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How to Develop HIPAA-Compliant Software Effectively: 6 Key Steps to Take

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An average cybersecurity breach in the healthcare industry is estimated to cost about $5 million. The reason for such a breach can be as trivial as some hospital clerk falling into a phishing pitfall. Now, considering hundreds, thousands, and even millions of cybersecurity breaches happening yearly, the financial toll has been immense. 

The critical part – most breaches occur due to human error or/and violation of existing data security rules and regulations. That applies to any given piece of healthcare, including healthcare software development. While covering all the existing laws and regulations is daunting. So instead, we would focus on the most important one – HIPAA. 

With the cybersecurity market booming and is expected to reach $217 billion by 2026, more and more companies looking to develop healthcare software have started paying close attention to HIPAA. Further, we have collected all the crucial insights you need about HIPAA and its fundamental principles. Finally, to leave you with more than an overview, we offer distinct steps you need to follow when delivering HIPAA-compliant software

HIPAA-compliant software in healthcare

HIPAA in a Nutshell

In most countries, the healthcare industry takes the most significant chunk of the budget. It is true because keeping citizens healthy is one of the prerogatives of a good state. The same is true for the United States. Statista offers numbers suggesting the US national expenditure reaching $6.2 trillion by 2028 (see Fig.1).

The U.S. National Health Expenditure 2021-2028
Figure 1. The U.S. national health expenditure 2021-2028

The simple arithmetic suggests that billions of dollars lost to poor cybersecurity mean thousands of people will not receive proper care. In such a case, security and privacy in healthcare are not necessary to save costs; it is required to promote patient outcomes. Therefore, tools like HIPAA were purposefully developed to make healthcare more secure and ensure health expenditures are directed at making the industry better and more accessible to those in need.

Standing at the forefront of proper data security, the Health Insurance Portability and Accountability Act (HIPAA) was adopted and enacted in 1996. Since that time, it has undergone several changes to make the standard meet the needs of the technological age. When describing HIPAA in simple terms, it boils down to the following goals:

  • More effortless data transfer for patients
  • Higher protection of billing and payment data
  • Smoother standardization of administrative tasks
  • Greater compliance with principles of consent and confidentiality

HIPAA helps the ones working with patient data ensure that it will be protected in the case of a cybersecurity incident. Whether you are a pharma company testing a new drug or a software development company engaged in healthcare software development, it does not matter. The truth is – you cannot have a good end product without HIPAA compliance.

Significance of HIPAA Regulations

You now know how much an average healthcare cybersecurity data breach costs. HIPAA Journal indicates that HIPAA-related fines range from $5 million to $16 million. In addition, there is an entire HIPAA’s “Wall of Shame,” an online portal dedicated to showing all the given data breaches resulting from HIPAA noncompliance. There are some notable and well-recognized healthcare companies on the list. 

Finally, as of May 2022, there has been a 25% increase in the overall number of healthcare data breaches. In one month, the records of more than 4 million people were exposed. All this evidence shows how significant HIPAA is. Following the standard helps save millions in terms of finances and millions in terms of patient data points

Types of Healthcare Apps to Comply with HIPAA

Not all software development services and products need HIPAA compliance. Therefore, various kinds of healthcare software can see the market. However, only the ones following HIPAA-related data security measures bring user value and profits. Essentially, all the respective healthcare apps that need to comply with HIPAA can be narrowed down to the following two categories:

  1. Type of entity apps. Individuals, organizations, and agencies produce, process, and store protected health information (PHI). Following the definitions offered by the United States Department of Health and Human Services, these are presented as covered entities and business associates. Simply put, apps like video appointment software or a related video calling app fall into the category. 
  2. Data-covered apps. These types of apps directly deal with patient health records. It includes any information that one can use to identify a patient or make a diagnosis. Developing a telemedicine platform falls into the category. 

These two health applications, HIPAA apps, work with patient data. The rule of thumb dictates that if you have sensitive user information on your hands, you must adhere to HIPAA at some point. 

Key Healthcare Software Data Security Requirements 

As you might have noticed, cybersecurity is a serious matter. But, interestingly, there is another side to the coin. Grand View Research indicates the global cybersecurity market is currently worth about $184 billion, with the North American segment covering a significant chunk of it (see Fig. 2).

