIPAA compliance documentation

All documentation related to HIPAA regulatory activities needs to be retained and made available to members of the organization and auditors. This includes monitoring logs, training records, risk assessments, disaster recovery plans, and incident response reports.

Apart from these steps, make sure to follow these points as well in making in your software HIPAA-compliant:

  • Use strong passwords
  • Use anti-virus softwares
  • Use a firewall
  • Don’t leave the system unattended
  • Don’t write-down the password in your workspace
  • Keep the electronic devices safe with password protection
  • Conduct security trainings for all the staff
  • Limit network access 

Note: if you want to provide access to staff and patients, do it through a specific network made for public access)

HIPAA rules for healthcare software

Every organization and employee handling PHI must comply with HIPAA, including healthcare software providers. 

Here are the list of five essential HIPAA rules for healthcare software providers:

1. HIPAA Privacy Rule

The HIPAA Privacy Rule mainly applies to covered entities, but Business Associates must protect PHI privacy as outlined in their BAA with the covered entity.

The rule grants individuals rights over their medical information, such as accessing data, making corrections, and filing complaints if data is misused or shared without consent.

Business Associates must understand and apply Privacy Rule requirements to their healthcare software and adhere to any additional limitations imposed by the covered entity through privacy practices or agreements.

2. HIPAA Security Rule

While the Privacy Rule deals with PHI, the Security Rule focuses on ePHI.

Business Associates must implement three types of safeguards:

Technical safeguards: Policies and procedures for access control, integrity controls, and secure data transmission.

Administrative safeguards: Documenting security management processes, analyzing risks to ePHI, and implementing measures to mitigate these risks.

Physical safeguards: Measures and policies to protect PHI on electronic devices, systems, equipment, workstations, and buildings.

3. HIPAA Enforcement Rule

The Enforcement Rule outlines directives for compliance, investigation, and penalties for HIPAA violations.

It details procedures and fines for civil penalties based on OCR investigations triggered by complaints or data breaches to ensure compliance with HIPAA requirements.

4. Breach Notification Rule

The Breach Notification Rule requires Business Associates to notify of a PHI breach within 60 days of becoming aware of it.

Notifications must include details needed for breach reporting, such as a description of the breach, the type of data compromised, and measures for affected individuals.

Specifics on notification timelines may be included in your BAA, as Covered Entities might require faster notification.

5. Omnibus Rule

The Omnibus Rule updates previous HIPAA rules on Security, Privacy, Enforcement, and Breach Notification, holding Business Associates and their sub-contractors accountable for PHI use, disclosure, and security.

Business Associates are liable for:

  • Impermissible uses and disclosures of PHI.
  • Non-compliance with the HIPAA Security Rule.
  • Failing to provide PHI access to the Covered Entity.
  • Failing to provide an accounting of disclosures.
  • Failing to notify the Covered Entity of a breach.
  • Failing to enter into BAAs with subcontractors that create or receive PHI.
  • Not addressing material breaches of BAA by subcontractors.
  • Not limiting requests, use, or disclosure of PHI to the minimum necessary.
  • Not disclosing a copy of ePHI to the covered entity, individual, or individual’s designee.
  • Retaliating against individuals for HIPAA complaints or participation in investigations.
  • Failing to disclose information to the Department of Health and Human Services (HHS) as required.
  • Civil Money Penalties for HIPAA violations.

Managing HIPAA compliance manually for healthcare software is error-prone and increases the risk of non-compliance and data breaches. Manual management makes it harder to address challenges and breaches, potentially missing the 60-day HHS reporting deadline.

This is where VComply helps you with the compliance process and smoothly apply all the five rules mentioned above in your healthcare software. With VComply, you can start a multi-framework compliance program, apply controls, and centralize evidence for extensive oversight and thoughtful decision making.

It doesn’t matter if you’re a beginner or expert, our cutting-edge solutions make it easy to operationalize compliance. The software seamlessly adapts to your needs through automation and centralizes all your frameworks.

With VComply as your compliance management software, you can:

  • Get a holistic overview of your compliance activities on the dashboard.
  • Stay informed through alerts and notifications on compliance updates, deadlines, and regulatory changes.
  • Simplify evidence management with centralized upload and storage functions in various formats while ensuring data security.
  • Eliminate hours and hours of manual work with automated workflows for efficient compliance and informed decision-making.
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Organizations that DON’T Follow HIPAA Rules

Many organizations hold data classified as PHI under HIPAA, yet they are not considered covered entities and thus are not required to comply with its regulations.

To find out if your company needs to fall under the rules of HIPAA, answer these questions:

  • Who is the end user of your software application? Is it a Covered Entity or a Business Associate?
  • What type of data will your software handle? Will it have access to PHI in any form?

If your software does not interact with PHI, HIPAA compliance is not necessary. However, if it does handle PHI, you must ensure compliance with HIPAA regulations.

In HIPAA terms, you are considered a Business Associate if your health tech firm develops and sells software applications that interact with PHI. Beyond the mandatory requirements, adhering to HIPAA compliance also means implementing some of the best global practices in information security, aligning with other compliance frameworks.


Keeping tabs on HIPAA compliance for software applications might seem like a daunting task, but it’s crucial for healthcare organizations. By taking these ten steps—

  • Conducting risk assessments
  • Securing your data
  • Setting up backup and disaster recovery plans
  • Securely deleting of old data
  • Giving authorized access
  • Authenticating user accounts
  • Maintaining data integrity
  • Enforcing security policies
  • Developing remediation plans, and continuous monitoring, to make sure your organization is protecting sensitive patient information and staying compliant with regulations.

Also, regularly following these practices and updating your compliance strategies will help protect ePHI to promote security and trust within your organization.


Where should HIPAA documentation be stored?

HIPAA documentation should be kept in a comprehensive repository so that specific items can be easily accessed when needed for policy implementation or audit requests. 

Ideally, using a secure cloud application allows authorized parties to access the information from any location. It’s important to regularly review and update these documents to reflect any changes in regulations or the IT environment.

What are considered appropriate physical safeguards?

Appropriate physical safeguards use various methods to protect PHI, including:

  • Installing security cameras to monitor computer systems
  • Applying authorized entry to facilities using key cards
  • Securely disposing of media, such as hard drives carrying PHI 
  • Usage of policies to manage the use of PHI on mobile devices

When does a company need a business associate agreement?

Companies must enter into a business associate agreement when they engage a third party to process PHI. This agreement typically specifies the vendor’s access to PHI and details their responsibilities for processing and protecting the information. HIPAA guidelines demand such agreements, and failing to have one in place is considered a regulatory violation.