Preparing for 2025 HIPAA Changes: What Healthcare Organizations Need to Know

Most industries roll out new regulations when there are significant shifts and evolutions in the way business is conducted. In healthcare, despite some seismic shifts, there have been no major changes for nearly a decade…until now.

The healthcare industry is on the brink of significant regulatory updates as HIPAA prepares to roll out changes in 2025. These updates are designed to address the challenges posed by an increasingly digital healthcare ecosystem, from evolving cybersecurity threats to the expansion of telehealth and patient rights. For healthcare organizations—from large hospital systems to home healthcare agencies—these changes represent both an opportunity to strengthen compliance and a call to reassess current practices.

The Cost of HIPAA Non-Compliance  

As healthcare organizations know, HIPAA is more than just a set of guidelines. It’s got a bite. Failing to comply with HIPAA regulations comes with steep consequences that extend far beyond financial penalties. Healthcare organizations, whether large hospitals or home healthcare agencies, face significant risks to their operations, reputations, and patient trust when they fail to safeguard protected health information (PHI). These risks will only intensify as upcoming HIPAA updates place greater emphasis on cybersecurity, data privacy, and patient rights.

Financial Penalties

HIPAA violations can result in severe financial consequences, with fines determined by the nature and extent of the non-compliance. Fines for HIPAA violations currently (2024) range from $100 to $50,000 per violation, depending on the organization’s level of negligence, and can total more than $2 million annually for repeated violations of the same provision.

More specifically, fines depend largely on an organization’s culpability, with smaller fines for a general lack of knowledge and increasing with an organization’s negligence in regard to HIPAA protections.

Beyond OCR fines, organizations may face the added burden of legal fees and settlements from class-action lawsuits filed by affected patients, further amplifying the financial toll.

Operational Risks

The operational impact of non-compliance often compounds the financial burden. An OCR investigation can lead to corrective action plans (CAPs) that require substantial investments in time, technology, and personnel. 

In fact, organizations may need to conduct a complete overhaul of their IT infrastructure, retrain staff, and implement stricter policies, all while continuing day-to-day operations. This can be burdensome in terms of resource demand including staff, time, and money.

Additionally, non-compliance often leaves gaps in security cybercriminals can continue to exploit, leading to data breaches or ransomware attacks that disrupt patient care and damage critical workflows. Some breaches can create a domino effect, impacting multiple organizations along the supply chain as we saw with 2024’s Change Healthcare Attack. Such interruptions can erode confidence in an organization’s ability to deliver reliable care.

Reputational Risks

Perhaps the most lasting consequence of HIPAA non-compliance is the reputational damage it causes. Trust is the cornerstone of patient-provider relationships, and a single data breach can undermine years of goodwill. 

Negative media coverage and public outrage following a breach can cause patients to seek care elsewhere, leading to reduced revenue and growth opportunities. And, as we all know, the internet is forever. In other words, the lifespan of a breach may be far longer than anyone anticipates.

Furthermore, partnerships with insurers, vendors, and other stakeholders may be jeopardized if your organization is perceived as a compliance risk, leaving you isolated in a highly collaborative industry.

As the healthcare landscape evolves and regulatory scrutiny intensifies, preparing for HIPAA compliance is no longer optional—it’s an operational imperative. Taking proactive steps now will not only protect your organization from these risks but also position you as a leader in patient privacy and data security as the 2025 changes come into effect.

Overview of the Upcoming HIPAA Changes

As the healthcare landscape evolves, so must the regulations governing patient data and privacy. The upcoming changes to HIPAA in 2025 reflect a growing need to address modern challenges such as cybersecurity threats, increased use of telehealth, and expanding patient rights. These updates aim to fortify healthcare organizations’ ability to safeguard protected health information (PHI) while enhancing operational efficiency and patient trust.

Background on HIPAA Regulations

HIPAA, The Health Insurance Portability and Accountability Act, was enacted in 1996 to establish national standards for protecting sensitive patient health information. Its Privacy Rule and Security Rule outline how organizations should handle PHI, ensuring confidentiality, integrity, and availability.

Over the years, amendments such as the HITECH Act and the Omnibus Rule expanded HIPAA to include breach notification requirements and stricter penalties for non-compliance. While these frameworks have been instrumental in protecting patient data, the rise of digital healthcare and cyber threats has necessitated further revisions.

