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With the surge in digital health innovations and use of AI in everyday systems, healthtech companies have become major stakeholders in handling protected health information (PHI). The problem is that storing, accessing, or managing PHI could mean you’re navigating a heavily regulated industry. If you’re a healthtech startup or security lead, HIPAA compliance should be on your radar right away.
HIPAA, which stands for the Health Insurance Portability and Accountability Act, requires healthtech companies to manage electronic health records (EHRs) responsibly, with a focus on privacy and security.
However, HIPAA requirements can be somewhat limited in terms of technical guidance, which can make compliance difficult for healthtech organizations that already face a complex and ambiguous risk landscape.
To help you plan your compliance strategy, our guide will cover:
- How does HIPAA for healthtech work
- What are the relevant compliance requirements
- What are the 5 HIPAA compliance best practices in healthtech
What is HIPAA?
HIPAA is a U.S. federal regulation passed in 1996 to establish mandatory national standards for how healthcare organizations and their partners should protect PHI.
PHI refers to any individually identifiable health information that relates to a person’s past, present, or future medical condition, treatment, or payment for healthcare services. This includes everything from birthdates to insurance details, for example:
- An insurance bill showing “Ms. Patel’s psychiatric evaluation on May 2nd”
- A voicemail message saying “We’re calling to confirm Henry Ford’s chemotherapy appointment”
- A medical record that states “Mr. Jones has a slipped disc”
HIPAA lays out clear requirements for how any in-scope entity should handle sensitive information, primarily through two provisions: the Privacy and Security Rule. Both rules are complemented by the Minimum Necessary Rule, which requires limiting PHI access to only what’s essential for your staff to perform their duties.
“
HIPAA requires that only the minimum necessary PHI be used, disclosed, or requested to accomplish the intended purpose. While this principle is often not explicitly detailed in a business associate agreement (BAA), implementing it effectively can significantly minimize the impact of a breach—both in terms of exposure and regulatory consequences.”
Do healthtech companies need to be HIPAA compliant?
If your organization handles PHI in any capacity, it is required to comply with HIPAA. Healthtech companies often fall under this umbrella—whether they deal with PHI directly or as part of their services while working with a healthcare organization. For example, a mobile-based EHR system or a telehealth app routinely collects, stores, or transmits PHI.
A healthtech company can be a covered entity if it directly provides healthcare services, functions as a clearinghouse, or supports health plans. Covered entities are directly liable to comply with all HIPAA rules, including Security, Privacy, and Breach Notification. Failure to comply can result in a range of consequences, including corrective plans, substantial financial penalties, or even legal escalation.
However, most healthtech organizations comply with HIPAA as business associates—organizations that create, receive, maintain, or transmit PHI while providing services to a covered entity. This includes healthtech vendors whose software provides services that store, process, or analyze PHI to support delivery of healthcare services.
If your healthtech company partners with a covered entity and handles PHI, you must sign a business associate agreement or BAA, as defined by the Privacy Rule. The same requirement applies to any subcontractors you engage, such as software developers and data processors, that access PHI—make sure to draft a BAA to define security obligations for the relationship.
{{cta_withimage13="/cta-blocks"}} | HIPAA compliance checklist
What is a BAA for healthtech companies?
Under HIPAA, a business associate agreement is a legally binding contract between a service user, typically a covered entity, and a service provider, i.e., the business associate. The BAA sets the tone for how PHI will be handled, specifying permissible uses and disclosures, the service provider’s obligations under the Privacy Rule, and the distinct responsibilities of both parties.
Failing to put a BAA in place when required can result in serious consequences, including potential HIPAA violations and fines for both the covered entity and the business associate.
If you sign a BAA as a healthtech company, you’ll likely commit to protocols such as:
- Implementing administrative, technical, and physical safeguards
- Establishing a clear breach notification process
- Maintaining documentation of PHI use and corresponding protections
- Ensuring subcontractors adhere to HIPAA requirements
- Returning or securely destroying PHI at contract termination
In the event of a HIPAA breach, the termination clause in a BAA grants either party the right to end the agreement. For long-term business relationships, it’s ideal to revisit the agreement regularly to align with evolving HIPAA standards and clarify party-specific responsibilities.
