Cloud Computing in Healthcare: A Guide to HIPAA Compliance in the Cloud

Cloud computing is the wave of the future in healthcare, but it does come with its challenges. Learn more about how to take advantage of the cloud while achieving HIPAA compliance.

What is Cloud Computing in Healthcare? What are its Benefits?

Healthcare has long been an industry resistant to change. Part of this is due to the need for compliance with strict regulations, but it also seems the collective group is simply set in its ways. This stagnation has led to a disjointed system where information is siloed within individual organizations. There are signs of progress, however, as the industry is turning the corner with cloud computing shining new light on what is actually possible within the healthcare world.

Cloud-based solutions offer the potential to break down these information barriers and allow for better collaboration between healthcare providers, something that the industry has been eagerly awaiting for years. As more and more healthcare organizations adopt cloud solutions, we will likely continue to see a transformation in the way healthcare is delivered.

This article will walk you through the good, the bad, and the ugly of cloud computing in the healthcare industry and what your business needs to do to become and remain HIPAA compliant.

Cloud Computing Benefits

Just as cloud-based applications have transformed how we do business, cloud computing is now changing how healthcare is delivered by facilitating new opportunities for providers to coordinate care and improve patient outcomes. Here are a few well-documented benefits of cloud computing in the healthcare space:

Secure Data Storage

Cloud computing provides a secure, reliable way to store and access encrypted data from anywhere in the world, as providers have stringent security measures to protect data from unauthorized access.

Records Access

In the ever-changing healthcare landscape, one constant is the need for accurate and up-to-date medical records. One of the most significant benefits of the cloud is that it provides organizations quick and easy access to medical records. Documents were often stored onsite in the past, making it more difficult and time-consuming to retrieve them. With the cloud, records can be stored off-site and accessed remotely, which saves time, improves efficiency, and reduces the risk of errors.

Provider Connectivity and Collaboration

With cloud computing, healthcare organizations can quickly connect and collaborate with other providers by seamlessly sharing patient information. By being able to access relevant medical data from anywhere at any time, providers can quickly consult with colleagues and make better treatment decisions for their patients.

Patient Communication

Cloud computing helps healthcare providers communicate with patients and families through a variety of secure online portals, including video conferencing, telehealth options, chat, email, and more. This flexibility allows for better coordination of care and a better overall healthcare experience, leading to improved patient outcomes.


One of the most significant advantages of cloud computing is its scalability. Organizations often have to invest significantly in hardware and software with traditional IT infrastructure. This can lead to issues if the inquiry for services suddenly increases, as there may not be enough capacity to meet the demand. Cloud computing provides a more flexible way to keep pace, as organizations only need to pay for the resources they actually use.

Medical Research

Cloud computing allows sharing of research and data with the global medical community, which can help accelerate the development of new treatments. It also presents healthcare providers with an easy way to stay up-to-date on the latest advances in their field and provides a valuable resource for diagnosing and caring for patients.

Reduced Costs

Healthcare organizations are under constant pressure to reduce costs while still providing high-quality care, which is why many are turning to the cloud. Cloud computing saves money by enabling remote servers to store data and applications, reducing the need for on-site infrastructure, and making it easier for organizations to scale up or down as needed.

Improved Patient Experience

The only way organizations survive in the hyper-competitive healthcare industry is to provide improved patient care while controlling inflating costs. The better the provided experience means more happy customers who will continue to pay for a specific organization’s services — a clear win-win for everyone involved.

Cloud Computing Challenges

While the cloud is clearly the wave of the future, this revolution doesn’t come without difficulties. As technology continues evolving at an incredible pace, the compliance standards and their stewardship simply have to keep up.

Security and Privacy of Patient Data

As healthcare organizations increasingly move to cloud-based solutions for storing and sharing patient data, the challenges of maintaining security and privacy grow exponentially. In healthcare, these organizations are required by law to maintain a high level of security and privacy for patient data. However, the inherent nature of the cloud (for instance, shared resources and limited control) often creates a layer of difficulty as rapidly evolving cybersecurity attacks make it hard to stay current with the latest threats. As a result, healthcare organizations must be vigilant in protecting patient data by maintaining strict internal cybersecurity protocols and selecting a reputable and reliable cloud provider with experience handling sensitive information.