The HIPAA Privacy Rule

The HIPAA Privacy Rule establishes national standards to protect individuals’ medical records and other personal health information (PHI). It applies to covered entities such as healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates. Here’s an overview of its key requirements:

• Entities must take reasonable steps to safeguard PHI.
• Patients have the right to access and control their PHI, including who has access to that data.
• When disclosing or requesting PHI entities must limit the information to the minimum necessary to achieve the intended purpose.
• Written patient authorization is required for uses and disclosures of PHI not covered under permitted or required uses..
• Covered entities must provide patients with a Notice of Privacy Practices (NPP) explaining how their PHI will be used, their rights under HIPAA, and how to file complaints.
• PHI can only be used or disclosed for treatment, payment, and healthcare operations, or as required by law, unless the patient provides explicit consent.
• Covered entities must have Business Associate Agreements (BAAs) to ensure they comply with HIPAA requirements.
• Entities must notify affected individuals, the Department of Health and Human Services (HHS), and, in some cases, the media when PHI is breached.
• Personal representatives (e.g., legal guardians or individuals with power of attorney) are granted the same access to PHI as the patient, provided they are authorized.
• Additional protections apply to particularly sensitive information, such as psychotherapy notes or substance use disorder treatment records, requiring specific patient consent for disclosure.

The HIPAA Security Rule

The HIPAA Security Rule establishes standards to ensure the confidentiality, integrity, and availability of electronic protected health information (ePHI). The core requirements include:

Administrative Safeguards

• Implement policies and procedures to prevent, detect, and correct security violations, including risk analysis and risk management.
• Designate a security official responsible for developing and implementing security policies and procedures.
• Ensure that employees and contractors have appropriate access to ePHI and prevent unauthorized access.
• Implement access controls to ensure that ePHI is accessed only by authorized individuals.
• Provide regular training for employees on recognizing and mitigating security risks.
• Establish procedures for responding to and documenting security incidents involving ePHI.
• Develop plans for data backup, disaster recovery, and emergency operations to ensure continuity in safeguarding ePHI.

Physical Safeguards

• Restrict physical access to areas where ePHI is stored to authorized personnel only.
• Define rules for the proper use of workstations that access or store ePHI.
• Establish procedures for handling hardware and electronic media, including disposal, reuse, and transfer of devices containing ePHI.

Technical Safeguards

• Implement technical measures such as unique user IDs, passwords, and automatic logoff to limit ePHI access to authorized personnel.
• Deploy hardware, software, or procedural mechanisms to record and examine access and activity involving ePHI.
• Ensure that ePHI is not improperly altered or destroyed, including mechanisms to verify data integrity.
• Protect ePHI during transmission over electronic networks through encryption or other secure methods.

Organizational Requirements

• Ensure that business associates comply with the Security Rule by formalizing agreements (BAAs) that specify safeguarding responsibilities.

Documentation and Evaluation

• Maintain written security policies and procedures and update them as needed.
• Periodically evaluate security practices to ensure they align with regulatory updates and organizational needs.

Compliance with the HIPAA Security Rule is essential to protect ePHI from unauthorized access, breaches, and cyber threats, particularly as the healthcare sector faces increasing digital transformation.

Why HIPAA Changes Now?

Several factors are driving the timing of these HIPAA updates. In the past 5 years, the OCR has seen an 102% increase in reports of large data breaches (more than 500 records) and this surge in healthcare data breaches has highlighted vulnerabilities in existing frameworks.

Additionally, the widespread adoption of digital health tools including practice management software, ePrescribing tools, telemedicine, and wearable health devices has introduced new privacy challenges. Similarly, the shift in care models, especially toward value-based care and interoperability has also created a need for clearer guidelines on data sharing.

Updating HIPAA will allow regulators to address these issues and ensure healthcare organizations are equipped to navigate an increasingly digital and interconnected world.

Preparing for these changes now will not only help healthcare organizations maintain compliance but also position them as leaders in patient trust and data protection.

What Changes are Coming to HIPAA in 2025?

In order to address the evolution of the digital healthcare space and to combat increasing cybersecurity threats, there are changes coming to HIPAA in 2025. Short of the 2013 Omnibus Rule, there have been very few updates and, frankly, the time has come.

More specifically, the rule changes aim to improve risk identification via a comprehensive risk analysis (which many organizations skip) and risk mitigation.

Briefly, the 2025 HIPAA changes will bring several key updates, including:

• Stronger Cybersecurity Requirements: New mandates for encryption, access controls, and incident response plans aim to address the growing sophistication of cyberattacks on healthcare organizations.
• Enhanced Patient Rights: Patients will gain greater control over their health data, including more streamlined processes for accessing, amending, and sharing their information.
• Expanded Telehealth Regulations: As telehealth continues to grow, new standards will address the unique privacy and security challenges associated with virtual care.
• Vendor Management Accountability: Business associates and third-party vendors will face stricter oversight, requiring better compliance documentation and security measures.