North America Cyber Security Market
Figure 2. North America cyber security market

It means developing HIPAA-compliant scheduling software is achievable due to emerging cybersecurity instruments and services driving the entire cybersecurity market. Yet, regardless of the objective, there are particular healthcare security software requirements any healthcare software must follow. These correlate to the following PHI identifiers: names, dates, telephone numbers, FAX numbers, geographic data, Social Security numbers, email addresses, medical record numbers, account numbers, license numbers, vehicle identifies, web URLs, Internet protocol addresses, and biometric identifiers like retinal scans along with fingerprints. 

Any healthcare software manipulating one or more of the PHI above identifiers should comply with HIPAA. The product does not fall under HIPAA requirements if your developing app does not process protected health information. Deloitte suggests improving the patient flow process, and a greater emphasis on PHI is the recipe for more robust data security. A list of PHIs ensures that your business development model is HIPAA-compliant. The next important step is to be prepared for a HIPAA audit. 

HIPAA Healthcare Software Audit Checklist

An audit is a word many companies and organizations fear. Nonetheless, it depends on the degree of preparation and knowledge of what will be audited. HIPAA audit follows two critical objectives – ensure that your system vulnerabilities are taken care of and verify that products and services you offer follow HIPAA requirements. The process can vary depending on the kind of covered entity or business associate. Yet, particular documents, information, devices, policies, software, and procedures can fall under HIPAA audit. These are the following:

  • Prevention, correction, and detection policies 
  • Employee profiles 
  • Confidentiality agreements
  • User access regulations
  • Authentication protocols 
  • List of people with ePHI access
  • List of software controlling access to the Internet
  • ePHI encryption techniques
  • ePHI encryption methods
  • Wireless network protocols
  • Means of physical security
  • Emergency ePHI access policies and procedures
  • Password management policies and procedures
  • Information disposal methods 

In other words, the audit above ensures healthcare systems with HIPAA compliance work correctly. More specifically, the audit checks whether medical data used by the software is protected from unauthorized access. It also determines whether PHI can be altered in an unauthorized manner. Finally, the audit investigates whether only authorized users have role-based controls and data management tools that can effectively access, process, and delete PHIs. These aspects all fall under the urge to prioritize data security in healthcare

HIPAA Rules for Building Compliant Software

As we have repeated numerous times, becoming HIPAA-compliant is a profitable approach. First, HIPAA-compliant means saving thousands and even millions in avoided fees and fines. Keeping this in mind, three essential rules determine the success of HIPAA-compliant software.

HIPAA Privacy Rule

The HIPAA Privacy Rule was enacted on August 21, 1996. After the Department of Health & Human Services received more than 56,000 public comments, the final regulation of the rule was introduced on December 28, 2000. The key objective of the provision is to impose and manage standards for the electronic exchange, privacy, and security of health information. 

The Privacy Rule introduced the notion of PHI, which includes any form of data – oral, paper, and electronic. Moreover, the Office of Civil Rights (OCR) is directly responsible for enforcing the HIPAA Privacy Rule. It covers both compliance activities and monetary penalties linked to non-compliance. 

HIPAA Security Rule

The HIPAA Security Rule was first presented on August 12, 1998. Its final form was enacted on February 20, 2003. Compliance with the provision became mandatory in 2006. Following the date, it was the point when all the HIPAA-compliant scheduling software was urged to redefine and double-check its data security methods. The HIPAA Security Rule offers nationwide standards for protecting a person’s ePHI accessed, received, maintained, and used by a covered entity. When it comes to ensuring the integrity, security, and confidentiality of ePHI, the HIPAA Security Rule requires the following safeguards:

  • Administrative. It focuses on assigning a security officer, training employees, and establishing security management processes. These safeguards include risk assessment policies, contingency plans, and role-based access procedures. 
  • Physical. It covers the degree of access to ePHI via cloud computing measures, data centers, and on-premises. The key goal is to restrict unauthorized access. Physical safeguards cover the security of all workstations and the protection of personal devices with access to ePHI. 
  • Technical. It covers the security of technologies used. Within the process of healthcare software development, these safeguards correlate to access controls and audit controls. The former is about user authentication, and the latter is about developers following particular security measures when implementing hardware and software within the software development process. 

These safeguards constitute the essence of the HIPAA Security Rule and help companies cover all the bases to make their data security bulletproof. 


Last is the Health Information Technology for Economic and Clinical Health (HITECH) Act. It was signed into law on February 17, 2009. Its crucial goal – promote the secure adoption of health information technology. The act concerns all the privacy and security measures linked with any type of electronic transmission of health information. 

According to HITECH, healthcare providers and IT partners must implement protected measures to ensure the security of patient medical data when developing HIPAA-compliant software. Importantly, violating the above rules can lead to up to $250,000 in penalties. 