Specialized Expertise

Patients’ personal information must be protected at all costs, and any breach can have dire consequences. As such, it’s no surprise that many healthcare organizations are turning to the cloud for their data needs. However, finding specialized experts who can implement a robust cybersecurity strategy can be a challenge as many are familiar with cloud computing or healthcare separately because the two have very different regulatory requirements. As a result, healthcare organizations often must either train their existing staff on cloud compliance or hire expensive consultants if they want to continue with an in-house security team.

Migrating to the Cloud

Migrating data to the cloud can be a challenge for any organization. Not only do you have to worry about the physical infrastructure, but you also have to worry about the security and compliance of your data and that it remains accessible from anywhere in the world. For organizations that don’t have the necessary expertise on staff that can adequately handle the complexity of this extensive project, it may be in their best interest to contract with a professional service that will ensure that all data is moved safely and securely.

Penalties for Non-Compliance

The potential cost of a HIPAA violation can be significant. The maximum penalty for each violation is $50,000, with a combined maximum of $1.5 million per year if multiple provisions are violated. If that isn’t enough, violators may also be subject to criminal penalties and imprisonment.

The Department of Health and Human Services (HHS) Office for Civil Rights (OCR) is responsible for enforcing the HIPAA rules. OCR investigates complaints filed against covered entities and their business associates and conducts compliance reviews. When OCR finds violations, it has the authority to impose Civil Monetary Penalties (CMPs) on covered entities and business associates.

What Is HIPAA?

The Health Insurance Portability and Accountability Act, or HIPAA, was enacted in 1996 and is a set of regulations that aim to protect the privacy of patient health information from unauthorized disclosure. HIPAA applies to any organization that handles Protected Health Information (PHI), including healthcare providers, insurers, and even business associates such as billing companies. Under HIPAA, all PHI must be kept confidential and secure, and only authorized individuals should have access to it.

HIPAA closely follows the cybersecurity framework developed by The National Institute of Standards and Technology (NIST), a non-regulatory agency of the United States Department of Commerce. NIST’s mission is to promote innovation and industrial competitiveness by developing computer security standards and guidelines and providing a risk-based approach for organizations to manage their cybersecurity threats. It is intended to be used by organizations of all sizes, sectors, and industries. The framework is not a one-size-fits-all solution, but it can be customized to fit the needs of any organization.

The framework consists of five core functions: Identify, Protect, Detect, Respond, and Recover. Each function represents a different aspect of cybersecurity risk management. It is regularly revised to reflect changes in the cybersecurity landscape, with its most recent updates announced as recently as 2022.

Required Compliance

If an individual or group meets the definition of a covered entity or a business associate, they are required by law to comply with HIPAA Rules.

Covered Entities

Under HIPAA, a “covered entity” is any organization that deals with protected health information and includes hospitals, clinics, pharmacies, health plans, clearinghouses, and even some employers. Covered entities are required to take steps to safeguard patient data from unauthorized access, use, or disclosure.

Covered entities must comply with HIPAA by implementing physical, technical, and administrative safeguards to ensure that patient information remains confidential and secure. If a covered entity fails to comply with HIPAA, it may be subject to hefty penalties or fines.

Business Associates

According to HIPAA, business associates are individuals or organizations that perform specific functions on behalf of a covered entity such as claims processing, billing, and data analysis.

To comply with HIPAA, they must enter into a Business Associate Agreement (BAA) with the covered entity detailing the nature of their relationship and outlining their obligations concerning PHI. Business associates are also required to implement appropriate safeguards to protect the privacy and security of PHI, and they must report any incidents of unauthorized access or disclosure to the covered entity.

What Are HIPAA Rules?

HIPAA is divided into a set of rules that more precisely define the various categories of data protection and compliance.

Security Rule

The HIPAA Security Rule is a federal law that requires covered entities to implement security measures to protect the confidentiality, integrity, and availability of electronic protected health information (ePHI). In addition, the Security Rule establishes national standards for conserving ePHI, which are classified into the following three administrative safeguards.