HIPAA compliance requirements for healthtech companies
To comply with HIPAA, healthcare organizations must meet the requirements outlined across its core regulatory rules. HIPAA is structured around five main rules*, but the three most important ones are:
- Privacy Rule: Governs what PHI is, who can access it, and under what circumstances
- Security Rule: Outlines the technical, physical, and administrative safeguards for protecting electronic PHI (ePHI)
- Breach Notification Rule: Requires covered entities and business associates to take action and notify the affected individuals when a PHI breach occurs
*Note: The other two rules are Enforcement and Omnibus—not central to healthtech companies but still worth reading and tracking.
The Security Rule tends to be the most relevant for healthtech companies, as it directly applies to systems and technologies used to manage sensitive health data.
The Privacy Rule would be relevant to healthtech platforms that are covered entities and need to support user rights such as access and consent.
The Breach Notification Rule outlines distinct responsibilities, reporting procedures, and required deadlines for different entities, as outlined below:
5 HIPAA compliance best practices for healthtech
As a healthtech company, you can make HIPAA compliance more manageable by adopting these best practices:
- Establish continuous monitoring procedures
- Maintain thorough documentation
- Provide regular staff training
- Perform regular risk assessments and audits
- Leverage automation
1. Establish continuous monitoring procedures
Achieving HIPAA compliance is only the first step. You need to plan ongoing workflows to stay compliant and avoid regulatory scrutiny.
For healthtech organizations, that could mean reducing the use of point-in-time assessments to evaluate how PHI is accessed and used. Establish continuous monitoring systems that provide real-time visibility into your data flows, so you can address potential violations as they occur.
Moving to continuous monitoring will also help you take timely action as required by the Breach Notification Rule, thereby minimizing the risk of HIPAA violations.
{{cta_withimage39="/cta-blocks"}} | The Healthcare compliance checklist
2. Maintain thorough documentation
To support ongoing compliance, document all information related to PHI. This includes, but is not limited to, records such as:
- PHI policies and their updates
- Access logs of who interacted with PHI and when
- Staff training information, manuals, and attendance records
- Incident reports
Maintaining clear and organized documentation enables more efficient and effective audits, whether conducted by an enforcing body like the Office for Civil Rights (OCR) or by a covered entity evaluating you as a business associate.
In the event of a breach, thorough records can also serve as evidence of your organization’s good faith efforts to comply with HIPAA requirements—something the OCR may take into account during an investigation.
Keeping HIPAA-related documents is not just best practice but a mandatory requirement, as you must maintain all compliance-related records for a minimum of six years.
3. Provide regular staff training
Employees play a big role in protecting PHI, so they need to understand how to handle sensitive data and recognize potential risks.
Conduct HIPAA training for your staff at least annually, and additionally whenever there are significant regulatory changes, system updates, or after a security incident. Such training should cover key aspects that impact your workforce operationally, including identifying and handling PHI and reporting any suspected breach without delay.
Your team should also be educated on how to manage the real-world implications of a breach, such as patient harm, legal obligations, and reputational damage.
You can create structured, reusable materials that bring consistency to training sessions and are easier to update.
4. Conduct frequent risk assessments and audits
As your healthtech organization grows and evolves, so does its risk landscape. Changes in technology, processes, or new partnerships can introduce vulnerabilities that may impact the security of PHI. That’s why security teams should conduct regular risk assessments and internal audits.
While HIPAA explicitly requires risk assessments under the Security Rule, it doesn’t specify the cadence. The best practice is to conduct them routinely, as well as whenever there are significant changes that affect the risk environment, such as onboarding a new vendor or adopting new technologies.
Regular vendor risk assessments should also be conducted for all business associates handling PHI. According to Vanta's HIPAA Violations Survey, only 59% of organizations are confident their vendors comply with HIPAA requirements—but they rarely conduct risk assessments to verify compliance. This only creates blind spots that increase the risk of HIPAA violations.
5. Leverage automation
Staying HIPAA-compliant involves repetitive, time-consuming workflows. If your healthtech company manages PHI at a high volume and velocity, the compliance workflows can overwhelm teams quickly.
