HIPAA Compliance

HIPAA is directly applicable to covered entities (e.g., U.S. healthcare providers, health plans, and clearinghouses who process PHI) and their "business associates". (businesses that have access to PHI processed by covered entities). While HIPAA is a domestic U.S. regulation, it has extraterritorial reach, meaning it can apply to foreign entities, including Indian businesses, under specific circumstances.

Many Indian IT services like tele-health, medical billing, or medical transcription, rely on the $4.9 trillion U.S. healthcare market for business. If a company processes U.S. patient data of a covered entity, it automatically becomes a business associate, requiring HIPAA compliance. Non-compliance can lead to penalties, making it critical for Indian firms to comply with HIPAA mandates to maintain trust and access this lucrative market.

The following is list of businesses that may need to comply with HIPAA, if doing business with a covered entity in the United States:

• Hospital Management System Providers – Companies that develop or support software systems for hospital administration.

• Electronic Health Records (EHR) Service Providers – Organizations that develop or manage EHR platforms, storing and processing patient health data for US-based clients.

• Medical Billing and Coding Companies – Companies that process claims, manage reimbursements, accessing PHI to facilitate payments.

• Health Information Technology (IT) Vendors – Providers cloud storage, data hosting, or cybersecurity services, that process (ePHI).

• Medical Transcription Services – Companies that transcribe dictated medical reports, accessing PHI to produce patient records.

• Healthcare Clearinghouses – Organizations that process nonstandard health information into standard formats (e.g., for billing) or vice versa, handling PHI during data conversion.

• Data Analytics Firms – Entities that analyze healthcare data for quality improvement, research, or population health management, using PHI provided by covered entities.

• Telemedicine Platform Providers – Companies offering virtual care platforms that facilitate remote consultations, storing or transmitting PHI during patient interactions.

• Revenue Cycle Management (RCM) Companies – Firms that manage financial processes for healthcare providers, including billing, collections, and payment processing, requiring PHI access.

• Consulting Firms – Firms providing consulting services (e.g., compliance audits, risk assessments) that involve reviewing or handling PHI.

• Document Management Services – Companies that store or archive physical or electronic records containing PHI.

• Patient Communication Service Providers – Entities managing patient portals, appointment reminders, or tele-health communications.

Applicability of HIPAA for Indian Companies

HIPAA Compliance Requirements

HIPAA compliance ensures that patient data remains private and secure while allowing healthcare providers to operate efficiently. HIPAA compliance is centered around three core principles - privacy rule, security rule and, breach notification rule.

The Security Rule and Privacy Rule are the core regulations for protecting confidentiality, integrity and availability of PHI, especially in digital systems.

The Breach Notification Rule requires disclosures in case of a data breach to relevant parties including the affected individuals, the regulator of HIPAA and the news media.

HIPAA Security Rule - Key Requirements

1. Administrative Safeguards:

   • Document and implement policies and procedures for managing ePHI security, like HIPAA risk assessments and training for staff who handle ePHI.

   • Develop a contingency plan (e.g., data backup, disaster recovery procedures) and periodic evaluation of security policies and procedures. These are critical for Indian IT firms handling ePHI to ensure business continuity.

   • Assign a HIPAA compliance officer to oversee compliance.

   • Legal Reference: 45 CFR § 164.308 – Requires risk analysis and security management processes.

2. Physical Safeguards:

   • Restrict server room access to only authorized IT staff.

   • Document policies for workstation use and security (e.g., locking computers when unattended) procedures for media disposal and reuse (e.g., securely wiping hard drives). These are relevant for HIPAA compliance for Indian companies.

   • Legal Reference: 45 CFR § 164.310 – Mandates facility access controls and device security.

3. Technical Safeguards:

   • Use encryption, access controls, and audit logs to protect ePHI.

   • Ensure secure data transmission (e.g., via SSL).

   • Design and implement integrity controls (e.g., mechanisms to verify ePHI hasn’t been altered) and strong authentication mechanisms(e.g., unique user IDs, no sharing of user ids). These are critical for HIPAA compliance for SaaS companies in India.

