Once an MSP steps into the healthcare sector, compliance with Health Insurance Portability and Accountability Act (HIPAA) is a nonnegotiable. The law sets a standard to safeguard patient data in an industry that’s become a top target for bad actors.
Consider: Healthcare data breaches reached unprecedented levels in 2023, with 725 incidents reported to the Office for Civil Rights (OCR) for exposing or compromising over 133 million patient records.
What happens if your MSP inadvertently causes a HIPAA violation for a healthcare client? What steps can you take to minimize risk to both your healthcare clients and your MSP business?
Know Your Role in HIPAA Compliance
MSPs working with healthcare providers hold a dual responsibility. Brian Arnold, director of legal affairs at Huntress, said MSPs are often classified as business associates under HIPAA due to their access to protected health information (PHI). That means MSPs must follow HIPAA themselves as well as help clients uphold security, privacy, and breach notification requirements.
But compliance can be challenging, given the varied levels of sophistication in healthcare IT environments.
For example, many healthcare practices lack in-house IT expertise, leading to issues like outdated software and unsecure systems. MSPs often step in to fill this gap. However, if your services or systems aren’t configured correctly or fail to meet HIPAA standards, your clients are vulnerable to violations.
Lee Kim
And that could leave you on the hook, according to Lee Kim, senior principal in cybersecurity and privacy at the Healthcare Information and Management Systems Society (HIMSS). “Both the healthcare organization and MSPs must comply with applicable federal, state, and local laws and regulations, including HIPAA,” she said.
Understand the Consequences of a HIPAA Violation
If an MSP’s action — or inaction — leads to a HIPAA violation, both the MSP and the healthcare entity could face penalties. The OCR, part of the Department of Health and Human Services, enforces HIPAA. OCR doles out potential consequences, including fines, mandatory corrective action plans, and even criminal charges in severe cases.
The level of scrutiny depends on whether the healthcare organization can invoke a safe harbor. For example, under the 2021 HITECH Act amendment, organizations that demonstrate recognized security practices for at least 12 months may receive reduced penalties if a violation occurs, Kim noted. Without this protection, even if the MSP was the cause, both the MSP and the healthcare entity risk investigation.
What to Do if a HIPAA Violation Occurs
In a worst-case scenario, an MSP’s response can substantially influence the outcome. Here are some things to keep in mind:
- Arnold advised MSPs to be “cooperative, responsive, honest, and own up to any mistakes.” Transparency with the healthcare organization and regulators is key, as is quickly addressing the incident’s root cause.
- Investigations can be daunting. Arnold said OCR will scrutinize everything — the driver of the actual problem, your processes, your documentation, and your controls. So, MSPs must keep detailed records of all compliance efforts, from security assessments to employee training logs.
Brian Arnold
- MSPs should support clients in conducting a thorough investigation, completing accurate reports, and communicating effectively with regulatory bodies. By presenting a clear corrective action plan, MSPs can help mitigate penalties. This reassures clients and regulators that MSPs are taking steps to prevent future violations.
Proactive Compliance Is Key
MSPs must take proactive steps to prepare for compliance challenges before they become legal liabilities. Kim suggested adopting the NIST Cybersecurity Framework to align with healthcare clients, while conducting regular risk assessments to stay ahead of vulnerabilities.
Educating clients on their role in maintaining compliance — from securing physical devices to understanding phishing threats — can prevent many common issues. “The training and basic configurations within your network are things people aren’t always fully appreciative of,” Arnold said. This makes regular education efforts indispensable.
Regulators scrutinize smaller healthcare practices just as closely as large systems, despite their limited resources, Arnold shared. Of course, all healthcare practices are busy places, so you might have to work harder to get the staff’s attention to help them stay informed, compliant, and protected.
By prioritizing compliance, educating clients, and supporting strong security measures, MSPs can reduce risk, protect their clients, and build a reputation as a trusted healthcare IT provider.
Download this HIPAA compliance checklist to learn how many aspects of HIPAA compliance an MSP might touch, and why both MSP staff and healthcare client teams should be well-versed in security best practices. And learn more in ChannelPro’s Compliance and Regulations MSP Answer Center.
Featured image: iStock
