How HIPAA Compliance Affects Small Business Doctors’ Offices

by | Apr 19, 2023

For most small business doctors’ offices, it’s easy to focus on patient care and forget how critical HIPAA compliance is. The recent sentencing of the ex-CEO of Psychotherapy Centre Vastaamo, which was breached in 2020, has shaken the European healthcare industry by showing the impact of compliance failure. The stolen data impacted tens of thousands of patients, with the hacker blackmailing the clinic and affected patients with threats of publicly revealing their healthcare details. As a psychotherapy clinic, the data stolen was especially sensitive for those involved. While a suspect was eventually arrested, authorities also brought charges against the CEO.

The case highlights the importance of medical data security practices and the legal consequences of failing to protect valuable patient information. With hackers and ransomware being two of the biggest threats for U.S.-based medical providers, compliance is crucial for small business doctors’ offices to protect patient privacy and avoid costly penalties. That’s why it’s important to know what HIPAA compliance is, the risks of not complying, and how data security can help protect smaller healthcare practices.

HIPAA Compliance: A Brief Overview

In 1996, a federal law called the Health Insurance Portability and Accountability Act (HIPAA) was enacted to improve patient health protection. That created a standard for data management across the healthcare industry. The HIPAA Privacy Rule outlines a standard for using and disclosing protected health information (PHI). In connection, the Security Rule covers how electronic PHI is stored, transferred, and protected while still being made accessible to patients. Healthcare providers, insurance companies, and other entities that manage patient data must follow the outlined rules. It’s enforced by the U.S. Department of Health and Human Services (HHS), with compliance failure leading to hefty fines and legal troubles.

The Risks of Non-Compliance to Small Business Doctors

Failing to comply with HIPAA can have dire consequences for small business doctors at healthcare practices, including:

  • Fines and penalties: The HHS’s Office for Civil Rights (OCR) can impose large fines on non-compliant practices. Those can range from $100 to $50,000 per violation, with a yearly cap of $1.5 million.
  • Legal action: HIPAA violations can also lead to civil and criminal lawsuits, resulting in more fines and causing long-term damage to a practice’s reputation.
  • Loss of trust: Patients are likelier to lose faith in a healthcare provider that fails to protect their sensitive information, leading to a decline in patient retention and overall revenue.
  • Increased vulnerability: Non-compliant practices may become targets for cybercriminals, as many will test the waters before committing to a full attack. Proactive protection through HIPAA compliance makes smaller medical providers an unappealing target.

The European psychotherapy clinic case shows medical data breaches can cause long-lasting legal and financial complications. The cost of penalties and legal fees can completely shut down smaller providers. Additionally, with growing cybercrime concerns, U.S. lawmakers may take inspiration from European policies and hold CEOs accountable for compliance failure.

The Benefits of Investing in Data Security

HIPAA compliance is not only legally required but is also a long-term investment into the success of any healthcare provider. That makes data security vital to safekeeping patient medical information, though it takes expert knowledge to set up and maintain. Here are some of the investment benefits:

  • Risk mitigation: Following HIPAA standards helps prevent data breaches through stronger security measures. It also makes clinics less appealing to attack and encouragers hackers to move on to more vulnerable targets.
  • Enhanced patient trust: Patients are more likely to choose and remain loyal to healthcare providers prioritizing their privacy and data security.
  • Competitive advantage: Strong data protection measures can set a practice apart from competitors. As an advertising point, it can be used to attract new patients and keep current ones.
  • Streamlined operations: Using HIPAA-compliant systems and processes can boost efficiency and make it easier to manage patient data through better practices.

Maintaining compliance may seem daunting, but partnering with an IT company can help. Doctors can trust ones certified through programs like Compliancy Group’s HIPAA Seal of Compliance, as they have proven their ability to meet strict data security guidelines.

Small Business Doctors Should Always Take HIPAA Seriously

The recent European data breach case is a stark reminder of the importance of data security in the healthcare industry. While fines and legal complications concern many doctors’ offices, these policies are less about punishing clinics and more about protecting patients. However, the nature of HIPAA compliance means that small business doctors’ offices are impacted the most, making it critical to have professional data security.

Investing in protection fulfills a legal obligation and contributes to a healthcare practice’s long-term success and viability. With over 71% of healthcare data breaches labeled as hacking/IT incidents in 2022, poor data security continues to be the biggest risk. Using a certified managed security service provider (MSSP) can help protect small business doctors’ offices and improve patient data handling by ensuring they meet HIPAA compliance.

Get IT Support