   • Example: Enable end-to-end encryption for all patient video calls to prevent interception.

   • Legal Reference: 45 CFR § 164.312 – Requires encryption and access controls.

Implementation of the mandates in the HIPAA Security Rule prevents data breaches, which are common in 2025 due to increased cyberattacks on healthcare systems (e.g., ransomware attacks on healthcare rose 50% from 2020-2024 per an IBM report). conduct regular risk assessments for SaaS and on-premise systems. Follow industry standard encryption and access controls to meet the security rule requirements.

HIPAA Privacy Rule - Key Requirements

1. Patient Rights:

   • Patients can access their PHI, request corrections, and get an accounting of disclosures.

   • Providers must inform patients of their rights via a Notice of Privacy Practices.

   • Example: Provide patients a portal to view their medical records, complying with patient access rights.

   • Legal Reference: 45 CFR § 164.520 – Requires a Notice of Privacy Practices; 45 CFR § 164.522 – Grants rights to access and amend PHI.

2. Use and Disclosure Limits:

   • PHI can only be used or shared for treatment, payment, or healthcare operations (TPO) without authorization, unless permitted by law (e.g., public health reporting).

   • Other uses, like marketing, require patient authorization.

   • Example: You may share patient data with a lab for testing (allowed for treatment). But seek consent from the patient to share it for research purposes.

   • Legal Reference: 45 CFR § 164.502 – Limits uses and disclosures of PHI; 45 CFR § 164.508 – Requires authorization for non-TPO uses.

3. Minimum Necessary Standard:

   • Use or disclose only the minimum PHI needed for the purpose.

   • Example: A billing company only accesses patient payment details, not full medical histories, to process claims.

   • Legal Reference: 45 CFR § 164.502(b) – Enforces the minimum necessary rule.

4. Business Associate Agreements (BAAs):

   • Contracts with business associates must ensure they protect PHI.

   • Example: A Texas hospital signs a BAA with a cloud EHR provider to ensure data security.

   • Legal Reference: 45 CFR § 164.504(e) – Requires BAAs for business associates.

The Privacy Rule protects patient trust and prevents unauthorized data sharing. In 2025, with rising telehealth and SaaS apps, ensuring proper consent and limiting disclosures is critical.

HIPAA Breach Notification Rule - Key Requirements

The HIPAA Breach Notification Rule requires covered entities and their business associates to promptly notify individuals, the Department of Health and Human Services (HHS), and, in some cases, the media following a breach of unsecured Protected Health Information. A PHI breach is defined as the unauthorized acquisition, access, use, or disclosure of PHI that compromises its security or privacy. For Indian IT firms handling U.S. patient data, compliance ensures trust and avoids penalties.

• Conduct a Root Cause Analysis: After a potential breach, analyze and document the reasons for PHI breach. Document relevant details of the breach like the number of breached records, corrective actions taken and preventive actions planned.

• Notify Affected Individuals: Inform individuals within 60 days of breach discovery via first-class mail or email (if consented), detailing the breach and protective steps.

• Notify HHS: Report breaches to the HHS Office for Civil Rights (OCR). Breaches affecting fewer than 500 individuals are reported annually; larger breaches require immediate reporting.

• Media Notification: For breaches affecting 500+ individuals in a state or jurisdiction, notify prominent media outlets to inform the public.

• Legal Reference: 45 CFR § 164.400-414 – Governs breach notification requirements and timelines.

Example: If an Indian EHR vendor’s unencrypted database is hacked, exposing U.S. patient records, they must assess the breach, notify affected patients within 60 days, and report to HHS, ensuring compliance to maintain U.S. client trust.

In 2025, with healthcare breaches rising, Indian firms must implement robust breach response plans. Regular risk assessments and staff training, supported by experts like Bellwether, ensure compliance with the Breach Notification Rule and safeguard your business.

Bellwether has developed a world-class Enterprise Risk Management framework for healthcare industry by combining functional, information security and legal expertise. Our HIPAA consulting clients range from start-ups to large enterprises.

HIPAA Challenges in 2025

In 2025, the rise of tele-health applications using artificial intelligence (AI) and cloud-based systems introduced new complexities for HIPAA compliance, with fines for violations reaching up to $1.5 million per incident.

