If your organization works in or around the healthcare industry, you may fall under the category of a HIPAA covered entity. Determining this is critical because if HIPAA applies, your organization must comply to avoid costly fines and protect patient data.
Key takeaways:
- Whether you qualify depends on the type of data your organization collects, stores, or transmits
- There are three main types of HIPAA covered entities.
- All covered entities are required to follow specific HIPAA privacy and security rules.
Frameworks like HITRUST CSF can help organizations streamline and standardize HIPAA compliance.
What Data Does HIPAA Exist to Protect?
The Health Insurance Portability and Accountability Act (HIPAA) was created to safeguard protected health information (PHI). PHI includes any data that relates to a patient’s medical history, conditions, treatments, or healthcare payments. When this information is linked with personally identifiable information (PII),such as names, addresses, or Social Security numbers,it is considered PHI under HIPAA.
To determine whether HIPAA applies to your organization, ask one key question: do you store, process, or come into contact with PHI? This applies to both physical records and electronic PHI (ePHI) across your systems. Tools such as PII or PHI scanners can help identify where this sensitive information exists.
Bottom line: If your organization handles PHI in any form, you likely qualify as a HIPAA covered entity and must maintain HIPAA compliance, regardless of your specific healthcare role or industry niche.
Who Counts as a HIPAA Covered Entity?
An organization does not need to be a hospital or clinic to count as a HIPAA covered entity. The most common example is a doctor’s office that regularly manages PHI, but covered entities actually fall into three main categories:
- Healthcare Providers – Individuals or organizations that deliver treatment, products, or procedures. Examples include private doctors and their practices, group care facilities (such as nursing homes), pharmacies, and their employees.
- Health Plans and Administrators – Organizations involved in health insurance coverage and claims processing. Examples include insurance companies, health maintenance organizations (HMOs), and employer-sponsored health plans.
- Healthcare Clearinghouses – Service providers that process health information between nonstandard and standardized formats. Examples include billing companies and other intermediaries that transmit PHI between covered entities.
If your organization fits into any of these categories, even indirectly, you likely qualify as a HIPAA covered entity. However, organizations that work closely with covered entities, such as accountants, attorneys, or IT service providers, may instead be classified as Business Associates. These third parties must sign Business Associate Agreements (BAAs) that define how they safeguard PHI and share responsibilities with the covered entity.
In practice, a Business Associate may face many of the same compliance requirements as a covered entity. To be sure, you can use the Centers for Medicare and Medicaid Services (CMS) tool to check your status or read article related to HIPAA compliance advisor.
What Do Covered Entities Have to Do?
If your organization qualifies as a HIPAA covered entity or Business Associate, you must implement strong administrative, technical, and physical safeguards to protect PHI. This means monitoring all PHI you handle, preventing unauthorized access, and reducing risks that could lead to a breach.
Under HIPAA, covered entities are required to comply with three primary rules:
- Privacy Rule – Ensures that PHI is only used or disclosed with patient authorization, by the patient’s representative, or under limited permitted uses (such as public interest or scientific research). Even then,
disclosures must be restricted to the “minimum necessary.” - Security Rule – Requires proactive measures to protect the confidentiality, integrity, and availability of PHI. This includes conducting regular risk analyses and implementing administrative, physical, and technical safeguards.
- Breach Notification Rule – If PHI is improperly used or disclosed, organizations must notify the affected individuals, the Secretary of Health and Human Services (HHS), and—if more than 500 individuals are affected, the media via press release.
Important note: Failure to comply with the Privacy or Security Rule may itself be considered a breach and trigger notification requirements, even if no data was actually exposed. Noncompliance can also result in penalties under the HIPAA Enforcement Rule, including significant fines.
HIPAA Covered Entities
Optimize Your HIPAA Compliance Today
If your organization qualifies as a HIPAA covered entity or Business Associate, you must implement strong administrative, technical, and physical safeguards to protect PHI. This means monitoring all PHI you handle, preventing unauthorized access, and reducing risks that could lead to a breach.
Under HIPAA, covered entities are required to comply with three primary rules:
- Privacy Rule: Ensures that PHI is only used or disclosed with patient authorization, by the patient’s representative, or under limited permitted uses (such as public interest or scientific research). Even then, disclosures must be restricted to the “minimum necessary.”
- Security Rule: Requires proactive measures to protect the confidentiality, integrity, and availability of PHI. This includes conducting regular risk analyses and implementing administrative, physical, and technical safeguards.
- Breach Notification Rule: If PHI is improperly used or disclosed, organizations must notify the affected individuals, the Secretary of Health and Human Services (HHS), and—if more than 500 individuals are affected—the media via press release.
Important note: Failure to comply with the Privacy or Security Rule may itself be considered a breach and trigger notification requirements, even if no data was actually exposed. Noncompliance can also result in penalties under the HIPAA Enforcement Rule, including significant fines.
Is your organization a HIPAA Covered Entity? Contact us today to streamline your compliance!
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