How to Make Healthcare Software HIPAA-Compliant: A Full Guide

Published on July 4, 2021

You can avoid security and privacy risks by making your healthcare software HIPAA-compliant. Failing to comply with HIPAA rules in healthcare can result in unauthorized access to protected health information (PHI), improper information disclosure, and data leaks. This can be costly and have devastating consequences for your organization.

This article explains how you can achieve HIPAA compliance in medical software and protect your patients’ sensitive health data. We’ve also included a comprehensive HIPAA compliance software checklist to help you easily assess your systems. 

Sounds good? Let’s start with the basics.

What is HIPAA compliance for software development?

What are HIPAA regulations and why companies must follow them

HIPAA (the Health Insurance Portability and Accountability Act) is a federal law that regulates the protection of health information. It outlines security standards and privacy requirements for the management of personally identifiable medical and health data.

The act applies primarily to protected health information or PHI—health data that can be linked to a specific person as it includes, for example, their:

  • Name, place, and date of birth

  • Biometric identifiers (e.g., retina scans and fingerprints)

  • Vehicle identifiers (license plates or serial numbers)

  • Health insurance and social security numbers

  • Previous encounters with healthcare facilities and government

  • Payment information (credit card numbers or bank ID)

  • Contact data (home address, IP address, phone number, or email)

  • Photos (primarily facial images)

For example, HIPAA applies to medical records and hospital bills. However, the act doesn’t apply to basic health metrics (unless these metrics uniquely identify a patient) because they are considered de-identified data.

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

Who needs to meet HIPAA requirements?

Companies that need to comply with HIPAA regulations

All companies and employees who work with protected health information need to comply with HIPAA regulations. This includes two categories of users: covered entities and business associates.

Covered entities

Covered entities include organizations and medical workers who handle personal and protected health information directly. Some examples are:

  • Healthcare providers (hospitals, clinics, nursing homes, pharmacies, doctors, psychologists, and dental practitioners)

  • Healthcare plan providers (insurance companies, health maintenance organizations, government medical care programs, and military healthcare programs)

  • Healthcare clearinghouses (entities that transfer and process data between healthcare providers and health plans, such as community management systems and billing services)

You can use an online tool developed by the Department of Health and Human Services (HHS) to define if you are a covered entity. All covered entities must adhere to the rules outlined by HIPAA and HITECH (Health Information Technology for Economic and Clinical Health).

Business associates

Business associates are the third-party companies who access PHI as they perform certain functions on behalf of covered entities. Some common examples of business associates are:

  • Cloud hosting vendors

  • Backup service subcontractors

  • Email service providers

  • Public accountant firms

  • Medical transcriptionists

  • IT consultants

  • Healthcare software vendors and developers

All business associates must sign a business associates agreement (BAA) that outlines their responsibilities when they work with PHI.

HIPAA requirements for healthcare providers

Covered entities and business associates must follow privacy and security rules

The HIPAA act has five titles (sections). These sections outline requirements for health insurance, tax-related provisions, health plans, and revenue offsets, as well as standards for electronic healthcare data security.

Read also: Health Insurance Software Development Guide

Title II (Administrative Simplification) is most relevant for software development as it establishes national standards for the security, use, and disclosure of PHI. In addition to technical standards, this section covers organizational and administrative requirements. You need to consider all of them to make your custom software HIPAA-compliant.

Here are the primary requirements and rules that you need to follow as a covered entity.

Policies and procedures

Healthcare organizations must create policies and procedures for the secure use, management, and exchange of personal health data. You should document all the administrative, technical, and physical safeguards you have in place.

Organizations should store written iterations of security policies and records of assessments for at least six years. You should also review and update your documentation at least once a year, as well as after any structural changes in your organization.

Employees who work with protected health information should confirm in writing that they’re familiar with your organization’s procedures and the sanctions for HIPAA violations. Finally, your organization should regularly train employees in compliance and cybersecurity.

HIPAA privacy officer and security personnel

Covered entities should appoint a chief privacy officer and security personnel. These employees are responsible for developing privacy policies and overseeing that security measures comply with HIPAA.


Your software should ensure the secure management of protected health data. Organizations can achieve this by implementing technical safeguards such as secure data transfer, access control, and mechanisms that monitor all activity in the software platform. 

As a covered entity, you also need to implement physical safeguards. For example, you should limit access to workstations, electronic media, and data centers (servers) on your premises.

Risk analysis

Risk analysis is an ongoing part of security management. During a risk assessment, you should consider how effective your security measures are given your company’s size, hardware and software infrastructure, and budget constraints. You should also assess the possible impact of data breaches in healthcare.

Associate agreements

As a covered entity, you’ll regularly work with business associates—third-party businesses and individuals who have some level of access to your patients’ data. Some examples are cloud platforms, email services, and software developers. They must also comply with HIPAA because they can store and transfer your protected health data.