That’s why you need to implement compliance automation software that can support compliance activities in data-heavy systems. By leveraging these tools, your organization can benefit from:
- Faster compliance through cross-mapping of controls
- Real-time visibility into your compliance posture
- Reduced risk of non-compliance
- Faster adaptation to HIPAA updates
{{cta_withimage13="/cta-blocks"}} | HIPAA compliance checklist
Challenges of HIPAA compliance in healthtech
HIPAA’s complexity can make compliance difficult to achieve and maintain. This is especially true for smaller healthtech businesses or those with limited resources, where the demands of compliance may strain existing team capacities.
One of the most common challenges that healthtech companies face is the lack of clear, prescriptive guidance for HIPAA. Smaller teams may struggle to be decisive about the next step, or miscalculate the time and resources necessary for compliance.
Frequent regulatory updates and the need for ongoing oversight also tend to overwhelm teams and lead to compliance fatigue. The best solution to these challenges is to invest in a HIPAA compliance solution that will automate your compliance journey.
Achieve HIPAA compliance in the healthtech space with Vanta
Vanta is a trust management platform designed to streamline compliance with step-by-step guidance, HIPAA training, and ready-made policies. Its dedicated HIPAA product can offload many of your HIPAA-related tasks, reducing the burden on your internal team.
Vanta provides a clear path to HIPAA compliance by outlining exactly what’s needed to be audit-ready. It comes with capabilities and resources that can support healthtech teams:
- A unified dashboard for real-time risk visibility
- Automate up to 85% of evidence collection with over 375 integrations
- Instructions on how to track and map ePHI
- Customizable policy templates
- Tools to scan, verify, and secure your IT systems and processes
Vanta offers out-of-the-box compliance with 35+ industry-leading frameworks, such as SOC 2, ISO 27001, or HITRUST. With features like cross-mapping, you can boost your compliance program with reduced effort.
Schedule a custom demo to get a more tailored overview for your healthtech team.
{{cta_simple18="/cta-blocks"}} | HIPAA product page
A note from Vanta: Vanta is not a law firm, and this article does not constitute or contain legal advice or create an attorney-client relationship. When determining your obligations and compliance with respect to relevant laws and regulations, you should consult a licensed attorney.
Additional resources
HIPAA for healthtech: A complete guide to compliance
Looking to streamline the work for HIPAA compliance?
With the surge in digital health innovations and use of AI in everyday systems, healthtech companies have become major stakeholders in handling protected health information (PHI). The problem is that storing, accessing, or managing PHI could mean you’re navigating a heavily regulated industry. If you’re a healthtech startup or security lead, HIPAA compliance should be on your radar right away.
HIPAA, which stands for the Health Insurance Portability and Accountability Act, requires healthtech companies to manage electronic health records (EHRs) responsibly, with a focus on privacy and security.
However, HIPAA requirements can be somewhat limited in terms of technical guidance, which can make compliance difficult for healthtech organizations that already face a complex and ambiguous risk landscape.
To help you plan your compliance strategy, our guide will cover:
- How does HIPAA for healthtech work
- What are the relevant compliance requirements
- What are the 5 HIPAA compliance best practices in healthtech
What is HIPAA?
HIPAA is a U.S. federal regulation passed in 1996 to establish mandatory national standards for how healthcare organizations and their partners should protect PHI.
PHI refers to any individually identifiable health information that relates to a person’s past, present, or future medical condition, treatment, or payment for healthcare services. This includes everything from birthdates to insurance details, for example:
- An insurance bill showing “Ms. Patel’s psychiatric evaluation on May 2nd”
- A voicemail message saying “We’re calling to confirm Henry Ford’s chemotherapy appointment”
- A medical record that states “Mr. Jones has a slipped disc”
HIPAA lays out clear requirements for how any in-scope entity should handle sensitive information, primarily through two provisions: the Privacy and Security Rule. Both rules are complemented by the Minimum Necessary Rule, which requires limiting PHI access to only what’s essential for your staff to perform their duties.
“
HIPAA requires that only the minimum necessary PHI be used, disclosed, or requested to accomplish the intended purpose. While this principle is often not explicitly detailed in a business associate agreement (BAA), implementing it effectively can significantly minimize the impact of a breach—both in terms of exposure and regulatory consequences.”
Do healthtech companies need to be HIPAA compliant?
