7 Ways the HIPAA Privacy Rule Affects Cloud Computing

why does the hipaa privacy rule exist

Healthcare organizations have increasingly adopted cloud computing solutions to maximize efficiency. Yet not every cloud service provider is HIPPA-compliant. At TenHats, we’re well-versed in the HIPAA Privacy Rule, and we work closely with our healthcare clients to ensure their data storage meets every requirement. 


 The HIPAA Privacy Rule applies to  cloud computing in a number of ways, including:


  • Covered entities and business associates
  • Auditing and monitoring
  • Data storage and transmission
  • Individual rights and requests


How the HIPAA Privacy Rule Affects Cloud Computing

The HIPAA Privacy Rule has significant implications for cloud computing. This is especially true when handling protected health information (PHI), also referred to as individually identifiable health information or personal health information. 

The Privacy Rule sets national standards to protect PHI and applies not only to the daily practice of healthcare providers but also to their administration of patient health records.

The Department of Health and Human Services (HHS) oversees the enforcement of the Privacy Rule through its Office for Civil Rights (OCR). Failure to comply with the HIPAA Privacy Rule can result in being fined for each individual violation. This can result in fines costing thousands of dollars per violation, depending on the severity of the privacy breach.


1. Covered Entities and Business Associates

Entities covered by the Privacy Rule and business associates are required to safeguard the PHI of individuals’ medical records when using cloud services. This process involves:

  • Implementing appropriate security measures 
  • Signing business associate agreements 
  • Maintaining control over PHI access and storage 


The Privacy Rule ensures that PHI remains confidential, secure, and HIPAA-compliant when stored or processed in the cloud. Cloud providers must offer robust data encryption, access controls, and safeguards to prevent unauthorized disclosure. 

For instance, the data in a patient portal could potentially be accessed by IT teams, customer service agents, and web developers on the backend. The application structure has to think about all those use cases and create levels of access controls to safeguard PHI.


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2. Auditing and Monitoring

HIPAA privacy ruleThe Privacy Rule necessitates comprehensive security measures for auditing and monitoring in cloud computing. Cloud service providers must implement authentication mechanisms and data segmentation.

These measures ensure that sensitive health data remains confidential and is only accessed by authorized personnel. Regular audits and monitoring activities are required to detect any unauthorized access, breaches, or suspicious activities within the cloud environment

Covered entities and their business associates must closely oversee these security measures to prevent data breaches and uphold HIPAA compliance.


3. Data Storage and Transmission

The HIPAA Privacy Rule mandates safeguards for the storage and transmission of data. Whether in electronic or paper form, covered entities must ensure that PHI is kept secure. 

Any data shared or transmitted must utilize security measures to prevent unauthorized access. One example is the exchanging of electronic health information. In this case, entities must follow standard protocols to safeguard PHI. This ensures the patient’s privacy while guiding the secure cloud storage and proper transmission of health-related data.

Under the HIPAA Privacy Rule, covered entities like healthcare providers must establish business associate agreements (BAAs) with vendors or partners who handle PHI on their behalf. The rule sets a standard for data protection and format, ensuring that PHI remains confidential and secure throughout its handling.

Business associates are now directly liable for complying with the Privacy Rule and must also have BAAs with their subcontractors. These agreements ensure that the business associates follow strict privacy standards and safeguards when handling PHI. 

The BAA: 

  • Outlines the permissible uses and disclosures of PHI 
  • Mandates appropriate security measures 
  • Establishes reporting obligations in case of breaches 


Failure to adhere to these provisions can result in penalties ranging from a few hundred to tens of thousands of dollars for each violation. This reinforces the importance of safeguarding sensitive health information across all entities involved.


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4. Individual Rights and Requests 

The HIPAA Privacy Rule grants patients essential rights regarding cloud computing. This allows patients to:

  • Obtain a copy of their individual medical records
  • Request corrections to their PHI
  • Control disclosures


When using cloud services, covered entities must ensure stringent safeguards and BAAs with cloud providers to protect sensitive data. Patients can still exercise their rights regardless of data storage in the cloud. The Privacy Rule maintains individual control over health information and necessitates secure practices in cloud computing to preserve privacy and patient rights.

From an IT and developer standpoint, this is often a paradox. For security, it needs to be difficult for anyone to access patient data. Yet for the patient’s own user experience, it should be relatively simple to view their information online. The challenge is to create a secure system that doesn’t frustrate users. 


TenHats: Your Bridge Between HIPAA and Cloud Computing

At TenHats, we provide HIPAA and SOC II security compliance to ensure your patients’ data stays secure. However, we don’t stop there. We also provide 24×7 armed physical security to keep servers and other equipment secure. This ensures that your sensitive data is under multi-layered constant protection in our 10,000-foot purpose-built data center. 


Are you ready to invest in cloud services for your healthcare business? Contact us today to start a conversation.


The HIPAA Privacy Rule mandates strict protection of individuals’ medical records in cloud services. Covered entities and associates must implement security measures, encryption, and access controls. Auditing detects breaches, while standardized formats ensure secure and efficient data exchange. 

Access controls and data segmentation limit data access, while data storage and transmission follow safeguards. Business associate agreements ensure PHI confidentiality, while the Privacy Rule enforces security and privacy measures, preserving patient rights and regulatory adherence in cloud computing.

Located in Knoxville, TN, our purpose-built colocation data center can serve any organization in East Tennessee and beyond. With our team’s IT experience, we provide a lot more than simply protected data. When you call us, you talk to a real IT expert, not just security. Connect with our team about our data center today!

Picture of Aaron Sherrill

Aaron Sherrill

Aaron is the Chief Technology Officer at TenHats leading the technology, cybersecurity, and data center teams of our organization. He has 25+ years of IT and security experience spanning across a variety of industries, including healthcare, manufacturing, and software development.

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