Six Steps to Develop HIPAA-Compliant Software

Now, when you know all ins and outs of HIPAA, its significance, applications, and rules, it is time to proceed to something to leave you with, practical steps one needs to take to develop HIPAA-compliant healthcare software. These steps will help you develop technologies like mHealth, and ensure they have integrated measures protecting PHI. Moreover, these steps will help you not appear on the list of companies that experienced data breaches, among which are many (see Fig. 3).

Data breaches in the U.S. healthcare systems during the past 12 months
Figure 3. U.S. Healthcare data breaches in the past 12 months

Follow the steps mentioned below, and HIPAA-compliant healthcare software will be at your fingertips. 

Step 1: Risk Assessment and Audits

The first phase is to analyze your app’s degree of security. There is a particular guideline for making a proper risk assessment. Yet, in simple terms, you need to check where and how PHI will be stored, transmitted, processed, and maintained. You also need to anticipate potential risks and vulnerabilities when working with PHI. 

Next, assess the possible consequences of a data breach happening with your product. Set risk levels and establish impact possibilities. Finally, after having a risk assessment plan, make regular audits to see whether all the elements are intact. 

Step 2: Regular Adjustment

The second step is about adjustment. If your risk analysis and audits reveal vulnerabilities, you must adjust them. For example, check the minimum requirements, train employees on cybersecurity, and implement two-factor authentication. At this point, your HIPAA-compliant health application will have measures to help correct upcoming or ongoing cybersecurity errors and will help prevent them from reoccurring. Again, this step is vital for the initial stages of the healthcare software development cycle. 

Step 3: Processing Documents

At this point, you have all the basics covered. However, it is when some more sophisticated software security objectives need to be achieved. Most healthcare software is all about working with medical and personal documents. For instance, doctor-patient telehealth solutions process sensitive patient information by sharing medical facts. When dealing with documentation, follow these principles. In general, documentation processing needs elements like proper formatting, ease of understanding, security of storage, and overall simplicity. 

Step 4: Business Relations Mitigation

The next step for developing HIPAA-compliant health applications is about business relationships. You need to ensure your business associates, namely consultants, software developers, and healthcare providers linked to the app developers, have only authorized access and proper role-based guidelines. Remember, you and your business partners are subject to HIPAA audits and can be liable for any data breach. 

Step 5: Long-term Thinking 

Security management should be a long-term process. Even if you are building a Minimum Viable Product, you must have a risk management strategy going past the stage. A starting point for such an approach is to install a network monitoring tool. It is a one-fits-all solution that helps solve various vital tasks. For instance, you get security detection, vulnerability scans, audit trails, HIPAA Security Rule compliance, logging tracking, and automated event analysis. While there is often a free trial for network monitoring tools, it is worth paying a premium in most cases. 

Step 6: Do Not Stop with HIPAA

Proper healthcare systems compliance starts with HIPAA. However, it does not stop with it. To develop a telemedicine app, look at HIPAA and beyond. For a starter, consider the following standards:

  • Health Level Seven (HL7). These standards regulate the management, exchange, and integration. For healthcare software development, it shows how clinical data is transferred between an app and a healthcare provider. 
  • Fast Healthcare Interoperability Resources (FHIR). A newer version of HL7 is easier to use. Yet, it does not have all the elements HL7 offers. 
  • The ICD-10. It is a disease classification coding system. It helps appropriately categorize all the information linked to diseases. Categorization is used correctly across healthcare software.
  • Cross-enterprise document sharing (XDS). The standard explains how the medical information should be shared across parties involved.
  • Electronic visit verification (EVV). The system offers compliance solutions linked to home medical visit verification. It can correlate to telemedicine and mHealth technologies. 

These standards help you cover as many security bases as possible. The more criteria you follow, the lower the chance of a data breach, or you will be held liable for one. HIPAA-compliant scheduling software goes farther than HIPAA itself. Besides, if you want your healthcare app to be sophisticated, you likely need to comply with more standards than HIPAA.

The Bottom Line

All in all, being HIPAA-compliant may seem like a verdict for an uninitiated. However, if you have reached this point in the piece, you have enough theoretical and practical insights to develop a great HIPAA health application. You can see now that having a good idea and being able to translate it into a viable product is not enough. Even if the app offers the best user experience and improves patient outcomes, it can all end after the first HIPAA audit or data breach. 

Being HIPAA-compliant is about ensuring the security of the end product and contributing to the greater good. It is a great chance to achieve both while following well-defined rules and guidelines; we are here to help you. 

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