If your organization handles PHI in any capacity, it is required to comply with HIPAA. Healthtech companies often fall under this umbrella—whether they deal with PHI directly or as part of their services while working with a healthcare organization. For example, a mobile-based EHR system or a telehealth app routinely collects, stores, or transmits PHI.
A healthtech company can be a covered entity if it directly provides healthcare services, functions as a clearinghouse, or supports health plans. Covered entities are directly liable to comply with all HIPAA rules, including Security, Privacy, and Breach Notification. Failure to comply can result in a range of consequences, including corrective plans, substantial financial penalties, or even legal escalation.
However, most healthtech organizations comply with HIPAA as business associates—organizations that create, receive, maintain, or transmit PHI while providing services to a covered entity. This includes healthtech vendors whose software provides services that store, process, or analyze PHI to support delivery of healthcare services.
If your healthtech company partners with a covered entity and handles PHI, you must sign a business associate agreement or BAA, as defined by the Privacy Rule. The same requirement applies to any subcontractors you engage, such as software developers and data processors, that access PHI—make sure to draft a BAA to define security obligations for the relationship.
{{cta_withimage13="/cta-blocks"}} | HIPAA compliance checklist
What is a BAA for healthtech companies?
Under HIPAA, a business associate agreement is a legally binding contract between a service user, typically a covered entity, and a service provider, i.e., the business associate. The BAA sets the tone for how PHI will be handled, specifying permissible uses and disclosures, the service provider’s obligations under the Privacy Rule, and the distinct responsibilities of both parties.
Failing to put a BAA in place when required can result in serious consequences, including potential HIPAA violations and fines for both the covered entity and the business associate.
If you sign a BAA as a healthtech company, you’ll likely commit to protocols such as:
- Implementing administrative, technical, and physical safeguards
- Establishing a clear breach notification process
- Maintaining documentation of PHI use and corresponding protections
- Ensuring subcontractors adhere to HIPAA requirements
- Returning or securely destroying PHI at contract termination
In the event of a HIPAA breach, the termination clause in a BAA grants either party the right to end the agreement. For long-term business relationships, it’s ideal to revisit the agreement regularly to align with evolving HIPAA standards and clarify party-specific responsibilities.
HIPAA compliance requirements for healthtech companies
To comply with HIPAA, healthcare organizations must meet the requirements outlined across its core regulatory rules. HIPAA is structured around five main rules*, but the three most important ones are:
- Privacy Rule: Governs what PHI is, who can access it, and under what circumstances
- Security Rule: Outlines the technical, physical, and administrative safeguards for protecting electronic PHI (ePHI)
- Breach Notification Rule: Requires covered entities and business associates to take action and notify the affected individuals when a PHI breach occurs
*Note: The other two rules are Enforcement and Omnibus—not central to healthtech companies but still worth reading and tracking.
The Security Rule tends to be the most relevant for healthtech companies, as it directly applies to systems and technologies used to manage sensitive health data.
The Privacy Rule would be relevant to healthtech platforms that are covered entities and need to support user rights such as access and consent.
The Breach Notification Rule outlines distinct responsibilities, reporting procedures, and required deadlines for different entities, as outlined below:
5 HIPAA compliance best practices for healthtech
As a healthtech company, you can make HIPAA compliance more manageable by adopting these best practices:
- Establish continuous monitoring procedures
- Maintain thorough documentation
- Provide regular staff training
- Perform regular risk assessments and audits
- Leverage automation
1. Establish continuous monitoring procedures
Achieving HIPAA compliance is only the first step. You need to plan ongoing workflows to stay compliant and avoid regulatory scrutiny.
For healthtech organizations, that could mean reducing the use of point-in-time assessments to evaluate how PHI is accessed and used. Establish continuous monitoring systems that provide real-time visibility into your data flows, so you can address potential violations as they occur.
Moving to continuous monitoring will also help you take timely action as required by the Breach Notification Rule, thereby minimizing the risk of HIPAA violations.
{{cta_withimage39="/cta-blocks"}} | The Healthcare compliance checklist
2. Maintain thorough documentation
To support ongoing compliance, document all information related to PHI. This includes, but is not limited to, records such as:
- PHI policies and their updates
- Access logs of who interacted with PHI and when
- Staff training information, manuals, and attendance records
- Incident reports
Maintaining clear and organized documentation enables more efficient and effective audits, whether conducted by an enforcing body like the Office for Civil Rights (OCR) or by a covered entity evaluating you as a business associate.