More specifically, healthcare organizations can expect greater demands and requirements regarding:

• A complete technology asset inventory and network map that documents the movement of ePHI throughout a healthcare organization’s information systems
• A comprehensive risk analysis including the above inventory and mapping as well as the identification of network and system vulnerabilities and potential threats to and exposure of ePHI
• A detailed contingency and security incident response plan that establishes how the entity will restore data within 72 hours with critical data a priority
• A comprehensive data backup plan that includes separate technical controls to govern both backup and recovery 
• Conducting yearly Security Rule compliance audits
• Comprehensive yearly reviews and tests of security measures
• Twice yearly vulnerability scans 
• Yearly penetration tests 
• Implement technical safeguards, currently required for workstations, to all portable devices 
• Develop and implement a patch management and software update plan 
• Removal extraneous and unused software from relevant workstations and systems
• Disable any unused network ports identified during risk analysis
• Verify, annually, any BAAs and ensure their adherence to HIPAA rules 
• Networks must be segmented to limit lateral movement in the event of a compromise
• Anti-malware protection – Software must be implemented to protect against malicious software
• Updates to both MFA and encryption, ensuring data security in transit and at rest while limiting access to those who need it

How Healthcare Organizations Can Prepare for HIPAA Changes

For organizations who’ve been diligent about HIPAA regulations, it may seem like there’s not much to do or change, but these updates will require yearly audits and reviews including a risk analysis to identify potential gaps in security measures. For many organizations, these were “nice to have” rather than a “must have” and this is about to change.

To best prepare for the 2025 HIPAA updates, healthcare organizations should take a proactive approach to identifying and mitigating compliance gaps. This includes conducting comprehensive risk assessments to evaluate vulnerabilities in current policies, procedures, and technology.

Partnering with outside vendors who specialize in healthcare IT security, such as those offering vulnerability assessments, penetration testing and security framework implementation, can provide valuable expertise and tools for strengthening defenses.

Vendors who focus on healthcare security can help organizations align with industry best practices, implement advanced cybersecurity measures, and ensure all systems meet the updated HIPAA standards. By investing in these partnerships now, organizations can reduce risk, improve resilience, and position themselves for long-term compliance.

How NIST Frameworks Can Simplify Compliance

As healthcare organizations navigate HIPAA compliance, relying on established security frameworks like those developed by the National Institute of Standards and Technology (NIST) can provide clarity and structure. Aligning HIPAA requirements with NIST controls can help organizations streamline compliance efforts, enhance security, and build resilience against evolving cyber threats.

Mapping HIPAA Requirements to NIST Controls

The NIST Cybersecurity Framework (CSF) and NIST Special Publication 800-53 offer robust controls that directly map to HIPAA’s Privacy, Security, and Breach Notification Rules.

For example, HIPAA’s requirement for access controls aligns with NIST’s guidelines on identity and access management, while its mandates for risk analysis correspond to NIST’s risk assessment methodologies. Using NIST as a guide, healthcare organizations can ensure their policies, procedures, and technical safeguards comprehensively address HIPAA’s requirements while adopting a systematic, scalable approach to security.

Benefits of Integrating NIST into Security Programs

Integrating NIST frameworks into a healthcare organization’s security program promotes a proactive, risk-based approach to compliance by focusing on identifying, mitigating, and monitoring threats.

Further, NIST frameworks are widely recognized across industries, which can enhance trust and credibility with stakeholders such as patients, vendors, and regulators.

Finally, aligning with NIST standards can improve operational efficiency by standardizing security practices and facilitating audits or assessments. This integration also supports future-proofing efforts, as NIST is regularly updated to address emerging threats and technologies.

Tools and Resources for NIST Implementation

Adopting NIST frameworks doesn’t have to be overwhelming, thanks to a range of available tools and resources. While organizations can utilize online toolkits for NIST Cybersecurity Framework (CSF), partnering with IT security vendors who specialize in NIST compliance can further simplify the process.

Those organizations, like SCA, offer services such as gap and risk analysis, penetration testing, and compliance reporting. Many healthcare-specific risk management tools also integrate NIST guidelines, enabling seamless tracking and monitoring of compliance efforts.

Leveraging NIST frameworks and the IT security experts who can help you implement those security measures, can help healthcare organizations simplify their path to HIPAA compliance. Further, implementation of a longstanding and tested security framework that’s scalable will also strengthen overall cybersecurity posture, ensuring organizations are prepared for the 2025 updates and beyond.

Ready to talk about HIPAA security needs for the coming year? Reach out to the SCA team today about how our team of experts, with experience testing, developing, and implementing security solutions can help you build the cybersecurity confidence you need to keep patient data safe and your healthcare organization secure.