Health Insurance Portability and Accountability Act (HIPAA)

What is HIPAA?

The Health Insurance Portability and Accountability Act (HIPAA) is a US federal law protecting health-related personal information, enacted in 1996.

In plain language, it protects the medical files that hospitals and other health organizations handle and defines what protected health information is and what entities are required to comply with the law.

Entities covered under HIPAA include:

• Health providers, such as clinics, doctors, dentists, nursing homes, psychologists, or pharmacies;
• Health plan providers, such as health insurance providers;
• Health clearing houses.

It is important to note that the law covers only the electronic transaction of health data.

Key components of HIPAA

• Privacy rule. This part of HIPAA protects the privacy of individually identifiable health information, known as Protected Health Information (PHI). It sets limits on the use and disclosure of such information and establishes a series of patient rights regarding their health information.

• Security rule. This rule complements the Privacy Rule. It sets standards for securing patient health information that is held or transferred in electronic form. The Security Rule operationalizes the protections contained in the Privacy Rule by addressing the technical and non-technical safeguards organizations must implement to secure individuals' electronic PHI (ePHI).

• Transactions and code sets rule. This rule standardizes the codes used to describe diseases, injuries, other health conditions, and patient treatment and billing information. It aims to make healthcare administration more efficient and cost-effective.

• Unique identifiers rule. Under HIPAA, each healthcare entity, such as individuals, employers, health plans, and healthcare providers, must have a unique 10-digit national provider identifier (NPI).

• Enforcement rule. This rule contains provisions relating to compliance and investigations, the imposition of civil money penalties for violations, and procedures for hearings.

• Breach Notification Rule: HIPAA requires covered entities to notify affected individuals, the Secretary of Health and Human Services, and, in some cases, the media when a breach of PHI occurs.

Consequences of Failing to Comply with HIPAA

Non-compliance with HIPAA can lead to severe consequences, including financial penalties and legal action. The consequences are categorized based on the level of negligence and can range from civil to criminal penalties.

1. Civil Penalties:

   • Tier 1: Unknowing violations with a minimum fine of $100 per violation, up to $50,000.
   • Tier 2: Violations due to reasonable cause, not willful neglect, with fines ranging from $1,000 to $50,000 per violation.
   • Tier 3: Willful neglect violations corrected within a certain time frame, with fines between $10,000 and $50,000 per violation.
   • Tier 4: Willful neglect violations not corrected within a specified period, with fines of $50,000 per violation.

2. Criminal Penalties:

   • Tier 1: Unintentional violations can result in fines of up to $50,000 and one year of imprisonment.
   • Tier 2: Violations committed under false pretenses can lead to fines of up to $100,000 and up to five years of imprisonment.
   • Tier 3: Violations committed with the intent to sell, transfer, or use PHI for personal gain or malicious harm can result in fines up to $250,000 and up to ten years of imprisonment.

3. Additional Consequences:

   • Reputational Damage: Public knowledge of a HIPAA violation can severely damage an organization's reputation.
   • Loss of Business: Clients and patients may lose trust in the organization, leading to a loss of business.
   • Corrective Actions: Organizations found non-compliant may be required to implement corrective measures, such as revising policies and procedures, providing staff training, and undergoing regular audits.

How Finite State Helps You Comply with HIPAA

Finite State offers a comprehensive solution to support compliance with HIPAA by helping health organizations improve their software supply chain security and monitor for vulnerabilities. Finite State

• Enforces Secure Coding Practices: Seamless integrations into existing CI/CD pipelines automatically analyze source code and compiled binaries for common security vulnerabilities and coding errors. This allows engineers to identify vulnerabilities hidden deep within legacy code and third-party libraries and detect and address issues early in the development process.
• Offers Real-Time Threat Detection: Integrations with vulnerability databases provide up-to-date information on the latest threats and exploits, allowing for the proactive identification of potential risks before they can be exploited.
• Automates Vulnerability Identification: Using our advanced binary and source code SCA, vulnerabilities can be identified as they're introduced across the SDLC to help teams keep applications secure.
• Provides Comprehensive SBOM Solutions: Automatically generate Software Bill of Materials throughout the SDLC and easily compile detailed information on all components in your products, including open-source libraries, third-party dependencies, and custom code to improve transparency and identify potential security risks in your software supply chain.

Strong cybersecurity requires a collective effort. Talk to the team today to discover how Finite State can help you comply with HIPAA.