In the event of a breach, thorough records can also serve as evidence of your organization’s good faith efforts to comply with HIPAA requirements—something the OCR may take into account during an investigation.
Keeping HIPAA-related documents is not just best practice but a mandatory requirement, as you must maintain all compliance-related records for a minimum of six years.
3. Provide regular staff training
Employees play a big role in protecting PHI, so they need to understand how to handle sensitive data and recognize potential risks.
Conduct HIPAA training for your staff at least annually, and additionally whenever there are significant regulatory changes, system updates, or after a security incident. Such training should cover key aspects that impact your workforce operationally, including identifying and handling PHI and reporting any suspected breach without delay.
Your team should also be educated on how to manage the real-world implications of a breach, such as patient harm, legal obligations, and reputational damage.
You can create structured, reusable materials that bring consistency to training sessions and are easier to update.
4. Conduct frequent risk assessments and audits
As your healthtech organization grows and evolves, so does its risk landscape. Changes in technology, processes, or new partnerships can introduce vulnerabilities that may impact the security of PHI. That’s why security teams should conduct regular risk assessments and internal audits.
While HIPAA explicitly requires risk assessments under the Security Rule, it doesn’t specify the cadence. The best practice is to conduct them routinely, as well as whenever there are significant changes that affect the risk environment, such as onboarding a new vendor or adopting new technologies.
Regular vendor risk assessments should also be conducted for all business associates handling PHI. According to Vanta's HIPAA Violations Survey, only 59% of organizations are confident their vendors comply with HIPAA requirements—but they rarely conduct risk assessments to verify compliance. This only creates blind spots that increase the risk of HIPAA violations.
5. Leverage automation
Staying HIPAA-compliant involves repetitive, time-consuming workflows. If your healthtech company manages PHI at a high volume and velocity, the compliance workflows can overwhelm teams quickly.
That’s why you need to implement compliance automation software that can support compliance activities in data-heavy systems. By leveraging these tools, your organization can benefit from:
- Faster compliance through cross-mapping of controls
- Real-time visibility into your compliance posture
- Reduced risk of non-compliance
- Faster adaptation to HIPAA updates
{{cta_withimage13="/cta-blocks"}} | HIPAA compliance checklist
Challenges of HIPAA compliance in healthtech
HIPAA’s complexity can make compliance difficult to achieve and maintain. This is especially true for smaller healthtech businesses or those with limited resources, where the demands of compliance may strain existing team capacities.
One of the most common challenges that healthtech companies face is the lack of clear, prescriptive guidance for HIPAA. Smaller teams may struggle to be decisive about the next step, or miscalculate the time and resources necessary for compliance.
Frequent regulatory updates and the need for ongoing oversight also tend to overwhelm teams and lead to compliance fatigue. The best solution to these challenges is to invest in a HIPAA compliance solution that will automate your compliance journey.
Achieve HIPAA compliance in the healthtech space with Vanta
Vanta is a trust management platform designed to streamline compliance with step-by-step guidance, HIPAA training, and ready-made policies. Its dedicated HIPAA product can offload many of your HIPAA-related tasks, reducing the burden on your internal team.
Vanta provides a clear path to HIPAA compliance by outlining exactly what’s needed to be audit-ready. It comes with capabilities and resources that can support healthtech teams:
- A unified dashboard for real-time risk visibility
- Automate up to 85% of evidence collection with over 375 integrations
- Instructions on how to track and map ePHI
- Customizable policy templates
- Tools to scan, verify, and secure your IT systems and processes
Vanta offers out-of-the-box compliance with 35+ industry-leading frameworks, such as SOC 2, ISO 27001, or HITRUST. With features like cross-mapping, you can boost your compliance program with reduced effort.
Schedule a custom demo to get a more tailored overview for your healthtech team.
{{cta_simple18="/cta-blocks"}} | HIPAA product page
A note from Vanta: Vanta is not a law firm, and this article does not constitute or contain legal advice or create an attorney-client relationship. When determining your obligations and compliance with respect to relevant laws and regulations, you should consult a licensed attorney.
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