  • Administrative Safeguards include conducting risk assessments, risk management policy, training, contingency plans, restricting 3rd party access, reporting security incidents, etc.
  • Physical Safeguards include facility access controls, the use and positioning of workstations, mobile device procedures, inventory of hardware, etc.
  • Technical Safeguards include access control, ePHI authentication, encryption and decryption tools, activity logs and audit controls, automatic log-off of PCs and devices, etc.

Privacy Rule

The HIPAA Privacy Rule is a set of federal regulations that protect individuals’ health information privacy. The rule establishes standards for how covered entities handle protected health information and gives individuals the right to access, control, and correct their PHI. The Privacy Rule also limits how covered entities can use and disclose PHI for marketing and fundraising purposes. In addition, the rule requires them to get authorization from patients before using or disclosing their PHI for most other purposes.

Breach Notification Rule

The HIPAA Breach Notification Rule is a federal law that requires covered entities to provide sufficient notification following a data breach. The rule covers a wide range of information, including but not limited to health information, demographic information, financial information, and contact information.

In the event of a data breach, covered entities must notify affected individuals, the US Department of Health and Human Services (HHS), and, in some cases, the media. The notification must be made promptly and include information about the nature of the breach, the type of information involved, and the steps affected individuals can take to protect themselves from identity theft and fraud.

Covered entities that fail to comply with the HIPAA Breach Notification Rule can be subject to civil and criminal penalties.

Enforcement Rule

The HIPAA Enforcement Rule describes the types of investigations HHS may conduct, the process HHS will follow in conducting investigations, the imposition of civil money penalties for violations of the HIPAA Administrative Simplification Rules, and procedures for hearings. The rule also references specific procedures that apply to investigations and hearings conducted by HHS’ Office for Civil Rights (OCR). Finally, the rule sets forth requirements for covered entities regarding complaints filed with OCR, contact information that must be made available to individuals about how to file complaints with OCR, and recordkeeping requirements related to complaints filed with OCR.

Omnibus Rule

The HIPAA Omnibus Rule is a set of regulations finalized by the US Department of Health and Human Services in 2013. It was designed to address advances in technology and changes in the healthcare landscape since HIPAA was first enacted in 1996.

Under the rule, covered entities must ensure that patient data is properly secured in transit and at rest. They must also confirm that only authorized individuals have access to patient data and that patients are notified of their rights concerning their health information.

The Omnibus Rule applies to all entities covered by HIPAA, including healthcare providers, insurers, and other health plans.

Minimum Necessary Rule

The HIPAA Minimum Necessary Rule is a federal law that takes steps to ensure that only the minimum amount of PHI necessary is used, disclosed, or requested. The rule applies to all uses and disclosures of PHI, including those made for routine activities such as treatment, payment, and healthcare operations. There are some exceptions to the Minimum Necessary Rule, but in general, covered entities must make a good faith effort in limiting the exposure of PHI to the least number of people possible to satisfy a particular purpose or carry out a specific function.


The HITECH Act of 2009 was established as a successor to HIPAA in response to the growing concerns about the misuse of electronic health information. The act expanded the scope of HIPAA by applying its privacy and security protections to a broader range of entities, including business associates, and by increasing the potential penalties for non-compliance.

The HITECH Act required the Department of Health and Human Services to develop new privacy and security rules. These rules went into effect in 2013 and included provisions that strengthened the restriction on the use and disclosure of protected health information, expanded the rights of patients to access their own information, and established new requirements for covered entities to safeguard electronic health information.

Steps in Becoming HIPAA Compliant

  • Choose a cloud computing service that is already HIPAA compliant.
  • Regularly back up data and store it in a secure location.
  • Track who has access to data and why, and revoke access when necessary.
  • Implement HIPAA Security Rule safeguards.
  • Hire a dedicated security staff that includes a designated privacy officer, security officer, and compliance committee.
  • Conduct effective training and education.
  • Create privacy and security policies, procedures, and organizational standards.
  • Regularly conduct security risk assessments and self-audits.
  • Establish and maintain Business Associate Agreements (BAAs).
  • Create a Breach Notification Protocol.
  • Respond promptly to detected offenses and take corrective action.
  • Document all evidence of compliance.
  • Actively enforce all of the above.

Managed Cloud Solutions For Healthcare

Is your healthcare organization trying to optimize the cloud? Meriplex offers fully managed cloud solutions that can help your organization become more efficient and more secure. Contact us for more information.