The major challenge is securing electronic PHI (ePHI) in cloud-based and AI-driven systems which involves significant technical know-how along with a good understanding of the HIPAA regulatory mandates.

The HIPAA Security Rule (45 CFR § 164.312) requires encryption and access controls, but many organizations struggle to implement these in cloud platforms or AI tools used for diagnostics or patient analytics. The increasing use of Internet of Things (IoT) devices, like remote patient monitors, further complicates compliance, as these devices often lack robust security, risking violations of the Security Rule’s technical safeguards.

Another challenge is ensuring proper patient consent and data sharing under the HIPAA Privacy Rule (45 CFR § 164.502).

With telehealth and third-party vendors (e.g., EHR platforms, billing services), organizations must maintain Business Associate Agreements (BAAs) and obtain patient authorization for non-treatment uses, like research. Today's focus on AI-driven analytics heightens this risk, as organizations may inadvertently use PHI for unauthorized purposes without clear consent, requiring robust consent management systems.

Compliance with breach notification requirements (45 CFR § 164.408) also poses challenges, as cyberattacks are more frequent in 2025.

The Security Rule mandates notifying affected individuals and the Department of Health and Human Services within 60 days of a breach affecting 500+ people. Many organizations, especially smaller SaaS providers, lack formal breach response plans, leading to delays in notification of breaches.

Bellwether’s readiness assessments can help with HIPAA compliance for Indian businesses as well as for businesses across the globe to develop breach protocols and align with HIPAA, ensuring continuous compliance.

HIPAA compliance - A brief summary

What is HIPAA

HIPAA is a federal law in the United States defining the data protection requirements of Protected Health Information (PHI). HIPAA applies to healthcare providers, health plans, clearinghouses, and their business associates, including Vendors and SaaS providers handling PHI. HIPAA compliance ensures data security and patient trust.

Security and Privacy

The Privacy Rule controls how PHI is used and shared, requiring measures like patient consent and access controls. The Security Rule sets standards for protecting electronic PHI (ePHI) through technical, physical, and administrative safeguards, such as encryption and risk assessments.

Who Must Comply

HIPAA applies to covered entities like healthcare providers and their business associates, including SaaS providers. Global organisations handling PHI in the U.S. must also comply. Bellwether supports various entities to meet these requirements.

Vendor Due Diligence and Contracts Review

We assess your third-party vendors (also known as Business Associates/BAs) to ensure they have the same level of protection that is mandated by the HIPAA in both data security and data privacy domains. Signing a Business Associate Agreement (BAA) with vendors who process PHI is mandatory.

Training & Awareness

Employee-focused training modules need to be designed and delivered to all employees and contracts who handle PHI in the organization.

Breach Notification

In case of a breach of PHI, either accidental or intentional, HIPAA requires that the organization needs to notify the patients/individuals to whom the PHI belongs to. Apart from notifying individuals, the organization also has to notify the Office of Civil Rights (OCR) under the Department of Health and Human Services (HHS)

Our experienced HIPAA consultants can drive your Risk Management program

Need a HIPAA Compliance Consultant?

Bellwether has developed a world-class Enterprise Risk Management framework by combining functional, information security and, legal expertise. Our HIPAA compliance consulting clients range from start-ups to large enterprises.

Get in touch today to talk to a HIPAA Compliance Consultant and explore the ways to manage your enterprise risk and uncover value.

Author Bio:

HIPAA - Lead Consultant

The author heads the practice of Cybersecurity and Data Privacy Compliance at Bellwether. At Bellwether, he has been advocating the core principles of EU-GDPR like data minimization, purpose limitation, explicit consent and privacy by design and default. Apart from delivering end-to-end consulting engagements in the DPDP Act, 2023, EU-GDPR, HIPAA, PCI-DSS, FDA 21 CFR part 11, NIST CSF, he leads data privacy and infosec consulting practice at Bellwether with a team of experienced consultants in the field of global data privacy regulations.

LinkedIn: https://in.linkedin.com/in/balu0103