Basically, you need to sign a BAA with anyone who handles your PHI. The agreement varies according to the type of associate, but at the very least, it should:

  • Describe how the associates can use PHI

  • List safeguards that associates will use to ensure data security and privacy

  • Outline the steps that will be taken in the event of a data breach that originated from the business associate’s side

The document should also specify the business associate’s responsibilities and the conditions for termination of the agreement. Additionally, associates need to make separate subcontractor BAAs with providers that will handle protected health information on their behalf.

Transaction standards

Healthcare providers should follow standard mechanisms for processing data. For example, you need to adopt a standard mechanism for electronic data interchange for submitting and processing insurance claims. 

Identifier standards

Every individual with access to PHI—such as doctors, nurses, management and admin staff in your organization—should have a national identifier (a ten-digit provider identifier code).

Information availability and sharing

Patients have the right to obtain, change, or update their health information. As a covered entity, you are obliged to respond to all requests for such information within 15 days. 

You also need to restrict access to sensitive health information within your organization. In other words, your employees should only be able to access the PHI required for their work. 

Healthcare providers can disclose personal health data to third parties, but only if they received a patient’s consent or written authorization. Organizations usually outline how they may disclose health information in the patient agreement.

While these requirements may feel like a burden, they can enhance the security of your data significantly. More importantly, they can improve the interoperability of health information and allow providers to exchange sensitive health data much faster.

Breach notification

Healthcare entities are obliged to notify the Department of Health and Human Services (HHS) and patients about data breaches. This must happen within 60 days of discovering the breach. The notification should mention the nature of compromised data, whether it was viewed or copied, and the estimated extent of the breach.


As a healthcare provider, you should ensure that your electronic health data is protected from corruption or unauthorized changes. This means that you should design your software platforms in a way that prevents any unauthorized access to your databases. 

Traditionally, companies implement public-key cryptography (SSL, PGP, and SSH) to encrypt every piece of data in the system. However, some healthcare providers are now investing in HIPAA-compliant blockchain solutions with decentralized and distributed data management.

Data disposal

Providers must destroy health data they haven’t used for more than six years or after they no longer need it for medical services. That’s why you should regularly review health information and erase data you no longer need.

This section summarized the main HIPAA requirements for healthcare providers. Bear in mind that the OCR can impose penalties for noncompliance on organizations that violate HIPAA rules. These can range from $100 to $50,000 per incident up to a maximum of $1.5 million and include criminal charges.

How to comply with HIPAA software requirements

HIPAA compliance starts with an in-depth company audit

When developing healthcare software, you’ll mostly have to comply with HIPAA’s technical safeguards, but administrative and physical aspects of the act are no less important. To make the process easier, here are some effective strategies to ensure HIPAA compliance for software development.

1. Assess your IT infrastructure and policies

You need to conduct an in-depth evaluation of your healthcare facility to pinpoint flaws in your security and administrative policies, as well as gaps in compliance. After this, you can develop an effective plan to address these shortfalls.

This process goes beyond regular risk analysis of your security measures—you should audit your IT infrastructure, administrative structure, policies, and business associate agreements. 

During the audit, you should:

  • Identify the PHI you collect, store, and send to other entities and associates

  • Outline your policies and procedures for data management

  • Evaluate the security mechanisms that protect the privacy and integrity of health data

  • Assess risks and potential weaknesses in your electronic health record (EHR) and hospital management systems (HMS)

  • Review access logs for your electronic databases

  • Analyze data security incidents since the previous audit

  • Determine the potential impacts of data breaches 

Conducting an in-depth audit can be challenging and tedious the first few times you do it. As an alternative, seasoned tech companies like Demigos can quickly evaluate your infrastructure and even automate risk assessment with proprietary tools.

2. Implement cybersecurity measures

Data breaches are a serious threat to healthcare facilities, which is why your technical safeguards should minimize the risk of unauthorized access. You can achieve this by implementing software features such as:

  • A secure password policy. Ideally, passwords should contain at least eight characters (including letters, numbers, and special symbols) and exclude vocabulary words or commonly used combinations. 

  • Multi-factor authentication. With this in place, users can only access the system after entering additional methods of verification. These can be biometrics, face ID, or one-time generated passwords sent to their personal devices or email.

  • Automatic log-off. This automatically terminates sessions after a set time or period of inactivity. Shorter sessions can help you protect health data because perpetrators will have less time to tamper with it.

  • Intrusion detection. Adaptive authentication and intrusion detection tools can detect suspicious activity and temporarily ban user accounts to prevent data breaches in healthcare.

With these measures in place, your system will be well protected from external threats. But how do you reduce the risk of internal threats?

3. Introduce access control

For optimum security, doctors, nurses, and receptionists should have access to only the patient information they need for their job. As a result, you need to introduce different levels of authorization for your platform.

Start by assigning a unique ID to each user. After that, you can create a list of privileges for every employee. This will help you control how much access each user has to PHI.

You should also implement role-based access. This mechanism regulates database access based on an employee’s role and relationship to your organization. When combined with authorization levels, role-based access will ensure your compliance with HIPAA during custom software development.

4. Encrypt data

Unencrypted devices and data transfer across open networks pose a significant risk to patient data. 

Many companies use public email and cloud services to store and transfer data. What’s more, employees often store PHI on their laptops, tablets, or smartphones. Just one lost device or compromised account can open the way for a massive data breach. 

