In the fast-paced world of healthcare technology, developing your own software can provide a significant competitive advantage. It can help things run smoothly and enable you to provide better care to patients. But if that software ever touches a patient’s health information, you need to understand the rules. We’re discussing HIPAA, the law that safeguards patient data. It’s not just a good idea to follow these rules – it’s a legal necessity. This article will guide you through the most important aspects of HIPAA and its application to a new, custom software solution.
What Exactly Is PHI and Why Should You Care?
Before we delve into the technical details, let’s discuss Protected Health Information, or PHI. PHI is any piece of information about a person’s physical or mental health that could be used to identify them. This includes their name, date of birth, Social Security number, and even photographs.
HIPAA’s primary goal is to ensure that this information remains private, accurate, and secure. If you’re building an application that will ever store, use, or send PHI, you have to develop it with HIPAA compliance in mind from the very start. It’s not something you can just tack on at the end.
Key Things to Get Right for Your Software
HIPAA isn’t a single checkbox you can tick. It’s a comprehensive set of rules that covers everything from office procedures to the operation of your software. For a new software solution, the most crucial part is how you handle the technology.
The HIPAA Security Rule: Your Code Must Be Compliant
You can’t get an official “HIPAA certification” for your code. The law doesn’t offer that. Instead, your custom code must be designed and built to meet the rules of HIPAA’s Security Rule und Privacy Rule. Here’s a breakdown of what your code needs to do:
| Requirement Area | What Your Code Must Do |
| Access Control | Ensure unique user IDs, role-based permissions, and automatic session timeouts to prevent unauthorized access. The mandatory use of Multi-Factor Authentication (MFA) is a key new requirement. |
| Audit Logs | Record who accessed what, and when, creating a tamper-proof trail for all PHI activity. |
| Encryption | Scramble data both when it’s being sent over the internet (in-transit using TLS/SSL) and when it’s stored on a server (at-rest). This is no longer optional. |
| Data Retention | Have secure policies for how long data is stored, how it’s backed up, and how it’s securely deleted. |
| PHI Boundary | Never expose PHI in places like web addresses (URLs), error messages, or front-end code. |
| Infrastructure | Your code must run on a HIPAA-compliant hosting environment, which requires a BAA. |
The client is ultimately responsible for ensuring the entire system they use is compliant, and your part of the project is a crucial piece of that puzzle.
Your Tech Stack and The Business Associate Agreement (BAA)
The technology you choose plays a massive role in HIPAA compliance. A critical point from the U.S. Department of Health and Human Services (HHS) is that if a third-party service creates, receives, maintains, or transmits PHI, you must have a Business Associate Agreement (BAA) with them. This is a legal contract that holds them accountable for protecting the data.
What Must Be Compliant?
Think of compliance like a chain: every link has to be strong. This means that not just your software, but everything it touches must be secure.
Hosting platforms: Services such as AWS, Google Cloud, and Microsoft Azure can be configured to meet HIPAA requirements. A BAA is a legal contract where the provider promises to protect PHI according to HIPAA rules.
Third-party services: Any third-party services handling PHI (Protected Health Information) must be HIPAA-compliant. This includes services like OCR for reading faxes, call recording storage, email services, and user authentication providers like Auth0.
File storage: Cloud storage like AWS S3 or Google Drive must be set up correctly to handle PHI.
Without a BAA, you are not legally allowed to handle PHI, even if your technology is sound. This is a crucial point to clarify for potential clients. Your partnership is not just about writing code; it’s a legal commitment to keeping patient data safe.
Your Team and Company: The Role of a Business Associate
Your development company doesn’t need to be “HIPAA-certified” either. However, as soon as your company – the developer – handles, hosts, or even temporarily touches PHI, you become a Business Associate. This has profound legal implications:
- You must sign a Business Associate Agreement (BAA) with your client.
- You must follow internal security protocols and provide training to your staff.
- You must ensure that any subcontractors or platforms you use also meet HIPAA obligations.
If you are only writing the code and the client is the one hosting and managing everything, the primary responsibility for compliance falls on them.
A Real-Life Example: A Medical Practice’s Workflow
Imagine a system that helps a medical practice move away from faxes and Google Sheets to a modern, digital workflow. A custom-built solution, as discussed with Eric, would enable a seamless transition.
For this specific project, here’s what HIPAA requires:
Fax Automation: The system needs to connect to a secure fax provider that can handle faxes with PHI. That data must be encrypted and stored safely as soon as it arrives.
Reading Faxes with AI: Using AI to “read” faxes and fill out forms is a great idea. But the AI service itself must be HIPAA-compliant, and the data must stay protected throughout the entire process.
User Roles and Permissions: The solution must be designed to allow different users, such as patient coordinators or lawyers, to view only the information they need.
Database Security: Instead of a simple spreadsheet, a secure, dedicated database would be used to store PHI. This database would live on a HIPAA-compliant cloud server with encryption.
The Most Common HIPAA Violations in 2025
The Office for Civil Rights (OCR) is increasing its enforcement efforts. Here are the most common violations, which are often the result of everyday mistakes and a lack of a solid compliance plan:
Failure to Conduct a Risk Analysis: Not performing a thorough and up-to-date security risk assessment of all systems. This is the first thing HHS asks for during an audit.
Insufficient Access Controls: Employees accessing PHI without a valid reason, such as “snooping” on a friend’s or celebrity’s medical records.
Lack of a BAA: Failing to have a signed, HIPAA-compliant Business Associate Agreement with every vendor that handles PHI.
Improper Data Disclosures: Sharing PHI without proper authorization, whether through an unencrypted email, a misdirected fax, or a social media post.
Denying Patient Access to Records: Denying a patient’s request for their medical records or failing to provide them within the required 30 days.
Why Custom is the Right Choice for HIPAA
Off-the-shelf software may seem straightforward, but it often falls short in terms of HIPAA compliance. Custom-built solutions let you focus on security from day one. When you build a system from scratch, you can:
Make security a core part of the system: Instead of trying to add security features later, you can build them directly into the foundation of your software.
Control your environment: You have complete control over where your data is hosted, what databases you use, and how third-party tools are integrated. This ensures everything meets the highest security standards.
Simplify audits: A custom solution can be built with a detailed audit trail that fits your client’s exact needs, making it much easier to handle compliance checks.
By focusing on these key points – data protection, legal agreements, and the benefits of building a custom solution – you can clearly demonstrate your value to healthcare clients. You’re not just a tech vendor; you’re a trusted partner dedicated to helping them provide excellent and secure patient care.