However, you can prevent these problems if you encrypt protected health information. Encryption means converting data into an unreadable format which can only be unlocked with a security key. 

As a covered entity, you should invest in robust cryptographic protocols (PGP, IPsec, SSH, and TLS/SSL) to secure your data. Depending on the size of your organization, you could also encrypt databases, cloud servers, and your employees’ portable devices.

While the HHS has simplified HIPAA software security requirements for telemedicine and telehealth software to help providers reach more patients during the lockdown, these relaxations are temporary. This is why you should invest in secure communication protocols and encryption sooner rather than later.

5. Improve your backup solutions

Server crashes, natural disasters, data corruption, and ransomware can make critical files inaccessible. However, reliable data backup and disaster recovery mechanisms ensure your organization can operate even in emergency mode.

To improve your disaster recovery and backup, you should:

  • Develop policies for backing up PHI and other essential data

  • Back up medium and high-risk data daily

  • Store data backups in a secure facility (on-premise or remote)

  • Regularly review your storage systems (monitor logs, analyze system downtime, and detect failures to back up data)

Alternatively, you can partner with managed services providers to schedule backups for your entire IT infrastructure, including critical business applications and patient health data.

6. Incorporate user tracking

Healthcare organizations should create a log management solution to get HIPAA certification for medical software. Ideally, you should be able to see who accessed, updated, copied, or deleted any piece of data and when this happened.

Your software should also record and analyze security incidents and failed login attempts and automatically notify the chief security and privacy officers about data breaches.

7. Manage data efficiently

You should minimize the amount of PHI you store in your systems. Typically, PHI records can include duplicate data, old backups, and medical records of previous patients. 

Custom software tools and algorithms can automatically scan for unutilized and idle data sets. This can help you delete unnecessary PHI from your databases, archives, and backup storage. Additionally, you should erase data logs that contain protected health data.

You should also dispose of PHI on portable storage devices, including USB flash drives, DVDs, laptops, network cards, and smartphones. Be aware that data can hide in unexpected places, such as on scanners and photocopiers. 

Healthcare companies can use third-party services to manage health data. However, you always need to sign a BAA with anyone who will handle the PHI you possess (even email vendors and cloud providers).

Summary: Checklist for building HIPAA-compliant software

HIPAA-compliant medical software development

If you’re still not sure that your platform is fully compliant, we’ve made this HIPAA compliance checklist for software development to help you out. Follow these guidelines to ensure that your platform meets all privacy and security requirements.

User authorization

  • Train your employees to use complex passwords.

  • Prohibit your staff from reusing passwords.

  • Use a multi-factor authentication mechanism.

  • Add automatic log-off.

  • Use a system of privileges and role-based access control to limit how much PHI your employees can access.

  • Ensure that PHI can’t be modified or permanently deleted without authorization.

  • Use advanced encryption standards (128-, 192- or 256-bit encryption) and communication protocols (PGP, IPsec, SSH, and TLS/SSL).

  • Adopt alternative measures to ensure the confidentiality and integrity of protected health data when encryption is not appropriate.

  • Document all your decisions regarding user authentication, role-based access, and encryption tools.

Activity monitoring

  • Provide every user with access to PHI with a unique ID.

  • Make sure your system records all login attempts.

  • Set up your software to make automatic reports about suspicious activity (e.g., unsuccessful login attempts, access from unusual devices, and new access locations).

  • Store logs about interactions with protected health information for at least six years.

Emergency measures and backup

  • Ensure that your software regularly copies and backs up data from your EMRs and EHRs.

  • Test whether your platform can restore critical business data and PHI in the event of data breaches, server crashes, and ransomware locks.

  • Assess detailed emergency and data recovery policies and procedures.

  • Find out if your critical business processes can continue in emergency mode.

  • Review and update emergency plans and backup data solutions at least once a year.

The above HIPAA compliance software checklist covers major privacy and security rules. The audit protocol on the HHS website gives further details of compliance requirements.

Making healthcare software HIPAA-compliant with Demigos

By adhering to the HIPAA compliance requirements for software security, you can reduce your internal and external threats and ensure your health-sensitive data stays safe.

Still, lack of encryption, insecure communication channels, and lack of proper access control are common problems for medical software. Plus, gaining HIPAA certification is particularly difficult for mobile apps and remote patient monitoring software development. Even something as trivial as push notification can constitute a HIPAA violation.

In short, developing secure and HIPAA-compliant software is always challenging. An experienced IT company can help you establish and ensure ongoing compliance.

At Demigos, we know the details of HIPAA-compliant software development. Our team has extensive experience creating secure healthcare solutions, such as EHR and EMR platforms, ERP and CRM software, and mobile healthcare apps. We work only with world-renowned and HIPAA-compliant hosting services.

Contact us today to learn how you can achieve and maintain HIPAA compliance when building medical software for your organization!

Ivan Dunskiy
Ivan has been working in the tech industry for more than 10 years as a Quality Assurance Engineer, Mobile Software Developer, and Product Manager. Co-founder of 2 startups.